News from the IPL
INTRODUCTION
This newsletter is published by The Innovation Policy Lab at the Munk School of Global Affairs, University of Toronto, and sponsored by the Ministry of Research and Innovation. The views and ideas expressed in this newsletter do not necessarily reflect the views and policies of the Ontario Government.
ANNOUNCEMENTS
Taking Flight: Making an Ontario Aerospace Cluster a Reality
Canada 2020, in partnership with the Program on Globalization and Regional Innovation Systems at the Munk School of Global Affairs, University of Toronto, will be hosting a day-long conference on June 7th that looks at the issues around developing an aerospace cluster in Ontario. The purpose of this conference is to convene the relevant parties from industry, government and educational institutions to identify the gaps that need filling to move the Ontario aerospace industry from sector to cluster.
Government of Canada Invests in High-Quality Jobs and Growth
The Government of Canada will support 35 community colleges and cegeps that will be partnering with businesses to conduct research projects in the areas of information and communications technologies, environmental technologies, natural resources and energy. A total of 60 innovative partnerships between colleges and businesses will be provided more than $36 million over a period of up to five years through the College and Community Innovation (CCI) Program. The announcement includes 14 new Industrial Research Chairs for Colleges to support the development of longer term business-focussed applied research programs at colleges. Three new recipients of College-University Idea to Innovation Grants were also announced. These grants support collaboration between Canadian colleges, universities and businesses to improve or extend existing company technology or commercial products. Both were first announced in Budget 2011.
Editor's Pick
Global Information Technology Report 2012: Living in a Hyperconnected World
INSEAD/World Economic Forum
This report explores the causes and consequences of living in an environment where the Internet is accessible and immediate; people and businesses can communicate instantly; and machines are interconnected, creating opportunities and at the same time new challenges. With a record coverage of 142 economies worldwide, the report remains the most comprehensive and authoritative international assessment of the impact of ICT on development, growth, competitiveness and the well-being of nations.
Innovation Policy
Bold Action with an Ageing Toolkit: Toward a True Canadian Innovation Strategy
Nobina Robinson, IRPP
Swift response to some of the “Jenkins Panel” recommendations on programs that support business innovation was a hallmark of the recent federal budget. There are also hints at more to come for the innovation ecosystem in Canada. Operational and governance changes are more crucial than ever before to modernize the way government supports the needs of Canada’s high-growth firms. Canada needs an Innovation Strategy in addition to its existing Science and Technology Strategy.
Gary Pisano, Harvard Business School
The failure of many organizations to improve R&D performance is not due to lack of effort or commitment by the management or people involved. It is due to a misconception about the drivers of R&D performance. Too often, R&D performance is boiled down to a few simple universal practices. Unfortunately, there is no one best model for R&D that is universally superior. There is no “magic bullet.” R&D performance results from the interaction of many different decisions and choices, including the size and location of R&D facilities, the division of labour between various groups, the choice of technologies used inside the R&D organization, the selection of personnel, the allocation of resources, the design of processes for managing projects, and other factors. An R&D organization is like any other system: performance hinges on the coherence between the components. And, like any other system, R&D organizations cannot be designed to do all things equally well. They face trade-offs. Every approach to R&D has strengths and weaknesses. It is because of the need for coherence and the need to manage trade-offs that R&D strategy is an essential ingredient for achieving superior R&D performance.
Capabilities for Innovation Activities Impact Study
Johan Wallin, Philip Cooke, Arne Eriksson, Tomi Laamanen and Patrick Laxell, TEKES
Capability building within a company or network cannot be easily quantified. Unlike e.g. productivity, capabilities for innovation cannot be measured as easily as dividing output by the quantity of resources used, but have to be observed indirectly. A great deal of ambiguity is involved, making measuring the development of innovation capabilities prone to misinterpretations and error. Thus, for example, econometric analysis is of little help, as establishing valid causal relationship that can be operationalized is very difficult. The approach taken in this impact study is to develop a conceptual model for understanding how the capabilies may evolve if the right set of activities is carried out. Using this model it will subsequently be possible to identify some preliminary hypotheses about which innovation support activities are most important, and then look to verify these hypotheses through case studies and surveys among leading actors in the Finnish innovation system.
Information and Communication Technologies and Productivity Growth: A Survey of the Literature
Tobias Kretschmer, OECD
Given the commonly accepted wisdom that investment in ICT generates economic growth governments initiated policies to foster the adoption of ICT. In the United States for instance, President Obama most recently appealed to lay down broadband lines though the heart of inner cities and rural towns all across America. Such broadband deployment strategies and funding of up to USD 7.2 billion for broadband planning and deployment initiatives in the American Recovery and Reinvestment Act of 2009 indicate that the scepticism regarding the general impact of ICT has vanished. This short paper provides a review of the literature on the topic of ICT and productivity and economic growth.
Bridging the “Valley of Death”: Improving the Commercialization of Research
UK Commons Select Committee
This summary of the first evidence session of the Science and Technology Committee explores the academic understanding of commercialization research and addresses the “valley of death” in order to establish the base themes for the rest of the inquiry. It contains testimony from some key university leaders and researchers in the UK. It particularly focuses on the commercialization of biosciences.
Cities, Clusters & Regions
Building from Strength: Creating Opportunity in Greater Baltimore’s Next Economy
The Brookings Institution
According to many broad economic indicators, the Baltimore metropolitan area is doing better than fine. In 2010, the median household income for the region was nearly $15,000 higher than for the country at large, and over the 10 years prior, real incomes rose in the metro, if slowly, even while incomes nationally shrank by more than 7 percent. Employment grew from 2000 to 2010 while declining nationwide, and during the economic downturn, the area’s unemployment rate was consistently lower than the majority of its metropolitan peers. Yet anyone who lives and works in greater Baltimore knows the region is also home to many families and neighborhoods challenged by varying levels of economic and social distress. Yet the regional economy hums along, baring the somewhat disquieting truth that a good economy for most can be had even while many aren’t reaping its benefits. Efforts and ideas to change this paradigm abound. The public, non-profit, and philanthropic sectors— in Baltimore and throughout the country— spend billions each year trying to help fill the gap between what a household can afford and what it actually takes to pay for basic needs. As critical as these interventions are, however, they are not targeted at expanding opportunity—that is, making greater numbers of middle-wage jobs available and accessible to those who want to get ahead—as much as trying to compensate for the fact that there isn’t enough of it. This report proposes a different approach, one simultaneously focused on investing in efforts to grow a more opportunity-rich “next economy” and helping low-income residents gain the education, skills, and other capacities needed to participate in it.
Statistics & Indicators
National Venture Capital Association
The 2012 NVCA Yearbook includes a comprehensive analysis of U.S. venture capital industry statistics. The main source of data for this publication is ThomsonONE.com, the online research database of Thomson Reuters. ThomsonONE.com is endorsed by the NVCA as the official United States venture capital activity database. The publication includes metrics regarding commitments made to venture capital funds, venture capital investments into entrepreneurial companies, and venture-backed exits (mergers and acquisitions and IPOs). The publication also includes appendices regarding portfolio company valuation guidelines, international accounting convergence and venture capital activity outside the United States.
Financing SMEs and Entrepreneurs 2012
OECD
Access to finance represents one of the most significant challenges for entrepreneurs and for the creation, survival and growth of small businesses. As governments address this challenge, they are running up against a major and longstanding obstacle to policy making: insufficient evidence and data. Better data is needed to understand the financing needs of SMEs and entrepreneurs and to provide the basis for informed institutional and public policy decisions. This first edition of “Financing SMEs and Entrepreneurs: An OECD Scoreboard” represents a major step in addressing this obstacle by establishing a comprehensive international framework for monitoring SMEs’ and entrepreneurs’ access to finance over time. Comprising 18 countries, including Canada, Chile, Denmark, Finland, France, Hungary, Italy, Korea, the Netherlands, New Zealand, Portugal, Slovak Republic, Slovenia, Sweden, Switzerland, Thailand, the United Kingdom and the United States, the Scoreboard presents data for a number of debt, equity and financing framework condition indicators. Taken together, they provide governments and other stakeholders with a tool to understand SMEs’ financing needs, to support the design and evaluation of policy measures and to monitor the implications of financial reforms on SMEs’ access to finance.
Business Dynamics Statistics Briefing: Where Have All the Young Firms Gone?
John Haltiwanger, Ron Jarmin and Javier Miranda, Kauffman Foundation
The pace of business startups in the U.S. has exhibited a long-run decline that started in the early 1980s and has continued through 2010. Using data from the U.S. Census Bureau’s Business Dynamics Statistics (BDS), the report found several other long-run declines in the business activity of U.S. startups and young firms (defined here as firms aged five or less) between 1980 and 2010. Kauffman researchers also looked at state-level data and found long-run (between 1980 and 2010) and short-run trends (between 2006 and 2010) in the business activity of young firms. Utilizing state-level BDS data, they found that long-run declines in business activity by young firms have been present across all states, but with varying magnitude. A common trend emerged in states with the largest declines in business activities by young firms — they are the states that had some of the highest initial shares of business activity in the 1980s. In the short-run, states with the greatest net contractions in the great recession also exhibited the largest decline in the share of activity accounted for by young businesses. Although no long-term regional patterns exist, there were discernible regional patterns in the short-run. The largest declines in business activities by young firms are concentrated in the West, Southwest and South.
Policy Digest
Locating American Manufacturing: Trends in the Geography of Production
The Brookings Institution
With the slight resurgence of U.S. manufacturing in the recent years—termed a potential “manufacturing moment” by some—it is important to consider not just the future of manufacturing in America but also its geography. Geographic considerations are, in fact, central to whether the slow growth of U.S. manufacturing jobs during the last two years signals a renaissance of American manufacturing or merely a temporary respite from long-term decline. The report begins by situating the present moment of U.S. manufacturing. It continues by reporting a series of often surprising descriptive trends affecting the nature and location of American production. Finally, it concludes by proposing geographic high-road policies for American manufacturing. These policies require a federal platform that is sensitive to the ways in which manufacturing differs geographically. They require state and local decisionmakers to take the lead in adapting the high-road approach to their specific needs. This policy prescription differs from the general business attraction incentives that have dominated state and local economic development policy. These incentives (which cost state and local treasuries $70 billion annually) are problematic because they reduce the revenue available to fund investments in training and technology—investments that are essential to a high-road approach.
Manufacturing Talent in Metro America
General Electric CEO Jeffrey Immelt recently stated: [T]oday at GE we are outsourcing less and producing more in the U.S. . . . When we are deciding where to manufacture, we ask, ‘Will our people and technology in the U.S. provide us with a competitive advantage?’ Increasingly, the answer is yes. The people and technology that Immelt sees as crucial to his company’s decisions to increase manufacturing in the United States are place-specific. Those locations—especially metropolitan areas— help create the conditions that give firms such as GE a competitive advantage from manufacturing in the United States.
The Benefits of Clustering
When firms locate near each other, they gain a number of advantages. The geographic clustering of companies in the same industry or related industries—along with the educational, R&D, business, and labor institutions that support them—promotes high wages and innovation. Such clustering gives manufacturers access to specialized workers, suppliers, and customers and makes it easier for them to share ideas that can improve their performance. Manufacturers can also benefit from their location in a geographic area that has a diverse set of industries, including those not associated solely with manufacturing. In such locations, they can learn from the practices of non-manufacturing industries and gain easier access to such services as engineering, finance, legal services, and management consulting.
The Role of Public Policy
These geographic benefits are not simply natural advantages but also advantages created by public policy. The policy approach that aims to create such advantages, often called the high-road approach, encourages firms to utilize highly paid skilled workers to create innovative products and processes. Because manufacturing’s contribution to the nation’s economic well-being is based in part on its high wages and innovative capacity, high-road policies are in the national interest. High-road policies should have an important geographic component if manufacturing differs in important ways in different parts of the nation and if clustering and diversity are important for manufacturers. Geographic high-road policies build on the strengths that come when firms locate near each other.
The Importance of Regional Approaches
It is a common belief that manufacturing is basically the same throughout the United States, that it has completely decentralized from its historic central locations, and that this decentralization matters little to the productivity of manufacturing firms. For example, Christina Romer, former chair of President Obama’s Council of Economic Advisers, recently claimed that geographic clustering is not especially important in manufacturing. This report shows that such views are incorrect. American manufacturing is highly differentiated geographically. Different regions of the country, different metropolitan areas, and even different counties within the same metropolitan area differ greatly in their manufacturing industries, technology levels, wages, and plant sizes. Moreover, groups of manufacturing industries cluster systematically in different types of metropolitan areas.
Geographic high-road policies are easier to implement if manufacturers are already moving toward locations that offer the benefits of clustering and diversity and away from those whose competitive advantage is based largely on low wages. Here, this report suggests, the evidence is mixed. The report shows that manufacturing jobs have, for several decades, been moving out of the dense, centrally located metropolitan counties that provide manufacturers with the greatest benefits of diversity. Yet it also shows that the flight of manufacturing jobs to the right-to-work states of the South has at least temporarily halted.
Events
Regions and Communities in Transition: Recognizing Economic Turning Points 
Oklahoma City, 4-8 June, 2012
The Council for Community and Economic Research (C2ER) Annual Conference and the LMI Training Institute Annual Forum bring together leading economic and workforce development researchers from across the U.S. This year’s conference will enable participants to maximize their data resources and analytical capabilities to accurately identify changes as they occur in regional economies.
Taking Flight: Making an Ontario Aerospace Cluster a Reality
Toronto, 7 June, 2012
The aerospace sector in Ontario has weathered the recent economic storm and the forces of globalization better than most of the manufacturing base. With appropriate support, investment and a dynamic enabling environment it could act as a beacon for innovation and manufacturing excellence in the province. Canada 2020, in partnership with the Program on Globalization and Regional Innovation Systems at the Munk School of Global Affairs, University of Toronto, will be hosting a day-long conference that looks at the issues around developing an aerospace cluster in Ontario. The purpose of this conference is to convene the relevant parties from industry, government and educational institutions to identify the gaps that need filling to move the Ontario aerospace industry from sector to cluster.
Towards Transformative Governance? Responses to Mission-Oriented Innovation Policy Paradigms
Karlsruhe, Germany, 12-13 June, 2012
The Lund Declaration, which was handed to the Swedish Presidency of the Council of the European Union by 400 prominent researchers and politicians in 2009, states that “European research must focus on the Grand Challenges of our time moving beyond current rigid thematic approaches. This calls for a new deal among European institutions and Member States, in which European and national instruments are well aligned and cooperation builds on transparency and trust.” The declaration thus asks EU institutions to play a crucial role in bringing the relevant public and private actors together, and helping to build more cooperation and trust in order to address the overarching policy objectives.This declaration has taken up and reinforced a development in the past few years in which governments and the European Union have adopted a new strategic rhetoric for their research and innovation policy priorities which addresses the major societal challenges of our time. This is evolving into the third major policy rationale besides economic growth and competitiveness. It is not yet clear whether and how any transformative effects from this new mission-oriented approach can already be identified. The conference aims to attract papers that discuss possible transformative effects at different levels, i.e. on the actors performing research, innovation processes, scientific fields and technological sectors, the institutional funding and research landscape, society, the demand and user/beneficiary side, research and innovation policy and financing, and national and European political framework conditions. It also invites contributions that critically discuss methodological issues, conceptual developments and novel normative challenges around innovation and R&D policy triggered by the – alleged – mission oriented turn.
Entrepreneurship and Innovation Networks
Faro, Portugal, 14-16 June, 2012
Following the tradition established by the previous symposia, starting in 1998, the symposium is designed to bring together leading-edge views of senior academic scholars and mix them with the critical and creative views of postdocs and PhD students engaged in their thesis work. We welcome researchers from various fields, such as economic geography, economic history, entrepreneurship,
international business, management, political science, regional economics, small business economics, sociology and urban and regional planning. The objectives of the fifteenth Uddevalla Symposium 2012 are: i) to provide a unique opportunity for scholars including senior and junior researchers to discuss path-breaking concepts, ideas, frameworks and theories in plenary key-note sessions and parallel competitive paper sessions, and ii) to facilitate the development and synthesis of important contributions into cohesive and integrated collections for potential publication. Therefore, unpublished complete papers are invited for presentation and feedback from other scholars. A selected list of these papers will be subjected to review and development for publication in scholarly venue.
Copehagen, Denmark, 19 June, 2012
Conference highlights include keynotes offered by Gautam Ahuja, Melissa Schilling and Joel Baum as well as three plenary debates: 1. Support Paul Stoneman and Otto Toivanen or Giovanni Dosi and Sid Winter wrestling over the merits of neoclassical economy in innovation studies. 2. Join the debate on the value of the exploration/exploitation trade-off with John Cantwell and Ram Mudambi pitched against Marco Giarratana and Lori Rosenkopf. 3. Enlist in the dispute over the current IPR-regime effects on growth with Eric von Hippel and Georg Von Krogh against Vincenzo Denicolo‘ and Scott Stern.
CALL FOR PAPERS – XXIII ISPIM Conference: Action for Innovation: Innovating from Experience
Barcelona, Spain, 17- 20 June, 2012
The plea for innovation is universal. Managers and politicians have understood that innovation is needed on an everyday-basis to strengthen the competitiveness of organisations, regions and countries. Innovation, however, requires more than good ideas and intentions. Leadership, foresight, courage, investment, inspiration and perspiration are needed to turn intentions and ideas into effective action. Even with these elements in place, not every initiative is successful. However, every action and each experience provide new insights into the causes of failed and successful innovation. Successful innovators, be they individuals, organisations, intermediaries or policy makers, must therefore overcome the paradox of building on experience, and yet breaking away from the status quo, with a permanent innovation mindset. These challenges of “Action for Innovation” are the core focus of this conference.
CALL FOR PAPERS – Sustaining Regional Futures
Beijing, China, 24-26 June, 2012
The Conference will address some of the biggest issues facing regions and sub-national areas around the world, gateways are being organised on the causes and implications of different patterns of regional development. The gateways are dedicated to assessing the forms and successes of regional policies in managing regional disparities; establishing basic public services; supporting endogenous growth and the comparative advantages of regions; promoting regional competitiveness and sustaining harmony between the economy, society and the environment. Papers on each of these themes are encouraged – on different countries’ and regions’ experiences, and on comparative studies.
Science and Technology Policy in Global Context
Waterville, NH, 5-10 August, 2012
The global context for science and technology policies is changing quickly. Knowledge is flowing around the world ever more freely. International collaboration is growing in every field. Economies that have traditionally grown through innovation face new competition from rising economic powers. Intellectual property regimes are in flux and under attack. Scientists and engineers trained in Europe and North America are returning to their regions of origins more often. Science and technology are embroiled in global regulatory issues like the ground rules for nanotechnology and synthetic biology, renewable and nuclear energy, and access to essential medicines. The 2012 Gordon Research Conference on Science and Technology Policy will delve deeply into this range of issues, asking how the questions and answers of science and technology policy need to change in response to international developments. The program will tap the best recent research on the global dimensions of research, innovation, human resource, and regulatory policies, as well as perspectives from S&T policy practitioners from around the world.
Research Network on Innovation Summer School 2012
Montpellier, France, 29 August – 1 September, 2012
This Summer Schoolaims to update on the works considering the sectoral dimensions of innovation, or using and questioning the concept of Sectoral System of Innovation (SSI). This initiative also proceeds from the perspectives opened by the international symposium held in 2010 in Montpellier on innovation in agriculture and agri-food (http://www.isda2010.net/fr/) and calling for comparative analyses with research on innovation in other sectors. The aim is to question specificities and convergences of innovations in different sectors and to discuss the relevance of the concept of Sectoral Systems of Innovation (SSI).
13th International CINet Conference: Continuous Innovation Across Boundaries
Rome, Italy, 16-18 September, 2012
The Continuous Innovation Network (CINet) is a global network set up to bring together researchers and industrialists working in the field of Continuous Innovation. The mission of CINet is to develop into a school of thought on Continuous Innovation. Consistent with this mission, CINet organises an annual conference. This announcement concerns the 13th CINet conference, which will take place in Rome, Italy, on 16-18 September 2012. Furthermore, CINet promotes a PhD Network to foster research collaboration among PhD students and their institutions on innovation in the widest sense of the word. As part of that initiative, a PhD workshop is organised just prior to the 13th CINet conference, on 14-15 September. Besides that a CIYA Workshop will be organized, aimed at young academics working in the field of continuous innovation.
Leuven, Belgium, 27-28 September, 2012
The EPIP (European Policy for Intellectual Property) association will hold its 7th Annual Conference on September 27-28, 2012 in Leuven (Belgium). Scholars and practitioners interested in the economic, legal, political and managerial aspects of intellectual property (IP) rights are encouraged to attend the conference with or without paper presentation. The conference aims to explore and stimulate debate regarding open innovation and creation, and to examine the interaction between open innovation and proprietary IP mechanisms. Is the IP rationale under pressure in view of these changing innovation dynamics? Are IP strategies ‘in motion’ in response to these emerging trends of increased openness?
The Governance of a Complex World
Nice, France, 1-3 November, 2012
In a period of crisis – according to many commentators the most important one since the Great Depression – the governance of an ever increasingly complex world is a major challenge to economics and social sciences, especially in the current stage where no clear consensus has emerged so far in our scientific communities. The aim of the 2012 International Conference on “The Governance of a Complex World” is the identification of major propositions of political economy for a new society, grounded on structural, technological and institutional change. We encourage submissions dealing with different levels of governance (countries, industries, firms, individuals), where innovation is viewed as a key driver to stir our complex world out of the crisis. We especially welcome analyses in the field of knowledge dynamics, industrial evolution and economic development, dealing with key issues of the emergence and persistence of innovation, entrepreneurship, growth of firms, corporate governance and performance, agglomeration/dispersion of industrial activities, skills dynamics, economics of science and innovation, environment as a driver of innovation.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.