The IPL newsletter: Volume 14, Issue 293

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.


Governor of Massachusetts Announces MassChallenge

From its new home in the Innovation and Design Building, MassChallenge officially opened applications for the 2014 startup accelerator. Governor Deval Patrick, one of MassChallenge’s earliest supporters, and newly elected Boston Mayor Marty Walsh both spoke at the launch event, noting the leadership roles of MassChallenge and Boston in global, innovation-driven economic development. The 2014 MassChallenge accelerator is expected to attract more applicants than ever before as entrepreneurs vie for 128 finalist spots in the program and $1.5 million in cash awards without having to give up any equity.

Chicago, Detroit Win Competition for Newest Manufacturing Hubs

The White House
A Detroit-area based consortium of 60 companies, nonprofits, and universities and a Chicago based consortium of 73 companies, nonprofits, and universities are partnering with the federal government to launch two new manufacturing innovation hubs. The first new manufacturing innovation institute competition this year launched recently, one of four the Administration has committed to launching this year.

Editor's Pick

Industrial Policy for the Medium to Long-Term

Nicholas Crafts and Alan Hughes, Centre for Business Research, University of Cambridge 
This paper is concerned with industrial policy. It is not concerned with an assessment of current policy. It seeks instead to set out the key principles which should guide policy development for the medium to long term. It sets out the different ways in which industrial policy may be defined and the case for governments adopting an industrial policy. The authors emphasize the policy challenges which arise in a world of rapidly developing and potentially transformative new technologies and innovation opportunities. They advocate an approach which adopts a holistic systems perspective. This approach encompasses policies addressing both market and wider system failures and spans the domains of science policy, technology policy and innovation policy as integral to a modern industrial policy. The proposed approach emphasizes both sector and technology specific policy domains. It emphasizes the particular challenges which arise in designing and implementing policy in the specific context of the UK economic system with its particular institutional architecture governing product, labour and in particular capital markets.

Innovation Policy

America Works: Education and Training for Tomorow’s Jobs

National Governors Association (NGA) 
To develop state policies and funding priorities that support economic growth by increasing the quality of its current and future workforce’s education and training, a governor needs better information about the job skills employers require. Pairing that
information with an understanding of how well the skills and education level of a state’s current population matches with projected employment demand, a governor is then well positioned to craft effective education and workforce training policies. Such policies
can be aimed at closing specific skill gaps that yield significant benefits compared to their costs for both the state’s citizens and employers. This report raises awareness about the significant benefits for individuals, businesses, and state economies when governors act to raise their population’s educational attainment and better align their education and training systems with the likely future demands of employers.

Innovation U 2.0: Reinventing University Roles in a Knowledge Economy

Louis G. Tornatzky and Elaine C. Rideout 
Twelve years ago a slim paperback volume was completed and widely distributed by the Southern Growth Policies Board (SGPB), located in Research Triangle Park, North Carolina. It was entitled Innovation U. New University Roles in a Knowledge Economy. The heart of that book was twelve brief case studies of research universities that were doing bold and novel things to foster technological innovation within the institution, as well as to enable technology-based economic development within their region, state, and beyond. Many factors argued for a fresh examination of universities that were being successful at technology innovation and related outcomes. In recognition of the lessons learned with regard to longevity and sustainability, the current study’s second look is based on different and more structured methods of case selection than the earlier study.

Strengthening UK Supply Chains: Good Practice from Industry and Government

UK Department for Business, Innovation and Skills (BIS) 
Supply chain collaboration has the potential to unlock solutions for some of today’s most pressing business challenges, in skills, access to finance, innovation and supply chain efficiency. This paper sets out 12 business challenges where collaborative supply chain approaches are providing solutions. In each, industry and government have developed initiatives which seek to address these challenges.

Restructuring in France’s Innovation System: From the Mission-Oriented Model to a Systemic Approach to Innovation

Mafani Dosso 
The paper discusses the transitional phase of the French innovation system focusing on the activities that influence the development and diffusion of innovations. It shows that the current system combines persistent elements of the traditional mission-oriented model with new systemic institutional structures, thus lengthening the transition towards a new model of innovation. Indeed the introduction of a bulk of reforms in a very short time, the lack of a clear long run agenda, the institutional inconsistencies have blurred the research and innovation policy trajectory and may affect the performances of France’s innovation system in the coming years.

Cities, Clusters & Regions

What Do the Best Entrepreneurs Want in a City?

Endeavor Insight
With research culled from surveys and interviews with 150 founders of some of the fastest growing companies in the U.S., the report offers some important takeaways for urban leaders. Studies show that entrepreneurs often look to large cities rather than less urban areas to start their ventures and tend to stay put as their firms grow, with a majority of the founders surveyed living in metropolitan regions with populations of over one million. With this in mind, Endeavor Insight set out to explore the key elements of cities that allow them to attract and retain high-impact businesses, and the steps that leaders and policymakers can take to equip their cities for entrepreneurial growth. The research uncovered a few key lessons on what makes certain cities more attractive than others. While a strong quality of life, talent pool and customer base were the most cited considerations, there was also a surprising lack of mention of business-friendly regulation as a factor. City leaders who dedicate resources to fostering these identifiable characteristics have the highest potential of drawing the types of innovative entrepreneurs, companies and jobs that can transform their local economies.

Statistics & Indicators

R&D Behavior of German Manufacturing Companies During the 2008/09 Recession

Alexander Eickelpasch, DIW Berlin 
This paper investigates to what extent the R&D behavior of manufacturing companies was influenced by the 2008/09 crisis. Based on a broad official data set for German manufacturing companies, only a few companies that engaged in R&D during 2008 gave it up in the following year. Some companies even started R&D during crisis. R&D expenditures declined in 2009 compared to 2008, but expanded in 2010. The development of R&D expenditures was less volatile than sales. Probit analyses show that the occurrence of R&D in 2009 is very much determined by engagement in R&D in 2008 and that changes in demand are not relevant. However, fluctuation in demand proved to be relevant in the regressions computed where the intensity of R&D expenditures was the dependent variable. This result suggests that companies reacted counter cyclically in 2008/09, i.e. the reduction in R&D was smaller than the decline in demand, or the expansion of R&D expenditures was greater than the change in demand. Similar regressions for using R&D staff as the dependent variable did not find any influence of changes in demand. The results suggest that companies see R&D as a longer term task necessary to retain competitiveness.

The Efficiency of Universities’ Knowledge Transfer Activities: A Multi-Output Approach Beyond Patenting and Licensing

Federica Rossi, Birkbeck University 
Using data from the United Kingdom, this paper analyzes the relative efficiency of university institutions in using their financial and human resources to produce a broad range of knowledge transfer outputs, including intellectual property disclosures, research and consultancy contracts, training activities, and public events. The efficiency of this multi-input, multi-output transformation process is computed using data envelopment analysis. Including a broader range of knowledge transfer outputs in the computation of efficiency allows us to appreciate that some universities that do not focus mainly, or exclusively, on the filing and commercialization of intellectual property, can nonetheless efficiently deploy their generic inputs in order to produce knowledge transfer outputs. Universities that operate at a lower scale in terms of input employment and that have smaller knowledge transfer operations (in terms of income from knowledge transfer) are more likely to be efficient, although some institutions operating at a very large scale are also efficient. Specialization in a few subject areas, as opposed to having a very diversified subject composition, is strongly linked to efficiency.

Policy Digest

Powering Advanced Industries: State by State

Mark Muro, Kenan Fikri and Scott Andes, The Brookings Institution 
More than four years after the Great Recession, America’s economic rebound remains anemic. Despite recently improved forecasts, the nation still faces a job deficit of nearly 8 million, elevated poverty, a negative trade balance, and persistent questions about the competitiveness of its industries and workforce. Across the country, smart, ambitious states and regions are stepping up to grow jobs and make their economies more competitive and prosperous by locking their focus onto what the Brookings Metropolitan Policy Program and our associates at McKinsey & Company call “advanced industries.” Advanced industries—the nation’s most strategic innovation and STEM (science, technology, engineering, and math) worker-intensive industries—are prime movers of regional and national prosperity in developed countries. This report details how efforts to expand America’s advanced industries point to an important new priority for economic discussion, research, and work to renew the nation’s economy in support of broad-based prosperity.

America’s Advanced Industries: Why States are Acting 
Expanding the nation’s AI sector will not be easy, however. Strong challenges from other nations, inconsistent engineering and workforce training systems, and negative trade balances in some AIs mean that U.S. dominance of the global sector is contested. Moreover, while efforts to expand the AI sector will largely depend on private initiative, political paralysis in Washington has stalled
needed national action on R&D investment, skills-building, taxes, trade, and infrastructure. The United States now trails many global competitors in terms of R&D investment as a percentage of GDP, STEM education and training, tax policy that promotes investment and innovation, and trade deals.
As a result, leading states and metropolitan areas are acting on their own—in collaboration with their most strategic industries—to support innovation, invest in local industry clusters, drive trade, and build the STEM skills base for the next round of AI growth.

The Colorado and Tennessee Examples

In Colorado, the looming threat of last year’s federal budget sequestration prompted a serious reassessment of the
state’s sizable space and aerospace industry cluster.

This flourishing industry concentration supports some 66,000 direct jobs across the public, private, and civic sectors—
not only in the aerospace industry proper, which employs 25,000 Coloradans, but also in those industries that directly
support or use space systems, including satellite imagery, telecommunications, custom IT, and location-based apps.
However, Colorado industry and government leaders had increasingly come to recognize serious long-term challenges:
reduced government spending, new customer demands and competitors, and a looming skills shortage due to an
aging workforce.

In response the Colorado General Assembly passed the Advanced Industries Accelerator Act with bipartisan support, launching a competitive 10-year, $15-million-a-year matching grant program to encourage applied research collaborations, foster technology commercialization, and provide support for early-stage AI companies. The state announced the first round of winners in late 2013 and is now accepting a second round of applications. Legislation has recently been introduced to increase the program’s funding given its oversubscription.

In addition, the state—working with industry—has taken other steps to bolster its position in new space and aerospace markets. Hickenlooper has appointed a new chief innovation officer and its first aerospace and defense industry “champion” to drive innovation-oriented networking and economic development. Simultaneously, the state has established an Advanced Industries Export Grant to provide financial assistance to aspiring and current advanced industry exporters. The state is also now conducting a comprehensive AI assessment and roadmap to better understand how its AIs relate to one another as part of an effort to identify cross-cutting strategies for growing AIs statewide.

In Tennessee, the auto industry had entered its own challenging period in 2013 as it consolidated efficiency gains made during the Great Recession and began to grow again.

With more than 94,000 employees—anchored by major assembly plants operated by Nissan, GM, and Volkswagen— the state industry had staked out a position as a lower-cost production alternative to Detroit and had exited the economic crisis with genuine momentum. At the same time, industry and government leaders saw unprecedented challenges. The rise of Mexico’s auto industry now posed a direct challenge to the state’s core advantage, while the new demands of high-tech production systems required a different, more agile workforce. Overall, the innovation imperative was sharpening, with regulations and shifting consumer demand requiring the implementation of new technology throughout the automotive manufacturing process.

To address the state’s workforce challenges, Governor Haslam this month proposed a series of AI-relevant initiatives aimed at
further aligning the state’s education and training systems with industry needs. In addition to making two years of community college education free to any graduating high school senior, the state’s new skills strategy includes several proposals including the creation of a director of workforce alignment reporting to the governor, the establishment of a new sub-cabinet linking the relevant state agencies to force more coordination, the provision of new data and support resources to encourage collaboration between education and industry, and the creation of a new $10 million Skills Gap Grant Competition. This competition will incite and reward the development of creative, industry-aligned workforce training initiatives in Tennessee regions.

Finally, to promote innovation, the state last year established an auto technologies accelerator (the autoXLR8R) in Tullahoma, TN as part of LaunchTN, one of the country’s first statewide accelerator networks. More recently, the state has partnered with Oak Ridge to design a mechanism to facilitate technology exchange between the state’s manufacturers and the laboratory. The program, called Revv!, will award $2.5 million in state funds in variably sized innovation vouchers to competitively selected firms for the purchase of R&D services from the lab. The program will help Tennessee suppliers respond to the innovation imperative while also promoting exchange between a world-class institution and the state’s AI clusters.


Budget 2014: Re-balancing Innovation Support Programs

Ottawa, 22-23 April, 2014
he 13th annual RE$EARCH MONEY conference continues our examination of the implications of recent federal budgets for business innovation support. This year, we will look at how Budget 2014 builds on the last two budgets, in particular the extent to which the government is changing the balance between indirect and direct support of firms and the balance between supporting basic and applied research in academia and academic-industrial research collaboration. We’ll also look at implications of the anticipated update to the federal government’s science and technology strategy, should it be released with the 2014 budget or before, and examine progress being made with the federal government’s new VC fund and its support for accelerators and other innovation intermediaries. In smaller breakout sessions we’ll dig deeper into specific opportunities being pursued in Canada in the digital economy, new industries based on genomics and quantum computing and new sources of funding such as crowdfunding, impact investing.

Smart to Future Cities 2014

London, 29-30 April, 2014
At Smart to Future Cities 2013, the emphasis was on how the market is at an inflection point between talking about what “smart city” means and understanding how to implement it. The evidence of the shift was in the increasing maturity of the demand side, the development of standards, and the arrival of investment in the form of stimulus funding from government, sovereign wealth funds, and venture capital. In 2014 we will be looking at the move of Smart Cities into the mainstream as we see governments commit finance and policy to smart city development, deployments of smart city protocols and operating platforms and acceptance of smart technologies as the norm in transport, energy, development, assisted living and security in cities.

CFP – The Organization, Economics and Policy of Scientific Research

Torino, Italy, 19-20 May, 2014
The aim of the workshop is to bring together a small group of scholars interested in the analysis of the production and diffusion of scientific research from an economics, historical, organizational, and policy perspective. As in previous years, we aim to attract contributions from both junior and senior scholars; a minimum number of slots are reserved for junior researchers (PhD students or postdoc scholars who obtained their PhD in 2011 or later). The workshop aims at including papers form various streams of research developed in recent years in and around the area of public and private scientific research. 

CFP – Second International ZEW Conference on the Dynamics of Entrepreneurship (CoDE II)

Mannheim, Germany, 22-23 May, 2014
The formation, growth and exit of firms are crucial for innovation, employment and structural change in modern economies. The aim of this conference is to discuss recent scientific contributions on the interdependencies between finance, human capital, innovation activities and investment activities of young firms. Papers introducing recent theoretical, econometric and policy-oriented studies from all areas of the entrepreneurship research management are invited.

Industry Studies Association Annual Conference 

Portland, Oregon, 27-30 May, 2014
The Industry Studies Annual Conference draws scholars from a wide range of disciplines who present findings from research at the cutting edge of the academic literature in their areas of specialization. Research presented at the conferences very often focuses on issues of immediate interest to industry and public policy.

Photonics North 2014

Montreal, 28-30 May, 2014
This year’s conference sessions include: Green photonics, energy and related technologies; Optical communications; Optoelectronics and integrated optics; Photonic materials; Nonlinear optics, nanophotonics and quantum optics; Photonic sensors and biomedical optics and more.

CFP – Mapping Culture: Communities, Sites and Stories

Cimbra, Portugal, 28-30 May, 2014
The Centre for Social Studies (Centro de Estudos Sociais – CES), a State Associate Laboratory at the University of Coimbra in Portugal, is calling for the submission of papers and panel/workshop proposals from academics, researchers, public administrators, architects, planners and artists for an international conference and symposium. The CES is committed to questions of public interest, including those involving relationships between scientific knowledge and citizens’ participation.

Business Innovation Summit 2014: Accelerating Corporate Innovation and Commercialization

Toronto, 28-29 May, 2014
The objective of this conference is to help companies of all sizes across Canada harness the power of innovation, and accelerate their innovation and commercialization results. The Summit is exploring the real-life challenges and opportunities of innovation within firms, and is featuring tangible solutions that work. We are assembling an outstanding lineup of Canadian and international speakers to share best practices and unique insights on how to implement effective processes and build innovative organizations for the 21st century.

Creative City Summit 2014: Love Your City – Transforming Communities Through Culture

Hamilton, Ontario, 11-13 June, 2014
Through interactive sessions, case studies and keynote addresses, experts will share real world projects that are transforming cities across the country. The 2014 Summit theme focuses on communities that are creating conditions in which culture can thrive.  Presenters will explore how leadership, innovative thinking, partnership building, and simply doing things differently can lead to a creative community. Delegates will gain insight into integrating culture within other local planning initiatives; encouraging and stimulating “eventful” cities; planning community wide participatory events; initiating creative placemaking projects; and creating cultural hubs in their community.

DRUID Society Conference 2014: Entrepreneurship-Organization-Innovation 

Copenhagen, Denmark, 16-18 June. 2014
he conference will include a number of distinguished plenary presenters and intends to map theoretical, empirical and methodological advances, contribute with novel insights, clarify and develop intellectual positions and help identify common grounds and lines of division in selected current scientific controversies within the field. In 2014, the DRUID Special Flavor will be on Food Innovation. During the last decade, the food industry has seen notable innovation and entrepreneurship throughout its value chain, including, for example, search for original raw materials, adaption of advanced process technologies, exploration of new cooking methods and development of unique restaurant models. DRUID2014 will feature scientific as well as social activities reflecting Food Innovation, including paper sessions on innovation and entrepreneurship in the food industry, talks by leading chefs, and samples of innovative food and drink. With its New Nordic Cuisine, a burst of new Michelin-starred restaurants, and capturing the World’s Best Restaurant as well as Bocuse d’Or awards for several consecutive years, Copenhagen has established itself at the heart of food innovation. In addition, there is a broader movement around the notions of regional and modernist cuisine. The DRUID Society will of course take advantage of its local connections to present conference participants with samples of just how innovative the local food scene can be.

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