The IPL newsletter: Volume 14, Issue 284

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.


New MaRS Investment Platform to Mobilize Private Capital for Public Good

MaRS Discovery District officially launched its new impact investing platform, SVX (Social Venture Connexion), in an announcement recently at the Toronto Stock Exchange. It is the first local impact investment platform of its kind in North America. SVX started from a simple idea: mobilize private capital for public good by driving investment in organizations and companies that will, in turn, better our world. The online platform will connect investors and funds with local ventures—including not-for-profits, co-operatives and for-profit corporations—that have a demonstrated social and/or environmental impact and the potential for financial return. SVX is targeted towards Ontario-based small- and medium-sized enterprises with less than $25 million in revenues in sectors including: affordable housing, employment services, food security, education, renewable energy, sustainable agriculture, and initiatives for First Nations and new Canadians.

Google Launches a Network of Tech Hubs in North America

Google partners with a network of seven tech hubs in North America (initially in U.S. and Canada) to deepen its community ties in locations including Minneapolis, Chicago, Waterloo, Nashville, Durham, Denver and Detroit. These partners are technology leaders in their community and a natural home for Google communities like Google Developer Groups and Google Business Groups. Tech hubs provide a venue for developers and the wider tech community to engage directly with companies and training partners like Google. They host a range of events, workshops, and provide co-working space for entrepreneurs. Google enables tech hubs by providing them with technical content, business tools, and infrastructure upgrades, so that they can support increasing demand from developers and startups.

California Announces Four New Innovation Hubs (i-Hubs)

California state economic development director Kish Rajan and deputy director Louis Stewart recently joined state and local elected officials in Riverside to announce the designation of four new Innovation Hubs (i-Hub), further expanding the largest network of state sponsored innovation clusters in the U.S. This announcement comes just days the Governor signed legislation – AB 250 – to formally recognize the i-Hub program in statute and establish the Innovation Accelerator Account.

5th Canadian Science Policy Conference

The Canadian Science Policy Conference (CSPC) was founded in 2008 by a diverse group of young and passionate professionals from industry, academia, and science-based governmental departments. CSPC serves as an inclusive, non-partisan and national forum uniting stakeholders, strengthening dialogue, and enabling action with respect to current and emerging issues in national science, technology, and innovation policy. The CSPC presence on the national stage has positively impacted the national science policy scene in a number of significant ways. This year the conference will be held in Toronto on November 20-22nd.

Editor's Pick

Paradox Lost: Explaining Canada’s Research Strength and Innovation Weakness

Council of Canadian Academies
This report examines two questions that have been of perennial concern to Canadian policy-makers, industry leaders, and economists alike: (i) Why has Canada’s research excellence not translated into more business innovation?, and (ii) How has Canada’s economy sustained relative prosperity despite weak innovation and correspondingly feeble productivity growth? In their examination of these questions, the report’s authors consider the complex ways in which research leads to innovation, and the factors that motivate Canadian business strategy. As such, the report explores Canada’s current paradox and identifies four megatrends that will pose challenges for Canadian businesses in the years to come.

Innovation Policy

Canada’s Future as an Innovative Society: A Decalogue of Policy Criteria

Institute for Science, Society and Policy
The Innovation Decalogue provides Canada’s institutions of governance with a framework to support a coordinated, evidence-based approach to innovation policy development and assessment. From a review of evidence spanning over 60 years, it sets out ten essential criteria for making policy decisions in any and every portfolio. In their entirety, the criteria describe features that are necessary for effective innovation policies and sufficient to move Canadian innovation policy to the next leve

Trends in the Innovation Ecosystem: Can Past Successes Help Inform Future Strategies? Summary of Two Workshops

Steve Olson and Maria Dahlberg, National Academy of Sciences 
This report is the summary of two workshops hosted by the Committee on Science, Engineering, and Public Policy (COSEPUP) of the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine in February and May, 2013. Experts from industry, academia, and finance met to discuss the challenges involved in innovation pathways. Both workshops focused on the interactions between research universities and industry and the concept of innovation as a “culture” as opposed to an operational method. The goal was to gain a better understanding of what key factors contributed to successful innovations in the past, how today’s environment might necessitate changes in strategy, and what changes are likely to occur in the future in the context of a global innovation ecosystem. This report discusses the state of innovation in America, obstacles to both innovation and to reaping the benefits of innovation, and ways of overcoming those obstacles.

Cities, Clusters & Regions

The Freight-Manufacturing Nexus: Metropolitan Chicago’s Built-in Advantage

Chicago Metropolitan Agency for Planning (CMAP) 
Metropolitan Chicago’s clusters of specialized industries play a critical role in creating quality jobs and contributing to the overall regional economy’s value-adding output. Prior CMAP research has focused on the region’s freight and manufacturing clusters — two of metropolitan Chicago’s historic strengths — to show opportunities for growth in the new global economy. This new report complements this work by documenting how the region’s unique synergy of interdependent freight and manufacturing assets means metropolitan Chicago is well-positioned to compete in the nation’s recent manufacturing resurgence.

The City of Chicago Technology Plan

The City of Chicago
This plan is a framework that will allow the city to maintain its leadership in technology and build on a commitment to modern infrastructure, smart communities, and technological innovation. The Tech plan starts from a position of strength in technology —including a robust data-science program, world-renowned research centers and universities, and a fast- growing data center industry — and highlights 28 initiatives within five broad strategies that together will enable Chicago to realize its vision of becoming the city where technology fuels opportunity, inclusion, engagement, and innovation.

Industrial Dynamics and Clusters: A Survey

Koen Frenken, Elena Cefis and Erik Stam, Utrecht School of Economics
This paper reviews the literature on clusters and their effects on entry, exit and growth of firms as well on the evolutionary dynamics underlying the process of cluster formation. This extensive review shows that there is strong evidence that clusters promote entry, but little evidence that clusters enhance firm growth and firm survival. The emergence of clusters is best understood as an evolutionary process of capability transmission between parent firms and their spinoffs, rather than as an outcome of localization economies that would increase the performance firms in clusters compared to firms outside clusters. From a number of open questions the authors distil various future research avenues stressing the importance of understanding firm heterogeneity and the exact mechanisms underlying localisation economies.

Statistics & Indicators

The Human Capital Report 2013

World Economic Forum 
The key for the future of any country and any institution lies in the talent, skills and capabilities of its people. With talent shortages projected to become more severe in much of the developed and developing world, it will be imperative to turn our attention to how these shortages can be met in the short term and prevented in the long term. For the individual, as well as for societies and economies as a whole, investing in human capital is critical; even more so in the context of shifting population dynamics and limited resources. Through the Human Capital Report, the World Economic Forum seeks to provide a holistic, long term overview on how well countries are leveraging their human capital and establishing workforces that are prepared for the demands of competitive economies. By providing a comprehensive framework for benchmarking human capital, the report highlights countries that are role models in investing in the health, education and talent of their people and providing an environment where these investments translate into productivity for the economy. In addition, through extensive additional information on the 122 countries covered, the report seeks to provide a fuller picture of the context within which human capital is operating in any particular country.

Policy Digest

The Rejuvenation of Industrial Policy

Joseph E. Stiglitz, Justin Y. Lin, and Celestin Monga, World Bank
This essay is about an important area in which there has been major rethinking — industrial policy, by which the authors mean government policies directed at affecting the economic structure of the economy. The standard argument was that markets were efficient, so there was no need for government to intervene either in the allocation of resources across sectors or in the choices of technique. And even if markets were not efficient, governments were not likely to improve matters. But the 2008-2009 global financial crisis showed that markets were not necessarily efficient and, indeed, there was a broad consensus that without strong government intervention — which included providing lifelines to certain firms and certain industries — the market economies of the United States and Europe may have collapsed. Today, the relevance and pertinence of industrial policies are acknowledged by mainstream economists and political leaders from all sides of the ideological spectrum. But what exactly is industrial policy? Why has it raised so much controversy and confusion? What is the compelling new rationale that seems to bring mainstream economists to acknowledge the crucial importance of industrial policy and revisit some of the fundamental assumptions of economic theory and economic development? How can industrial policy be designed to avoid the pitfalls of some of the seeming past failures and to emulate some of the past successes? What are the contours of the emerging consensus and remaining issues and open questions? The paper addresses these questions.

The consensus among economists and policymakers has grown wider on the need for governments to focus on promoting learning, infant industries and economies, exports, and the private sector, not only in manufacturing but also agriculture and services such as, health, information technology, or finance. Industrial policy is therefore not just about manufacturing. As President Obama argued, “[E]very dollar we invested to map the human genome returned $140 to our economy. Today, our scientists are mapping the human brain to unlock the answers to Alzheimer’s; developing drugs to regenerate damaged organs; devising new material to make batteries ten times more powerful. Now is not the time to gut these job-creating investments in science and innovation. Now is the time to reach a level of research and development not seen since the height of the Space Race. And today, no area holds more promise than our investments in American energy.”

While industrial policies which promote the structural transformation of the economy and which help create a learning economy are two of the central objectives of modern industrial policies, industrial policies may be used to pursue a number of other social objectives especially in developing countries.

Industrial policy has, for instance, been used to correct not only market failures, but also government failures. In some countries and contrary to popular belief, state enterprises have been islands of relatively good governance, even when the economy suffered from massive government failure. A case in point is Brazil’s Banco Nacional de Desenvolvimento Econômico e Social (BNDES, a development bank), which has resisted political pressures rather well through decades of poor political governance. It is credited for having helped quite a few industries take off.

Other new economic functions of industrial policy include addressing distributional issues effectively and promoting employment. Despite a wide convergence of views on these new theoretical underpinnings of industrial policy, there are still some important issues up for debate—especially regarding the scope, instruments, and implementation challenges in the often weak institutional context of developing countries. The competencies of government should affect the choice of instruments, and perhaps the “ambition” of industrial policy. Limited competencies suggest that broad based measures—like those associated with maintaining an undervalued exchange rate—may be preferable to more targeted measures. Important questions asare: If industrial policy is inevitable anyway, what should be done differently to avoid past mistakes? What institutional context is needed to mitigate the risks of state capture and rent-seeking? Is there a fine line between state capture versus most types of public-private partnerships? What is the optimal way of designing and implementing industrial policy in the context of fragile/unstable states where there are pervasive governance/rent-seeking problems?

The papers in Stiglitz and Lin’s new book (2013) debate these questions, identify some basic principles that successful industrial policy arrangements have in common, but also highlight the difficulties of moving from theory to practice. They are organized in four sections. The first one deals with conceptual issues and principles of industrial policy. The second section discusses some of the special issues that developing countries face when designing and implementing industrial policy. The third section of the book is devoted to the instruments of industrial policy, and the fourth section presents regional and country case studies of successful and unsuccessful industrial policies.


Higher Education Institutions and Regional Development

Mönchengladbach, Germany, 14-15 October, 2013
Niederrhein Institute for Regional and Structural Research (NIERS) hosts 3rd ERSA International Workshop. Topic isHigher Education Institutions and Regional Development”. The event takes place at Hochschule Niederrhein – University of Applied Sciences in Mönchengladbach, 14-15 October 2013. The final program will be available shortly.

8th International Seminar on Regional Innovation Policies

Donostia-San Sebastián, Spain, 10-11 October, 2013
This will be the latest in the stream of annual seminars that began in Porto in 2006 and have since been hosted in Saltzburg, Santander, Edinburgh, Grimstad, Lund and again in Porto (2012). These seminars have placed strong emphasis on regions as a key unit for policy analysis, highlighting the role that regional innovation policies can play in building sustainable competitive advantages. At a time when regions across Europe are adapting to new realities brought about by a deep and widespread economic downturn, changing environmental constraints and emerging social challenges, it is more critical than ever to analyze the roles and impacts of regional innovation policies. The seminar provides a meeting point for researchers, policy-makers, academics, practitioners and doctoral students interested in issues related to regional innovation policy, regional competitiveness and regional development. You are invited to present and discuss the results of cutting-edge applied research, and to join in learning together how to better understand regional innovation dynamics and how policies can orient these dynamics towards meeting existing and future regional challenges.

5th Canadian Science Policy Conference 

Toronto, 20-22 November, 2013
The Canadian Science Policy Conference (CSPC) was founded in 2008 by a diverse group of young and passionate professionals from industry, academia, and science-based governmental departments. CSPC serves as an inclusive, non-partisan and national forum uniting stakeholders, strengthening dialogue, and enabling action with respect to current and emerging issues in national science, technology, and innovation policy. The CPSC is a grassroots initiative that thrives on a dynamic and responsive conference structure focused on best serving the needs of the science policy community. Year after year, it has flourished thanks to the efforts of more than 100 volunteers dedicated to engaging members from research, technology, policy, and the general public in thoughtful discussion to improve governance of issues important to Canadian society. The event has experienced tremendous expansion over the course of its 5 years, growing to more than 1,400 attendees. This would not have been possible without the support of over 200 companies, institutions, and agencies, as well as the Advisory and Honorary Committees comprising of more than 70 field-leading experts.

Canadian Innovation Exchange (CIX) 

Toronto, 21 November, 2013
The Canadian Innovation Exchange (CIX) is the foremost destination for key leaders in the innovation economy to learn from one another, explore new relationships and accelerate the development of the ground-breaking technologies, products and services propelling the Canadian economy into the future. This forum attracts the people behind innovative new technologies “entrepreneurs, investors, corporations, service providers, government, and media” for an unparalleled program of visionary keynotes and panel discussions, facilitated networking opportunities, and the CIX Top 20 a showcase of Canada’s hottest innovative companies working in Digital Media and Information and Communication Technology.

Aerospace Innovation Forum

Montreal, 2-4 December, 2013
In a highly competitive global market where environmental regulations are tightening, innovation remains a major competitive advantage for companies. However, to position themselves on future aircraft programs and in the supply chains of major OEMs, companies need new approaches. Instead of working in a silo with the sole aim of creating new products, innovation must now be pursued in a global and systematic way. It must be at the very heart of companies’ critical activities, encompassing design, manufacturing and operations, as well as end-of-life product management. Companies must also innovate in the way they finance new projects and manage, organize and train human resources. These complementary challenges will be discussed in more detail during the Aero Financing and Aero Training seminars that will be held on the third day of the Aerospace Innovation Forum 2013.

DRUID Academy Conference 2014

Aalborg, Denmark, 15-17 January, 2014
The conference is open for all PhD students working within the broad field of economics and management of innovation, entrepreneurship and organizations. We invite papers aiming at enhancing our understanding of the dynamics of technological, structural and institutional change at the level of firms, industries, regions and nations. DRUID is the node for an open international network – new partners are most welcome. We encourage all PhD students to submit their research to the conference. Do not hesitate to apply even if you have not been in contact with DRUID previously. The main emphasis is on PhD presentations. Each PhD student paper will be assigned to a “junior” (a fellow PhD student) and to a senior discussant (from DRUID faculty or invited guests). There will also be a series of keynote speakers in the program. The details of the program, titles of keynote presentations etc. will be continuously updated at the DRUID homepage.

The Geography of Innovation

Utrecht, The Netherlands, 23-25 January, 2014
This conference provides a forum for discussion to scholars and practitioners interested in scientific, policy and strategic issues concerning the spatial dimension of innovation activities. The main objective of this event is to bring together reserachers from a variety of disciplines ranging from economic geography, economics, management science, sociology, network theory, regional science and urban studies. The conference invites contributions in a wide range of topics underlying the geography of innovation, such as: global and local dynamics of innovation; science and technology policy; cluster competitiveness; firms R&D strategies; entrepreneurships; innovation systems; sustainable and social innovation; industrial dynamics and innovation networks.

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