News from the IPL
ANNOUNCEMENTS
Ontario Launching New Fund to Develop Globally Competitive Clusters
Ontario Ministry of Economic Development, Employment and Infrastructure
Ontario is partnering with the Ontario Chamber of Commerce to launch a new fund to help develop globally competitive clusters that will fuel innovation and productivity across the province. The Cluster Development Seed Fund offers grants of up to $100,000 to support networking activities or research and feasibility studies that will lead to the growth of more competitive clusters. A cluster is a geographic concentration of interrelated businesses and other organizations. Examples include Kitchener-Waterloo’s information and communications technology cluster, the life sciences cluster in Toronto, and Sarnia-Lambton’s chemical cluster. Strong clusters can help attract new investment and business to regions, creating more high-value jobs and economic growth throughout Ontario. This fund complements Ontario’s Partnerships for Jobs and Growth Act, which strengthens connections between organizations to drive the global competitiveness of emerging and established clusters.
NIST to Fund Two New Manufacturing Institutes
National Institute of Standards and Technology (NIST)
The U.S. Commerce Department’s National Institute of Standards and Technology (NIST) recently issued a Notice of Intent to fund up to two institutes as part of the National Network for Manufacturing Innovation (NNMI). For its first institutes, the Commerce Department will provide up to a total of $70 million per institute over five to seven years. Commerce funding must be matched by private and other non-federal sources. The institutes are expected to become self-sustainable within the time period of the award. The NNMI Institutes bring together manufacturers, universities, community colleges, federal agencies and state organizations with the goal of bridging the gap between basic research and product development. They aim to accelerate innovation by focusing investment in industrially relevant, pre-competitive manufacturing technologies with broad applications. The institutes also give manufacturers access to shared assets such as cutting-edge equipment and provide opportunities for workforce training. Seven institutes are already operating across the country, with two more under formation, funded primarily by the U.S. Departments of Defense and Energy. All of the institutes collaborate through the Advanced Manufacturing National Program Office, which was established at NIST in 2012 to support the NNMI.
New York State Announces over US$2 Billion in Investments at NY’s Regional Economic Development Awards
SSTI Weekly Digest
New York Gov. Andrew Cuomo announced $2.25 billion in economic and community development awards as part of the fifth installment of the state’s Regional Economic Development Council (REDC) Initiative. Of this total, $1.5 billion over the next five years will go to the three regions (Central New York, Finger Lakes, and the Southern Tier) that were selected as the winners of the Upstate Revitalization Initiative. While the proposals receiving awards vary greatly across region, several TBED-related initiatives are seeded through the governor’s funding. The REDC initiative is a key component of Gov. Andrew Cuomo’s approach to economic development. In 2011, Cuomo established 10 Regional Councils, comprised of public-private partnerships of local stakeholders, to develop long-term strategic plans for economic growth. This year, the 10 Regional Councils again competed for up to $750 million in state economic development resources as part of Round V of the REDC competition. The governor also established the Upstate Revitalization Initiative (UR), which awards a total of $1.5 billion to three regions over the next five years. The three regions selected as winners of the URI were Central New York (Syracuse), Finger Lakes (Rochester), and the Southern Tier.
Three Metros, AT&T Partner to Develop Smart Cities Framework
AT&T has announced a new partnership with three U.S. metros to establish a Smart Cities Framework using Internet of Things (IoT) innovations to create solutions for cities. In the first stage of the effort, Atlanta, Chicago, and Dallas will showcase the potential use of sensors and other Internet-connected technologies to improve municipal services. In addition to existing services offered by AT&T, the new framework adds several new services in four categories: infrastructure; citizen engagement; transportation; and, public safety. To help support the new framework, AT&T has formed alliances with Cisco, Deloitte, Ericsson, GE, Georgia Institute of Technology, IBM, Intel, and Qualcomm Technologies, Inc.
Editor's Pick
David A. Wolfe, “Introduction” to Richard, G. Harris, Trade, Industrial Policy and International Competition, Second Edition, McGill-Queen’s University Press, Montreal and Kingston, 2015: vii-xxxi
Richard Harris’s study on trade and industrial policy was written for the Royal Commission on the Economic Union and Development Prospects for Canada (the Macdonald Commission). First published in 1985 when the Canadian economy faced dramatic changes arising from the emergence of manufacturing competitors among newly industrialized nations and increased protectionism in the US, the monograph addressed the key issues facing the Canadian economy at that critical juncture, most importantly the intersection of trade, competitiveness and industrial policy. David Wolfe’s new introduction situates this classic work within its time and shows how Harris’s analytical insights and policy prescriptions are as relevant today as when they were originally crafted three decades ago.
“The great virtue of this monograph is the way it draws on many of the streams of conventional economic thinking familiar to policy makers to reach unconventional conclusions that go against the grain of that thinking. It is all too rare in policy-related research that we can return to something written thirty years ago and find that its analytical insights and policy prescriptions are as relevant today as they were then. In this competitive economic environment, the arguments and policy prescriptions in Richard Harris’s book should not be ignored again. Hopefully, its timely republication in the Carleton Library Series will reopen the policy debate in Canada about the future direction in which we need to go.”
Innovation Policy
The Future of Productivity
OECD
This book addresses the rising productivity gap between the global frontier and other firms, and identifies a number of structural impediments constraining business start-ups, knowledge diffusion and resource allocation (such as barriers to up-scaling and relatively high rates of skill mismatch). Analysis based on micro and industry-level data highlights the importance of reallocation-friendly policies, including well-functioning product, labour and risk capital markets, efficient judicial systems, bankruptcy laws that do not excessively penalize failure, housing policies that do not unduly restrict labour mobility, and improvements in public funding and organization of basic research which do not excessively favour applied vs basic research and incumbents vs young firms.
Five Ways Canada’s Startup Ecosystem Can Catch the World’s Top Innovators
Marcus Daniels, Financial Post
Looking back on 2015, the Canadian startup ecosystem has had a number of reasons to celebrate, including Shopify’s initial public offering and several venture capital-backed startups attracting major follow-on rounds. However, when it comes to startup success Canada still has a long way to go to catch up with the world’s top players. Here are five things Canadian startups could benefit from in 2016.
Cities, Clusters & Regions
The Winners and Losers of Economic Clustering
Richard Florida, Roger Martin, Melissa Pogue and Charlotta Mellander, The Martin Prosperity Institute (summary published by CityLab)
This summary of a new study published as part of a special journal issue in honor of the 25th anniversary of Michael Porter’s landmark book, The Competitive Advantage of Nations. Porter is known for his research on the role of clusters of firms in economic development. This study explores the advantages and disadvantages of clustering, and of pursing development strategies built on clustering to the socioeconomic fabric of metropolitan regions. The findings are stark. Higher wages in metros with larger creative-in-traded employment create greater incentives for more skilled and advantaged workers to migrate to these metros. As housing costs rise, routine workers—especially those in routine-in-local jobs—are shunted off to less expensive metros which, by definition, have smaller concentrations of higher-paying creative-in-traded jobs. This creates a vicious cycle in which the advantaged become more advantaged over time, while the disadvantaged sink further into poverty. This spiky and unequal nature of the new economy provides a substantial challenge to local and national policymakers.
Statistics & Indicators
Broadband Adoption Rates and Gaps in U.S. Metropolitan Areas
Adie Tomer and Joseph Kane, The Brookings Institution
For many Americans, daily life orbits around a high-speed Internet connection. Workers and students go online to communicate and learn. Families stay in touch through live video feeds. Job seekers often need an electronic resume and an email address for applications. Smartphones put maps, social networks, and video streams in people’s pockets. The American economy has gone digital. There is no question that the Internet is a huge boon to the economy and society, but maximizing its potential is only possible if all individuals are online. As a result, it is critical that policymakers closely track broadband adoption rates: the share of households with a DSL, cable, fiber optic, mobile broadband, satellite, or fixed wireless subscription. This brief uses 2013 and 2014 American Community Survey data to track current and changing broadband adoption rates at the metropolitan scale, while using a combination of other Census and Internet speed data to model what factors affect metropolitan adoption rates. In turn, the results of this analysis have clear implications for efforts to address the significant gaps in American Internet adoption.
The Most Innovative Companies 2015: Four Factors that Differentiate Leaders
Boston Consulting Group
Innovation continues to rise in importance. In The Boston Consulting Group’s tenth annual global survey of the state of innovation, 79% of respondents ranked innovation as either the top-most priority or a top-three priority at their company, the highest percentage since we began asking the question in 2005, when 66% said innovation was their top or among their three top priorities. At the same time, science and technology continue to be seen as increasingly important underpinnings of innovation, enabling four attributes that many executives identify as critical: an emphasis on speed, well-run (and very often lean) R&D processes, the use of technological platforms, and the systematic exploration of adjacent markets.
Mapping 65 Years of Explosive Urban Growth
Tanvi Misra, CityLab
In 1950, only 30 percent of the world’s population lived in cities, compared with 54 percent in 2015. A new map by urban geographer Duncan Smith tracks the bursts in city populations that contributed to this growth. In its 2014 World Urbanization Prospects report, the UN tracked the populations of major cities from 1950 to 2014, then predicted how these populations would grow (or shrink) up to the year 2030. Using these data, Smith represented each city on his map with a dark blue core, the size of which is proportional to the city’s 1950 population. The concentric circles around that core, in lighter blue, vary according to the city’s population in 1990, 2015, and 2030.
The Most Innovative States in America
Bloomberg
The Bloomberg U.S. Innovation Index scored each of the 50 states on a 0-100 scale across six equally weighted metrics: R&D intensity; productivity; high-tech density; concentration of science, technology, engineering and mathematics (STEM) employment; science and engineering degree holders; and, patent activity. The data also show the limits of measuring healthy innovation. For example, the migration of talent across state lines can be difficult to measure and often captured only on delay, such as through U.S. Census bureau figures.
Policy Digest
Why Countries Need National Strategies for the Internet of Things
Joshua New and Daniel Castro, Center for Data Innovation
The Internet of Things offers many opportunities to grow the economy and improve quality of life. Just as the public sector was instrumental in enabling the development and deployment of the Internet, it must play a similar role to ensure the success of the Internet of Things. Therefore, national governments should create comprehensive national strategies for the Internet of Things to ensure that the technology develops cohesively and rapidly, that consumers and businesses do not face barriers to adoption, and that both the private and public sector take full advantage of the coming wave of smart devices.
What is the Internet of Things?
Traditionally, most Internet users have been people: individuals sending email, reading the news, shopping online, and the like. But in the near future, most users will be machines: a vast array of ordinary devices that are equipped with sensors and networking capabilities so they can collect and share data with people and other devices. In fact, we are already well on our way toward building the Internet of Things (IoT). As the cost of deploying smart devices declines, homes, factories, farms, office buildings, and even cities are generating vast quantities of data that can be collected, analyzed, and acted upon. Data from these connected devices is creating tremendous opportunities to generate economic and social benefits, ranging from sensor-equipped bridges that can alert authorities if there is a risk of structural failure to waterways that can warn environmental regulators about spikes of fatally toxic algae.
Why a National Strategy?
While the private sector can successfully develop many valuable technologies on its own, particularly those technologies with few network effects, the Internet of Things is different. To be sure, the private sector will be the primary driver of the Internet of Things as its potential benefits create enormous incentives to invest and deploy the technology. However, the Internet of Things is subject to an array of market failures that could limit these incentives and thus slow progress toward a fully connected world. Additionally, if poorly designed, government regulations can make deploying IoT technologies more expensive and less valuable. Furthermore, governments can help bridge the divide between those communities and individuals who are able to fully benefit from the Internet of Things and those who cannot based on market forces alone. Because of these three factors—market failures, the need for an innovation-friendly regulatory environment, and the need to promote equity—governments should develop comprehensive national strategies that remove obstacles and support development and widespread adoption of the technology.
1. Market Failures
If left solely to market forces, the development of the Internet of Things will fail to reach its full potential. These market failures include:
- Externalities, including network externalities;
- Chicken and egg dynamics;
- Risk and uncertainty;
- Competitiveness externalities;
- Interoperability;
- Public goods.
2. Innovation-Friendly Regulation
Excessive or poorly-designed regulations can significantly slow the growth of the Internet of Things. Yet some policymakers have suggested that they want to develop new rules and regulations specifically for the Internet of Things, particularly as it relates to privacy. For example, the U.S. Federal Trade Commission has expressed support for requiring the practice of data minimization for data generated by the Internet of Things—limiting the collection and retention of data so it can only fulfill specific, predefined purposes. Applying such rules to the Internet of Things would be damaging as there may be one primary reason to collect data, but innumerable other ways to use the same data beneficially beyond its initial purpose. And, with so many new opportunities to collect data from billions of new connected devices, the value of the data at stake is proportionately large. Furthermore, mandating data minimization practices can preclude opportunities for de-identification, which can protect sensitive information without unnecessarily sacrificing its value.
A national strategy for the Internet of Things can forestall such problems by sending a clear message to legislators and regulators that this technology is important and that over-regulation or poorly-designed regulation would limit its growth. Moreover, a national strategy can encourage legislators and regulators to focus on regulations that would expand, rather than limit use of the Internet of Things. For example, regulations designed to free up energy consumption data from smart meters, which are traditionally locked down by utility companies, can empower consumers to reduce their energy use and spur the development of new analytics services.
3. Equity
The Internet of Things can be a valuable tool to help meet the needs of underserved populations, but without appropriate public policies such as ensuring that smart city technologies serve all cities and neighborhoods rather than just affluent ones, adoption will be uneven. Failure to do so will limit the value of such systems as a whole because of the network effects that widespread deployments generate. For example, smart city technology that police departments use to reduce crime would be substantially less effective if they could only analyze data from certain neighborhoods. A more pressing concern for governments is that many people and communities live in “data poverty”—the result of a routine lack of inclusion in public and private data collection efforts. As the world increasingly relies on data to improve services such as health care, education, and finance, the potential harm of being underrepresented or excluded in the data that drives this decision-making also increases. The Internet of Things offers a valuable opportunity to close this divide. Low-cost sensor technologies and networked services empower underserved populations to more easily provide data that is useful for improving their quality of life. However, this can only happen if governments invest in and deploy these technologies equitably. If the public sector does not take this into account, the Internet of Things could exacerbate existing inequalities by providing the benefits of data-driven decision-making only to some, and placing already underserved communities at an even greater disadvantage.
Events
Regional Studies Association Annual Conference 2016 – Building Bridges: Cities and Regions in a Transnational World
Graz, Austria, 3-6 April, 2016
Throughout history, cities and regions have been cornerstones of economic, social and cultural institution building and centres of communication and trade across borders of empires and nations. In a globalized world dominated by multi-level governance and declining economic and political significance of the nation-state, cities and regions are becoming ever more so important in building bridges across nations, supra-national unions, and even continents. These challenges surpass the usual aspects of integration: it is not sufficient to reduce barriers for the mobility of labour, goods, services and capital, to create a homogeneous competitive environment, and a solid monetary system. What is needed in addition are more elements of a new regionalism, which is based on non-hierarchical relationships, on self-government, and on the creation of flexible alliances leading to inter-regional transnational cooperation. The development of a region is affected by its competitive and complementary relationships with other increasingly distant regions. These relationships have to be embedded in an overall structure of relations which encompass the purely economic ones and have strong social, cultural, legal and political dimensions. The objective of the conference is to initiate an interdisciplinary dialogue about the future of a transnational world of urban and regional cooperation. We welcome submissions from researchers, policy makers and practitioners working in all areas of regional analysis.
The Organization, Economics and Policy of Scientific Research
Torino, Italy, 9-10 May, 2016
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 2013 or later). Up to 18 papers will be selected from open submissions on the basis of peer review. 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.
Regional Studies Association 2nd North American Conference: Cities and Regions: Managing Growth and Change
Atlanta, Georgia, 16-17 June, 2016
In the wake of the global financial crisis, cities have searched for new policies and practices capable of addressing major shifts in socio-economic relations at the urban and regional scale. These divergent and differentiated efforts have led to the intensification of underlying problems in some cities and a return to growth in others. Regional policies, particularly in the North American context, responded to economic challenges by adopting new technologies and new institutional and organizational forms to manage growth and change at the city scale. The result is a complex and uneven landscape of public and private actors delivering financial services, scaling-up supply chains, coordinating firm networks, diffusing process and material innovations, and organizing new forms of civic representation and participation. This conference provides a platform for researchers to address the effects of these policy, organizational, and institutional innovations and their impact on work, identity, governance, production networks, infrastructure investments, technology diffusion, and ultimately place. The conference will focus on the policy implications of emerging forms of governance and policy delivery relative to uneven development and inequality in a post-crisis era of ongoing market liberalization, financialization, and global competition.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.