The IPL newsletter: Volume 19, Issue 395

Editor's Pick

Vectors of Digital Transformation

This report examines key properties – or “vectors” – of the digital transformation that fundamentally affect the economy and society and accordingly the design and efficacy of public policies. It explores three main areas where digital transformation affects the ways the economy and society are operating, i.e.: a) scale, scope and speed; b) ownership, assets and economic value; and c) relationships, markets and ecosystems. Exposing the underlying nature of change, the seven vectors provide insights on how the transformation challenges policies that are frequently predicated on an analogue world of tangible products and assets, fixed geographic boundaries and physical locations, on transaction costs that limit the scale and scope of interactions and offerings, and on supply and demand conditions that reflect scarcity. The objective of this report is to support the review of existing and the design of new policies to ensure that they are well‑suited to the digital era.

Innovation Policy

Who are Canada’s Tech Workers?

Viet Vu, Creig Lamb, and Asher Zafar, Brookfield Institute
This report closely examines tech workers across Canada and seeks to shed light on Canada’s tech occupations and the diversity and equity within them. Adding almost 200,000 new jobs since 2016, Canada’s highly-skilled tech workers are becoming a major component of Canada’s workforce. Using brand new methodologies and powerful data visualizations, Who are Canada’s Tech Workers? looks to provide a clear and concise resource for anyone looking to learn more about Canada’s tech talent and its growing impact on the economy.

Five Bold Ideas from New Governors on Economic Innovation and Inclusion

John D. Ratliff and Nathan Arnosti, Brookings
Voters across the country elected hundreds of new state officials last November, including 20 new governors. With these new governors now sworn into office, the early public actions of many indicate that issues of economic innovation and inclusion will be key policy priorities in their first terms. On economic innovation, digital technologies are changing the skills workers use each day, upending industries, and reshaping the ways that we communicate, travel, learn, and live. Accordingly, forward-looking governors have unveiled plans to transform state government operations using data and technology and to equip residents with the digital skills they need.

Innovation and Productivity: Towards a Research and Policy Agenda

Robert Huggins, Productivity Insights Network
In recent years, significant progress has been made to examine and substantiate the link between innovation and productivity at a number of levels and within a range of contexts and environments. However, there remain some core outstanding questions relating to our understanding of the factors within a firm’s environment that encourage or discourage innovative activity, as well as the extent to which aggregate productivity is influenced by the innovative activities of individual firms (Hall, 2011; Atkinson, 2013). These knowledge gaps hint at issues relating to context, and the institutional and cultural frameworks within which innovation is promoted and executed. The aim of this paper, therefore, is to give some further consideration to these gaps by cutting into the innovation-productivity debate at a number of key theoretical levels in order to tease out elements for future research and policy agendas. It broadly focuses on theoretical and policy areas concerning the (inter-) organizational and spatial environment and context within which innovation occurs, with a particular emphasis on emerging institutional and behavioural theories of innovation and productivity. Also, whilst acknowledging the role of the firm as the primary unit for observing and examining innovation, the paper suggests that future research and policy should give further consideration to the role of particular human agents as key units for observing innovation-productivity processes.

Cities, Clusters & Regions

Real Journey Time, Real City Size, and the Disappearing Productivity Puzzle

Tom Forth, Productivity Insights Network
A project led by the Open Data Institute in Leeds makes the case that we are mismeasuring the effective size of cities and hence mismeasuring productivity at the local level. Beginning from the observation that larger cities tend to be more productive everywhere except the UK this post asks: is it possible that poor public transport in the UK’s large cities makes their effective size smaller, and thus sacrifices the agglomeration benefits we would expect from their population? The report unpacks this question ODI analyzes real travel time data for Birmingham’s bus network. Their hypothesis is that by relying on buses that get caught in congestion at peak times for public transport, Birmingham sacrifices significant size and thus agglomeration benefits to cities like Lyon, which rely on trams and metros. This is based on calculations that a whole-city tramway system for Birmingham would deliver an effective size roughly equal to the OECD-defined population.

Automation and Artificial Intelligence: How Machines are Affecting People and Places

Mark Muro, Robert Maxim, and Jacob Whiton, Brookings
At first, technologists issued dystopian alarms about the power of automation and artificial intelligence (AI) to destroy jobs. Then came a correction, with a wave of reassurances. Now, the discourse appears to be arriving at a more complicated understanding, suggesting that automation will bring neither apocalypse nor utopia, but instead both benefits and stress alike. Such is the ambiguous and sometimes disembodied nature of the “future of work” discussion. Hence the analysis presented here. Intended to bring often-inscrutable trends down to earth, the following report develops both backward and forward-looking analyses of the impacts of automation over the years 1980 to 2016 and 2016 to 2030 to assess past and upcoming trends as they affect both people and communities in the United States. The report focuses on areas of potential occupational change rather than net employment losses or gains. Special attention is applied to digging beneath national top-line statistics to explore industry, geographical, and demographic variations. Finally, the report concludes by suggesting a comprehensive response framework for national and state-local policymakers.

Advancing Equitable Innovation in Houston: Local Strategies to Support Urban Manufacturing and Inclusive Growth

Urban Manufacturing Alliance
Manufacturing is thriving in Houston. From energy-related manufacturing to small-scale production and making, Houston’s manufacturers are harnessing the city’s innovation, technology, and educational resources to develop new products and businesses. Manufacturing also creates critical opportunities for inclusive economic growth. Houston’s manufacturing sector provides accessible career pathways for job seekers and entrepreneurs from diverse backgrounds. Further, small, urban manufacturers (SUMs) can bring much-needed economic activity and jobs to communities. However, SUMs face unique growth challenges, including lack of affordable production space, business development incentives, and workforce development support. These issues will require creative, multi-stakeholder solutions. In 2018, TXRX Labs and other local organizations convened the Equitable Innovation Conference to discuss potential solutions, and this white paper is a result of those discussions. It provides insight into local challenges and opportunities for SUMs and offers potential strategies – illustrated through local assets to build upon and national best practices to learn from – to grow Houston’s urban manufacturing sector.

Statistics and Indicators

Useful Stats: VC Investments Nearly Triple in Past Six Years

SSTI Weekly Digest
Over the six-year period from 2013 to 2018, as total venture capital investments nearly tripled, growing from $47.5 billion in 2013 to nearly $131 billion in 2014, the number of deals increased by just 13.5 percent according to new data from the NVCA-PitchBook Venture Capital Monitor. The $131 billion in total VC investments in 2018 is the largest amount since PitchBook began tracking the data in 2006 and the first year since the height of the dot-com boom that annual capital investment eclipsed $100 billion. Last week, SSTI wrote how the VC industry was shaped by concentration including both geographic concentration and increases in mega-rounds/funds in 2018.

Concentration Shaped 2018 VC Industry; Record Number of Unicorns

Robert Ksiazkiewicz, SSTI Weekly Digest
Based upon the finding of two reports – the 4Q Pitchbook-NVCA Venture Monitor and the MoneyTree Report –   SSTI identified three significant trends that impact the startup capital community: geographic concentration, mega-rounds/funds, and strong VC-backed exit activity. Approximately $130.9 billion was invested across nearly 9,000 deals in 2018 by the venture capital (VC) industry, according to the 4Q PitchBook-NVCA Venture Monitor. This marks the first year since the height of the dot-com boom that annual capital investment eclipsed $100 billion. The report indicates a decline in the number of seed-stage deals made during the year, although PitchBook will continue to add deal data as it becomes public, which may ultimately change the direction of this trend (as happened in 2017). Reporting on seed-stage investments as a share of all deals, the MoneyTree Report from PricewaterhouseCoopers and CB Insights finds a third consecutive year of decline, to just 25 percent in 2018. The year did see more large, later-stage, mega-rounds including a record number of 54 VC-backed U.S. companies obtaining $1 billion valuation — a record for the number of new unicorns.

Policy Digest

A Digital Strategy for Canada: The Current Challenge

David A. Wolfe, IRPP
Canada’s future competitiveness and growth prospects are inextricably linked to our ability to seize the opportunities created by the rapidly evolving digital economy. Ottawa’s innovation agenda should be extended to pursue a broader digital policy strategy focused on three main goals: (1) promoting the rapid adoption and diffusion of digital technologies across all sectors of the economy; (2) assisting companies that have demonstrated commercial potential to grow to a global scale; and (3) promoting the creation of businesses capable of developing disruptive technologies. Ultimately, given the pace of change and the complexity of the challenges involved, the most effective way for governments to respond is through continuous innovation in their policy and regulatory frameworks.

Canadian challenges and the role of policy

Research for the CDO program has shown, however, that Canadian business has been slow to recognize the extent to which software advances are transforming traditional industries. As a result, many Canadian firms are underinvesting in software and lagging in the introduction of corresponding digital processes and techniques to access markets. Moreover, critical sectors of the economy have been slow to adapt to the challenge posed by dynamic platform firms, and are struggling to respond to the ensuing disruption.

These problems are compounded by other obstacles that hamper Canada’s ability to take full advantage of the digital revolution.

  • Canada’s record in building local successes into global powerhouses is decidedly mixed. Promising startups all too often end up either moving to the United States or sold to foreign (usually US) investors. Without high-growth companies of global scale, Canada will lack the training ground for managers with the skills needed to shepherd startups into successful scale-ups.
  • One of the biggest challenges to the growth of digital firms is the shortage of Canadian-based patient capital for high-growth companies. Promoters of digital technologies emphasize their ventures’ strong growth prospects, but the reality is that high growth usually implies greater risk, which is a deterrent to traditional sources of investment in Canadian capital markets.
  • A related issue is the relative size of Canada’s domestic market. Companies must export at an early stage as a base for global success. The shortage of patient capital and the lack of key experienced managers with the skills required to scale a domestic company into global markets make it difficult to transform startups into high-growth firms.
  • Competing successfully in the global economy increasingly depends on the ability to use intellectual property and propriety standards as part of a competitive strategy to create what is called “room to operate.” Canadian innovation strategies need to pay greater attention to these critical elements of success in the digital economy.
  • Canada has a loose innovation system. The National Research Council’s Industrial Research Assistance Program (IRAP), the Scientific Research and Experimental Development Tax Incentive Program and other programs provide some support for research and development (R&D) initiatives in advanced technologies and software. However, the system lacks a coherent and strategic focus, and key players, including businesses, research and training institutions, industry associations and government, are not coordinated.[8]
  • Despite a significant concentration of digital firms in particular cities and regions, much more could be done to further develop these emerging clusters or regional innovation ecosystems and generate greater benefits.

Software and data thus are the key to Canada’s success in the digital economy. The overarching challenge, however, is to recognize that a small, open trading economy such as Canada’s must focus on specific sectors and niches where Canadian firms and industries have the potential to compete in global markets. The reality is that, although Canadian entrepreneurs have developed exciting ideas and started innovative businesses, they lack the focused support they need from government to expand these ventures on a global scale.

Canada’s ability to position itself as a leader in the ever-changing and expanding digital economy will depend on how effectively governments and policy-makers support Canadian firms in navigating these fast-developing challenges. The strategy must have three main goals:

  • to promote the rapid adoption and diffusion of digital technologies across all sectors of the economy;
  • to assist companies that have demonstrated their commercial potential to grow to a scale that helps them succeed in the global marketplace; and
  • to support the emergence and growth of firms that could bring new, disruptive products and services to global markets.


Changing the Tone of the Debate: Productivity Insights Network Conference 2019

Sheffield, England, 13 March, 2019
Raising productivity is a central economic challenge in the UK. The Productivity Insights Network (PIN) conference will bring together researchers, policymakers, intermediaries and businesses working to identify, advance and implement new insights to address the productivity puzzle in the UK. Join us for an engaging day of talks and panel discussions.

Workshop Series on Migration, Globalization and the Knowledge Economy

Utrecht, Netherlands, 16-17 May, 2019
The workshop will consist of a 2-day plenary session with presentations and discussions, and two keynote speakers. The keynote speakers of the Utrecht workshop will be Ina Ganguli, from University of Massachusetts, and Ufuk Akcigit, from the University of Chicago. We aim to attract both senior and junior scholars dealing with research topics such as the role of high-skilled migration in fostering innovation in receiving countries, the relationship between diversity and innovation, the role of skilled diasporas and return migrants in diffusing knowledge back to their home countries, the emerging role of MNC in shaping scientists’ and engineers’ migration flows as well as temporary migration and knowledge sharing, migration and innovation-based start-ups formation, regions and mobility, and so forth.


Bordeaux, France, 20-21 May, 2019
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 2016 or later). Up to 18 papers will be selected from open submissions on the basis of peer review. Contributions are invited on (but not limited to) one or more of the following topics:

  • The evaluation of science policy
  • Organising research activities in universities, PROs and private R&D labs
  • Spillovers from scientific research
  • Role of gender and family in scientific research
  • Science research networks and collaboration
  • Scientific careers and mobility

Deadline for the submission of papers or extended abstracts (min 3 pages) is January 31st 2019. Submissions should be previously unpublished works. All submissions are reviewed with respect to novelty, academic quality and relevance.

CFP: 2019 University-Industry Interaction Conference

Helsinki, Finland, 18-20 June, 2019
This key event for university leaders, practitioners from both business and university, policymakers and educators attracts more than 500 participants from over 60 countries to interact, share knowledge and establish new relationships. During this three-day event, you will encounter presentations from over 100 organisations, tour innovation spaces, have access to a wide variety of workshops and participate in numerous networking opportunities to gain new insights into the bigger picture of university-industry interaction.


Copenhagen, Denmark, 19-21 June, 2019
Since 1996, DRUID has become one of the world’s premier academic conferences on innovation and the dynamics of structural, institutional and geographic change. DRUID is proud to invite senior and junior scholars to participate and contribute with a paper to DRUID19, hosted by Copenhagen Business School. Presenting distinguished plenary speakers, a range of parallel paper sessions, and an attractive social program, the conference aims at mapping theoretical, empirical and methodological advances, contributing novel insights, and help identifying scholarly positions, divisions, and common grounds in current scientific controversies within the field. Keynotes delivered by top scholars from innovation studies, management, economic geography, and numerous other research fields. Plenary speakers at DRUID19 include Stefano Brusoni, Dimo Dimov, Nijanlana Dutt, Annabel Gawer, Martine Haas, Adam B. Jaffe, Michael G. Jacobides, Sarah Kaplan and Dan Levinthal.

The 2019 Technology Transfer Society Annual Conference

Toronto, 26-28 September, 2019
The Munk School of Global Affairs and Public Policy and the Technology Transfer Society would like to invite you to submit a paper* to the 2019 Technology Transfer Conference. The main themes of the Conference will revolve around technology transfer and innovation policy, technology commercialization and entrepreneurship (with a focus on universities), and inclusive innovation. Submissions featuring longitudinal and historical studies, ideally using mixed-methods research are particularly encouraged. Submissions based on other methods are also welcome. For more information on how to submit an abstract, visit the Call for Papers page.

Atlanta Conference on Science and Innovation Policy

Atlanta, GA, 14-17 October, 2019
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.

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