The IPL newsletter: Volume 13, Issue 276

News from the IPL


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.


Obama Administration Launches Competition for Three New Manufacturing Innovation Institutes

The White House, Office of the Press Secretary
The Obama Administration recently announced that it is launching competitions to create three new manufacturing innovation institutes with a Federal commitment of $200 million across five Federal agencies – Defense, Energy, Commerce, NASA, and the National Science Foundation.  To build off the initial success of a pilot institute headquartered in Youngstown, Ohio, the President announced in the State of the Union that his Administration would move forward and launch three new manufacturing innovation institutes this year.  The President will continue to call on Congress to act on his proposal for a one-time $1 billion investment to create a network of 15 manufacturing innovation institutes across the country.

New Research Projects to Enhance Bioinformatics and Computational Biology Tools and Methodologies

Genome Canada
New Canadian bioinformatics and computational biology research projects will help manage, analyze and interpret vast amounts of genomics data to accelerate advances in personalized medicine, public health and other areas of importance to Canadians and the economy. Through Genome Canada’s 2012 Bioinformatics and Computational Biology Competition, a partnership with the Canadian Institutes of Health Research (CIHR), 17 projects across the country will receive funding. The mix of large-scale applied and small-scale innovative projects will produce new tools and methodologies to enhance genomics data management and analysis, contributing to improving cancer treatments, quicker responses to infectious disease outbreaks, improved food production, and more.

Editor's Pick

Exploring Data-Driven Innovation as a New Source of Growth: Mapping the Policy Issues Raised by “Big Data”

This report explores the potential role of data and data analytics for the creation of significant competitive advantage and for the formation of knowledge-based capital. Five sectors are discussed in this report as areas in which the use of data can stimulate innovation and productivity growth. They include online advertisement, health care, utilities, logistics and transport, and public administration. The report then maps the areas where coherent public policies and practices are needed to unlock the potential of big data for promoting growth and well-being.

Innovation Policy

Proof of Concept Centers in the United States: An Exploratory Look

Samantha R. Bradley, Christopher S. Hayter, and Albert N. Link
This paper we identifies the population of 32 U.S. university-related Proof of Concept Centers (PoCCs), and presents a model of technology development that identifies the economic role of PoCCs within that model. It examines the broad technology transfer challenges that PoCCs have been established to address. Further, it argues that PoCCs are a growing technology infrastructure in the United States, and they are important as a possible element of our national innovation system.

Economic Globalization: Origins and Consequences

Few subjects are as controversial – and poorly understood – as globalization. While in its broadest sense, economic globalization is as old as trade itself, the recent financial crisis has amplified the complexity associated with the global interconnectedness of the world’s economies and its ramifications on our livelihoods. This publication reviews the major turning points in the history of economic integration, and in particular the pace at which it has accelerated since the 1990s. It also considers its impact in four crucial areas: employment, development, the environment and financial stability: does globalization foster development or create inequality? Does it promote or destroy jobs? Is it damaging to the environment or compatible with its preservation? Are we heading towards de-globalization or can globalization in fact enable recovery?

The State of Venture Capital in Canada: An Entrepreneur’s Perspective

Andrew D’Souza, TechVibes
This article explores the state of VC in Canada wth a particular focus on the specific challenges and opportunities that face entrepreneurs in Canada versus the United States. It notes that there have been significant changes have occured in the Canadian VC scene with the appearance of Accelerators like GrowLabs and Extreme Startups. This article is part of a discussion series about VC aimed at Canadian entrepreneurs.

Cities, Clusters & Regions

Strategy for Denmark’s Cluster Policy

Ministry of Science, Innovation and Higher Education
With this document, eight ministries, the six regional growth forums and Local Government Denmark (LGDK) present a joint strategy on how Denmark, through an efficient cluster policy, can contribute to our creating tomorrow’s strong competitive and innovative enterprises. The strategy builds on existing policy up and constitutes a gathering, focusing and strengthening of the area so as to ensure cohesion and synergy between the regional growth forums and the government’s efforts within cluster development. The strategy has been prepared by an interministerial and cross-regional working group, which has included industry organisations and trade unions, research and educational institutions and other central innovation players. No other country has involved all relevant ministries, regions and municipalities in a partnership about cluster development in the same way.

Clusters of Entrepreneurship and Innovation

Aaron Chatterji, Edward Glaeser, William Kerr
This paper reviews recent academic work on the spatial concentration of entrepreneurship and innovation in the United States. It discusses rationales for the agglomeration of these activities and the economic consequences of clusters. The authors identify and discuss policies that are being pursued in the United States to encourage local entrepreneurship and innovation. While arguments exist for and against policy support of entrepreneurial clusters, understanding of what works and how it works is quite limited. The best path forward involves extensive experimentation and careful evaluation.


Statistics & Indicators

What Matters to Metros: Foundational Indicators for Economic Competitiveness

Fund for Our Economic Future
This report helps community leaders identify factors that are associated with economic growth in 115 mid-sized U.S. metropolitan areas in a post-recession economy.  This work builds upon six previous iterations (called the Dashboard of Economic Indicators) and assesses the relationship of 55 variables to economic growth across four measures: per capita income, gross metropolitan product (GMP), productivity and employment, between 1990 and 2011.

10 Breakthrough Technologies of 2013

MIT Review
This list of breakthrough technologies compiled by MIT researchers celebrates technological advances, but also the creativity that led to their development. The top ten includes a 3-D printer, a temporary social network and memory implants.

Policy Digest

Manufacturing for Growth: Strategies for Driving Growth and Employment

World Economic Forum
The three-volume series of reports examines key trends, effective strategies and best practices related to the global manufacturing sector in three key areas: Globally competitive manufacturing policy; Partnering for competitiveness; and manufacturing value chains driving growth. The report contends that a competitive tax system, free and fair trade, education and talent development, energy efficiency and technology and innovation are the key drivers behind a successful advanced manufacturing strategy. The report also provides recommendations from manufacturing executives to develop an integrated portfolio of public policies in the U.S. that spur innovation, increase competitiveness, create jobs and stimulate sustainable economic growth.

In today’s global economy, government actions and public policy play a critical role in shaping the competitiveness of both nations and the individual companies that operate within their borders. The impact that government policies can have across a number of competitiveness drivers – including trade; financial, monetary, tax and legal systems; infrastructure; education; labour markets; and science and technology – are significant. They can directly create both advantages and disadvantages relative to other nations. As the strategic use of public policy intensifies, collaboration between policy-makers and business leaders to create win-win outcomes becomes more essential.

In Davos in January 2012, business leaders gathered to review and discuss the output of The Future of Manufacturing project, which focused on the question: How are global value chains evolving? The follow-up Manufacturing for Growth initiative focuses on the key question: What should be done? The objective of the Manufacturing for Growth initiative is to foster constructive dialogue and collaboration between business leaders and public policy-makers and, therefore, to facilitate better public policy.

Globally Competitive Public Policy

Face-to-face discussions with more than 70 chief executives and other senior executives around the world were conducted from August 2012 through early January 2013 to collect insights into policy recommendations for six focus countries – three developed economy nations (Germany, Japan and the United States) to serve as surrogates for the developed world, and three emerging economy nations (Brazil, China and India) to serve as surrogates for the emerging world.

In addition, workshops were conducted around the world soliciting additional input from business executives and subject matter experts. Executives participating in the working sessions and one-on-one interviews were both passionate and clear when sharing their perspectives and recommendations on altering key aspects of current government policies to drive manufacturing and economic growth. While the CEO recommendations vary based on industry sector and the unique circumstances of each country, several common and recurring themes emerged regarding what constitutes effective public policy.

Effective public policy characteristics

  • Consistency, stability and certainty
  • Globally competitive, fair and enforced
  • Developed through dialogue and collaboration
  • Creates institutional legitimacy, credibility and market confidence
  • Harmony and alignment
  • Financially prudent; balances costs versus benefits

In addition, there were five specific public policy areas where common messages emerged from executives around the world.

 Common Policy Recommendations

  • Competitive tax policy applied within simplified tax systems:Executives participating in the discussions consistently expressed concern with both business tax policy and complex national tax systems that negatively impact competitiveness. While specific country tax systems vary from country to country, executives broadly said that the countries that could offer competitive advantages in lowering an organization’s overall effective tax rate, as well as remove resource and cost burdens often associated with compliance, would be the winners.
  • Policy that promotes and protects free and fair trade: Trade was frequently and passionately mentioned by almost all of the executives participating in the discussions. Executives consistently called for policy-makers to increase both the number of free trade agreements and the pace at which new agreements are formed and ratified. Business leaders also suggested that policy-makers need to consider non-tariff trade barriers, such as border administration and complex regulatory hurdles.
  • Energy policy promoting efficiency, security, strong infrastructure and low cost: Executives broadly expressed that countries that could provide clean and sustainable sources of energy at a competitive cost would offer a significant advantage over other nations. They also said it was incumbent on policy-makers to develop comprehensive national energy policies that effectively and responsibly build a portfolio of strategic sources of energy, ensure efficient delivery through world-class infrastructure, and support appropriate R&D efforts in alternative sources of clean energy.
  • Education and workforce policy that develops superior talent: The ability to develop and attract the world’s most talented workers was critical to every executive participating in the discussions, regardless of geography. Executives consistently said that their ability to drive innovation is directly linked to their ability to access highly educated workers. While STEM (science, technology, engineering and mathematics) literacy is important, executives consistently said STEM is not, by itself, sufficient. Many commented that creativity and imagination are key ingredients to producing great innovation. As a result, they stressed manufacturers need STEM educated, multidisciplinary thinkers who are also creative and can problem-solve in a team environment.
  • Science, technology and innovation policy which promotes advanced manufacturing: Finally, executives conveyed that a talented workforce with strong STEM and creativity skills combined with policies that consistently promote superior science and technology research and development through to commercialization – including the development of advanced manufacturing processes – are essential to national competitiveness.

Partnering for Competitiveness

The reality of today’s global competitiveness environment requires a team effort to succeed. Increasingly, businesses, government and academia are partnering to make strategic choices about how to develop and sustain the knowledge and capabilities necessary to be leaders in the advanced manufacturing economy.

Almost universally, the executives interviewed for this effort expressed concern about attracting, training and retaining the most qualified talent and driving the innovation agendas of their organizations. Business executives emphasized the need for the public and private sectors to collaborate, with each other and with universities, national laboratories, research centres and other non-profits to create environments that breed both talent and innovation. The examples of leading public-private partnership organizations provided by executives varied widely by sector, funding mechanics, tenure, exact focus of mission and geographic reach – from the Agency for Science, Technology and Research in Singapore to Fraunhofer-Gesellschaft in Germany and to the Manufacturing Institute in the United States. Despite differences in location and mission, these leading examples demonstrate a common set of best practices.

Best practices of public-private partnerships

  • Demand-driven and highly responsive to specific needs of industry and society: The most effective public-private partnership organizations are demand-driven and have a mission focused on specific market needs, both from an industry and societal perspective. These organizations address relevant, timely and current issues while anticipating future demands and trends.
  • Offers a differentiated value proposition that transcends traditional business barriers: Each of the organizations identified has a distinct and differentiated value proposition essential to its market success. Further, they all excel at creating bridges between groups that would otherwise operate in different spheres, extracting latent value from the collaboration.
  • Long-term horizon and flexible in measuring success: Like well-managed businesses, leading public-private partnership organizations establish metrics for success and track themselves by those metrics. What differs are the type of metrics and the time horizon for success. A public-private partnership organization is not measured in quarterly earnings and may even use metrics other than monetary value.
  • Seeks revenue streams beyond government or public funding:Leading organizations derive a much more significant portion of their revenue and funding from private sources than from public sources. In virtually all cases, they have multiple funding sources.
  • Core structural integrity: Leading public-private partnership organizations display unapproachable integrity when it comes to intellectual property protection and creating trust and credibility. They establish a track record of trust and respect with a nation, with industry and with customers.

Manufacturing Value Chains Driving Growth

Today’s manufacturing value chains are complex, highly interconnected, and rapidly changing. Policy-makers and business leaders face competing objectives and challenges to navigate this environment. Policy-makers strive to create more high-value jobs and improve the quality of life for their citizens. Manufacturing leaders are increasingly responding to competitiveness pressures to attract the best from a global pool of talent, along with the capital, capabilities, and the global customers and revenues necessary to maintain their competitiveness and viability. As explained by Gary Gereffi and Joonkoo Lee (in their essay adapted from their article Why the World Suddenly Cares about Global Supply Chains1), the ability of a country to prosper today depends on its participation in the global economy and its role in global supply chains. But understanding its role – much less changing its role – can be complicated at best.

Key concepts and trends in understanding today’s global value chains

  • Shift from “trade in goods” to “trade in value-added”: Over the past 20 years, with an emphasis on East Asia, global supply chains have grown exponentially, covering not only finished goods but also sub-assemblies and components. This has resulted in more intermediate goods than finished goods traded across borders, and more parts and components imported for use in exports. In 2009, the world exports of intermediate goods exceeded the combined export values of final and capital goods. This new pattern of global trade is referred to as a shift from “trade in goods” to “trade in value-added” and “trade in tasks”. While most intermediate goods are still traded within large regional economic blocks such as the European Union rather than across them, Asia’s linkages to the European Union and North America represented the two highest inter-regional import flows of intermediate goods in 2008. Asia imported more intermediate goods than it exported, indicating the region’s high level of integration with global supply chains. Increasingly, China’s ability to excel at scale-driven specialization and develop “supply chain cities” has become a source of persistent competitive advantage.
  • Top-down versus bottom-up: The Global Value Chain (GVC) framework analyses “the full range of activities that firms and workers perform to bring a product from its conception to its end use and beyond”. This holistic view provides two contrasting vantage points: a top-down “governance view” of supply chains focuses mainly on lead firms and the organization of global industries, and a bottom-up “upgrading” perspective which focuses on strategies used by countries and regions to maintain or improve their positions in the global economy.
  • The new math of value-added: Interestingly, China does not create or capture most of the value generated through its value chain exports. As more types of intermediate goods are traded within global supply chains, the discrepancy is growing between where final goods are produced and exported and where value is created and captured. Domestic content only accounts for about half of China’s manufacturing exports.
  • Shifting end markets: As world trade is bouncing back from the economic crisis of 2008-2009, emerging economy nations are becoming the main growth engine of world economic recovery. Stagnant growth in demand in the global North since the mid-1980s was exacerbated by the recent economic crisis, whereas demand is quickly growing in the global South, particularly in emerging economies like China, India and Brazil. From 2005 to 2010, the merchandise imports of the European Union increased by 27%, while they increased in the US by 14%. Over the same time period, emerging economies expanded their merchandise imports much faster: Brazil, 147%; India, 129%; China, 111%; and South Africa, 51%.

To better inform this dialogue on global value chains, the report illustrates and analyses the value and jobs created in three manufacturing sectors: aerospace, automotive, and chemicals. Each of these sectors is representative of several broader themes: globalization, including shifting consumer and production markets; spread of free trade; rise of the global middle class; increasing use of technology, digitization and advanced processes; and the skilled and talented workforce required in today’s manufacturing. An understanding of how manufacturing and value chains work in a globalized world is critical to developing and implementing effective policies to enable the advancement of manufacturing.

Policy recommendations from chief executives and senior business executives, best practices of leading public-private partnerships with an emphasis on talent and innovation, and new perspectives on today’s complex global value chains are the key elements of this report. The hope is that this report serves as a primer for informed and spirited dialogue and debate, and that the Manufacturing for Growth effort has helped to provide a foundation for constructive collaboration among business, government and civil society.



Cluster Academy: Learning from the Clusterland Upper Austria”cluster region”

Linz, Austria, 14-17 May, 2013
The Cluster Academy shows how successful clusters work, using Clusterland Upper Austria Ltd. as an example and gives an input, how these processes could be implemented in your region. An additional benefit is the networking and exchange of experience effect with international participants, sharing the same interests in cluster activities. The cluster management workshop covers the areas of knowledge management, initiation and support of cooperation projects, qualification and event management, marketing & PR, internationalization, financing and evaluation & measuring. This year, more interactive formats of participation such as an ample case-study to complement lectures, field reports and presentations are being designed. Numerous direct visits to cluster companies should spot the motivation of being active in a cluster. Attractive side events give a chance to get to know the participants and the city of Linz.

9th International PhD School on Innovation and Economic Development

Tampere, Finland, 20-31 May, 2013
The aim of the Globelics Academy PhD-School is to support the training of Ph.D. students from different parts of the world and who are writing theses on issues related with innovation and economic development. The Academy brings together frontier researchers in innovation with Ph.D. students from developing countries in order to inspire and qualify their work as well as in order to help them to join high-quality research networks in their field of research.

16th Uddevalla Symposium 2013: Innovation, High-Growth Entrepreneurship and Regional Development

Kansas City, 13-15 June, 2013
The critical role of innovation and entrepreneurship in regional economic development in terms of productivity and employment growth has been well documented theoretically as well as empirically by researchers in recent decades. The specific mechanisms through which innovation stimulates regional economic development are less well established. It is often assumed that entrepreneurship in the form of new firm formation and the growth of newly established firms plays a critical role, but how, why, when and under what conditions is less clear. Empirical studies show that a limited share of new business ventures have the capacity to rapidly up-scale and to generate substantial new jobs in the regions where they are launched. From the perspective of regional policy makers, this implies that it is critical to understand what regional economic milieus are capable of generating innovations that can be the basis of high-growth entrepreneurship as well as provide the right environment for entrepreneurs to launch entrepreneurial initiatives.Against this background, we seek papers that, in particular, topics related to exploring these themes.

Experience the Creative Economy

Toronto, 18-21 June, 2013
The 6th Annual Experience the Creative Economy conference is a forum for emerging scholars who are engaged in research related to the creative economy. The conference brings together up to 25 individuals from around the world to share and discuss their research. In particular, the small and focused setting provides participants with the opportunity to: present their work; receive feedback; refine and develop research methods; and join an ongoing network of collaboration and exchange.

Knowledge-Based Entrepreneurship, the Triple Helix and Local Economic Development

London, UK, 10 July, 2013
The creation of innovative new firms and the development of SME innovation are strongly influenced by the extent to which localities offer environments that favour the transfer of knowledge to local business and provide the other resources required for innovative firm development, including skills, finance, advice, and supply chain partners. The concept of the ‘triple helix’ captures the interplay of government, research and industry in the promotion of business innovation and provides a framework for policymakers seeking to understand how to promote local knowledge-based entrepreneurship. The workshop will use this framework to examine the policy actions that governments can take to promote innovative new firm creation and SME innovation in local economies by improving conditions for knowledge transfer and knowledge-based entrepreneurship.

9th European Urban and Regional Studies Conference
Europe and the World: Competing Visions, Changing Spaces, Flows and Politics

Brighton, UK, 10-12 July, 2013
Europe’s relations with the wider world are continuously undergoing change. The urban and regional significance of these changing relations remains surprisingly poorly understood. The global financial and economic crisis, the dramatic events of late 2010 and 2011 in the Middle East and North Africa, the continuing crisis in Europe, and the global rise of ‘new powers’ are each impacting on how Europe, its citizens, and its cities and regions are connected to the wider world. The 9th European Urban and Regional Studies conference aims to consider a wide range of consequences of these changes as well as other themes relating to European urban and regional change.

2nd European Colloquium on Culture, Creativity and the Economy

Berlin, Germany, 10-11 October, 2013
During the past decades myriad links between culture, creativity and economic practice have become major topics of interdisciplinary debates. No longer restricted to a few sectors, there is a growing consensus that the intersections between these spheres and symbolic and culturally embedded values in particular, pervade the global economy. Indeed, the formerly distinct logics of the cultural and the economic have become increasingly indiscernible. Similarly, the notion of creativity, once used to express exceptional talent, activities and outcomes, is now considered a key component to success in all fields of economic activity. At the same time, the Internet has revolutionized the conditions under which cultural production and distribution as well as creative collaboration can be undertaken. Despite the high degree of uncertainty about future developments, policy makers as well as business managers are highly optimistic, if not enthusiastic, about the ability of symbolic values and creativity to drive sustained economic growth and regional development. This colloquium will take up and continue an international and interdisciplinary debate on these topics.

Atlanta Conference on Science and Innovation Policy

Atlanta, GA, 26-28 September, 2013
The Atlanta Conference on Science and Innovation Policy provides a showcase for the highest quality scholarship addressing the multidimensional challenges and interrelated characteristics of science and innovation policy and processes. This year’s sessions will explore the research front addressing the broad range of issues central to the structure, function, performance and outcomes of the science and innovation enterprises.


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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.