The IPL newsletter: Volume 18, Issue 372

News from the IPL


$150 Million Seed Fund to Invest in Heartland

SSTI Weekly Digest
The recent announcement by Revolution of the creation of a $150 million Rise of the Rest Seed Fund for companies located outside of Silicon Valley builds on Steve Case’s tour to connect with entrepreneurs throughout the middle of the country. The Rise of the Rest Seed Fund enjoys the backing of more than three dozen investors and is intended to provide support and connections to entrepreneurs in small towns and underserved cities.  In order to get investors to change the way they think about the rest of the country, Case said the main goal is “to generate top returns.” The Revolution website states that “some of the most compelling investment opportunities in the next decade will likely emerge from startups in cities all across the United States.”

$755 Million Awarded for NY Regional Economic Development

SSTI Weekly Digest
Gov. Andrew Cuomo announced more than $755 million in economic and community development funding awarded through Round VII of the Regional Economic Development Council initiative. The Regional Councils were established in 2011 as a community-based and performance-driven approach to economic development. Each of the 10 regions of the state must develop strategic plans tailored to their region. Each region also competed for designation as a “top performer,” to receive up to $20 million in additional Empire State Development grant funding.

Editor's Pick

The City and Innovation

Patrick Adler, Richard Florida, Karen M. King, and Charlotta Mellander, Martin Prosperity Institute
Theory and research on innovation and entrepreneurship focus on the firm as a unit of analysis. This paper argues that the city, or place and space, has emerged as a key organizing unit for both innovation and entrepreneurship. The city organizes the key inputs for the processes of innovation and entrepreneurship, by concentrating human capital, firms, knowledge, knowledge-based institutions and other key inputs. The authors advance this framework by exploring the geographic clustering of a key indicator of commercially-relevant innovation and entrepreneurship – venture capital investment in high-tech companies. They chart the geography of innovation both across and within cities, at both the metro level and the district or neighborhood level for all venture-capital backed startups and for startups in digital industries. The findings indicate that such commercially relevant innovation is concentrated at two key geographic scales. At the macro-level, it is highly clustered and concentrated in a relatively small number of global cities or metro areas. At the micro-level, it is highly concentrated at tight neighborhood level micro-clusters within these leading cities and metro areas.

Innovation Policy

The Competitive Edge: A Policymaker’s Guide to Developing a National Strategy

Robert D. Atkinson, ITIF
In a deeply integrated global economy with a growing number of industries tradeable across borders, more nations are competing for high-value-added, traded-sector industries. These nations know that losing the competitiveness race means fewer jobs and slower growth. Despite this, few nations, including the United States, have developed sophisticated competitiveness strategies. Rather, most competitiveness strategies focus on broad measures such as improving the business environment or supporting better factor inputs for firms. While necessary, these steps do not constitute an effective competitiveness strategy. Policymakers must go much deeper. An effective competitiveness strategy starts with a detailed “SWOT” analysis—assessing strengths, weaknesses, opportunities, and threats—for key traded industries and the country’s overall innovation system. It then tailors policy responses according to the findings.

Industrial Strategy: Building a Britain Fit for the Future

Department for Business, Energy, and Industrial Strategy
This strategy outlines a number of striking commitments. These include a plan to increase R&D spending from 1.7 percent to 2.4 percent of GDP, £406 million for STEM training, £1 billion for network infrastructure and a new £2.5 billion investment fund. Like many similar U.S. state industrial reports, the UK paper clarifies its intention to focus its investments in key sectors, namely: artificial intelligence and data, clean energy, mobility/transportation and the “needs of an aging society.”

Clusters & Regions

Degrees of Difficulty: Boosting College Success in New York City

Tom Hilliard, Center for an Urban Future
If New York City is going to make progress in reducing inequality, it will need to boost graduation rates at the city’s community colleges and public four-year colleges. A new report we published last week found that while a college credential has become the most reliable springboard to the middle class, 3.3 million city residents over 25 lack at least an associate’s degree. And New York isn’t closing this credential gap fast enough: far too many of the students who enroll in the city’s community colleges and four-year colleges drop out without earning a credential. This report calls on Mayor de Blasio and Governor Cuomo—not just leaders at CUNY and the city’s Department of Education—to take new steps in 2018 to tackle New York City’s college success problem.

Strength in Numbers: Targeting Labour Force Participation to Improve Prosperity in Ontario

Institute for Competitiveness and Prosperity
In its 16th Annual Report, the Institute analyzes Ontario’s GDP per capita compared to ten similar peer jurisdictions (Ohio, Wisconsin, Indiana, the Netherlands, Tennessee, Sweden, Michigan, Australia, British Columbia, and Québec) and analyzes the labour force participation rate of youth, women, older workers, and Indigenous Peoples in Ontario. The analysis reveals that Ontario continues to experience a ‘prosperity gap’ – GDP per capita is $5,600 below its peer jurisdictions. Removing the barriers faced by these four groups has the potential to close Ontario’s prosperity gap and could add $54.0 billion to the economy.

Statistics & Indicators

Best Performing Cities Europe

Jessica Hackson, Minoli Ratnatunga, with Ross DeVol, The Milken Institute
The Milken Institute’s inaugural Best-Performing Cities Europe index provides a way to measure which European regions offer the greatest opportunities for prosperity across the continent. The ranking measures metropolitan areas’ economic performance using outcomes-based metrics including job creation, wage gains, manufacturing, and skilled service industry concentration. Inner London-East, with its dynamic economy, flourishing information and communication technology sectors, and skilled international workforce is Europe’s Best-Performing City, according to this Index. In fact, three of London’s component regions classified by Eurostat’s Nomenclature of Territorial Units for Statistics ranked among the top tier of 279 regions evaluated in the report.

Artificial Intelligence Index 2017 Annual Report 
Artificial Intelligence has leapt to the forefront of global discourse, garnering increased attention from practitioners, industry leaders, policymakers, and the general public. The diversity of opinions and debates gathered from news articles this year illustrates just how broadly AI is being investigated, studied, and applied. However, the field of AI is still evolving rapidly and even experts have a hard time understanding and tracking progress across the field. Without the relevant data for reasoning about the state of AI technology, we are essentially “flying blind” in our conversations and decision-making related to AI. Created and launched as a project of the One Hundred Year Study on AI at Stanford University (AI100), the AI Index is an open, not-for-profit project to track activity and progress in AI. It aims to facilitate an informed conversation about AI that is grounded in data. This is the inaugural annual report of the AI Index, and in this report we look at activity and progress in Artificial Intelligence through a range of perspectives. This report aggregates data that exists freely on the web, contribute original data, and extract new metrics from combinations of data series.

Policy Digest

The Geography of Firm Dynamics: Measuring Business Demography for Regional Development

New businesses are not only vital for the creation of employment but also for the development of new ideas that simplify work and production processes and increase productivity. Consequently, business dynamics contribute to regional development and prosperity. Yet, the local reality across the OECD presents a picture of large regional disparities which needs to be understood. While some regions experience a high degree of business births and deaths, other regions only observe low levels of changes in their business population.

Filling the Business Demography Data Gap
So far, the lack of a consistent and comprehensive database for OECD regions has been a major impediment for assessing differences in entrepreneurship across places. This report contributes to fill that void. It enables policy makers to compare business demography between different OECD regions and also highlights various place-specific factors that are more successful in stimulating the creation and development of businesses. Regions showing higher levels of entrepreneurship have on average better local governance, spend more on R&D activities, and have a more educated local workforce. Similarly, regions have on average higher firm creation when they have business-friendly regulations (ease of doing business) and a higher quality of governance (i.e. low levels of corruption). Financing constraints of firms appear to be related to higher rates of business deaths and lower rates of new business creation, while additional resources via EU Cohesion Funds can increase both the births and deaths of businesses.

Key Findings

  • New firms constitute, on average, 10% of all firms across OECD regions, demonstrating that business dynamics in the form of firm births are considerable in the OECD. However, both within as well as across countries, regions differ considerably in business dynamics. At the top end of the range, business birth rates can reach up to 25%, whereas regions with the lowest business creation rates only recorded birth rates of around 5%. These dynamics are partially driven by non-employer firms for which birth rates are larger than for employer firms (on average 9%).
  • Urban regions show the largest levels of business dynamics, both in terms of business creation and destruction rates, which is particularly pronounced for mostly urban regions at the frontier of national productivity. They account for 24% more business births, among all types of firms, than would be expected given their share of active firms.
  • Using enterprise-level data to monitor employment growth from business creation can be susceptible to a headquarter bias, a deviation from a region’s actual share of national employment of, on average, 1.4 percentage points. Capital-city regions tend to concentrate headquarters of large firms. On average they control 7 percentage points more employment than is located in their region.
  • New firms and small and medium enterprises (SMEs) contribute significantly to regional employment growth and can be stimulated by the right set of regional conditions pertaining to local governance, financing availability and education. Based on data on employer enterprises, new businesses can create up to 8% new employment in regions, though regions across the OECD differ substantially in this regard. Similarly, in a subset of four countries, regional employment growth in small and medium-sized plants between 2010 and 2014 ranged from 30% to a loss of 27%. Regions with on average smaller existing firms also record higher firm birth rates. For those reasons, tailored policies that facilitate and encourage entrepreneurship can boost regional development and employment.
  • Ad hoc analysis on micro-data is a possible alternative way to build comparable and robust evidence on the dynamics of businesses and related employment. By means of consistently performed micro-aggregation of business registers data in the context of Costa Rica, Finland, France and Sweden, young plants are shown to disproportionately contribute to regional net creation and employment growth. After controlling for firm-level characteristics, population density appears to significantly enhance both entrepreneurial activities and post-entry employment growth.

The Way Forward
One main lesson emerging from this report is that robust and internationally comparable regional business demography indicators require further harmonization efforts across countries on the capacity to distinguish employer-only enterprises from those of non-employer ones and to enhance the capacity to track enterprises and their establishments in order to better assess the geographical dimension of employment creation.


WICK2017: 5th PhD Workshop Economics of Innovation, Complexity and Knowledge

Turin, Italy, 19-20 December, 2017
The aim of the workshop is to bring together young researchers from different disciplines and provide them a circumstance of discussion of both full and early works. The main topics the workshop will cover are Economics of Science, Firm and Regional Innovation Strategies, HR Analytics and Economic Philosophy. The event will feature keynote contributions from Dr. Frank Neffke and Dr. Torsten Heinrich.

GeoInno2018: 4th Geography of Innovation Conference

Barcelona, Spain, January 31st, 2017 – February 2, 2018
The aim of this event is to bring together some of the world’s leading thinkers from a variety of disciplines ranging from economic geography, innovation economics, and regional science, as well as economics and management science, sociology and network theory, and political and planning sciences.

The 12th Workshop on the Organization, Economics, and Policy of Scientific Research

Bath, UK, 27-28 April, 2018
As in previous years 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. 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 2015 or later).

Triple Helix XVI Manchester

Manchester, UK, 5-8 September, 2018
Across the world, states and city regions are facing huge societal, economic, environmental, and political challenges whose solutions require concerted new efforts and innovative partnerships. The 2018 International Triple Helix Conference brings together academia, government, business, and community to share effective practices and to advance the frontiers of knowledge about collaboration for economic progress, social development and sustainability, and the role of cities and regions as enabling spaces for these interactions.

A World of Flows – Labour Mobility, Capital, and Knowledge in an Age of Global Reversal and Revival

Lugano, Switzerland, 3-6 June, 2018
The 2018 RSA Annual Conference aims to address processes of global reversal and regional revival, in a world dominated by flows of capital, labor, and knowledge. Further it seeks to understand the political, economic and social factors that initiate change and how these changes are finding new expressions as the world’s political and economic system continues to struggle with low rates of global economic growth, the rise of China as an economic super power, the on-going impacts of recession and austerity, and increasing levels of inequality. To study and debate these and many other questions, we warmly invite the regional studies/science and connected communities to join us.

Subscriptions & Comments

Please forward this newsletter to anyone you think will find it of value. We look forward to collaborating with you on this initiative. If you would like to comment on, or contribute to, the content, subscribe or unsubscribe, please contact us at

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