News from the IPL
INTERVIEW
Interview performed by Travis Southin and Zissis Hadjis, November 7, 2019
Dr. Peter J. Warrian is a Distinguished Research Fellow at the Munk School of Global Affairs & Public Policy, University of Toronto. He is Canada’s leading academic expert on the steel industry. He was formerly Research Director of the United Steelworkers of America and Chief Economist of the Province of Ontario. His current research is on knowledge networks, supply chains and digital manufacturing.
Are there any updates from your work or current projects that you can share?
I’m currently working on two main projects at the moment. The first project is a book contract with the National Museum of Science and Technology studying the history of Canadian metallurgy and its contribution to the economy, which is slated to be published in June, 2020. The second project has to do with my position as an economic advisor to the Vatican. The Vatican, in conjunction with the International Labour Organization, has undertaken a joint project on AI, Robotics and the Future of Work. I have been leading this project, and focusing on three main case studies – namely in the automotive sector, the mining sector, and the service sector as it relates to the platform economy. The report is scheduled to be submitted to the Vatican in the Spring of 2020.
What impact do you hope your research can have?
I hope that the research can have a policy impact on linking metallurgy and manufacturing, with the ultimate goal of influencing the industry as a point of discussion.
What are the biggest opportunities and challenges facing your area of research?
With my current projects, the challenge is that the research is pretty edgy. Due to the depth and complexity of this type of qualitative research, it takes a lot of time and effort to find the right partners.
What do you think the innovation landscape will look like in 5 or 10 years?
The innovation landscape in basic industries, like steel and mining, will be fundamentally changed. Historically, the large steel and mining companies drove the the innovation agenda for the industry. Today, equipment and technology suppliers are the gatekeepers for innovation. The radical change could be that external groups in the supply chain, such as those that provide professional services, may become the drivers of innovation and change the boundaries for industrial corporations as a whole.
What was the best book (or article) you’ve read recently? Why?
It’s an older book, about 30 years old, titled “R&D for Industry: A Century of Technical Innovation at Alcoa” by Margaret Graham. However, it has a fundamentally different perspective about R&D. Her main argument is that in certain environments, R&D actually creates the value of the corporation. She also generalizes that innovation in process-based industry can be both high risk and high cost. The second book is titled, “Army of None: Autonomous Weapons and the Future of War” by Paul Scharre. The author discusses AI and autonomous weapons, which is the ultimate sociopolitical implication of this technology.
What advice would you give a new graduate student studying innovation?
I think mentorship is really important. Many of us have network connections that we don’t leverage very well, and I think it’s important that we tap into those networks and make them more accessible for the next generation of researchers. Secondly, I think researchers could do a better job with proactive synthesis and harvesting the richness of our data. In the ISRN then IPL, we have accumulated about 4000 interviews with firms across virtually all the sectors of the economy. These data could use further analysis to uncover insights regarding how Canadian companies are embedded in the global supply chain, knowledge and technology transfer.
2019-2020 IPL Speaker Series
What does open science entail?
Diana Hicks, Professor, the School of Public Policy, Georgia Institute of Technology
February 20, 2020, 2:00-4:00pm
Room 208N, 1 Devonshire Place, Munk School of Global Affairs & Public Policy
Editor's Pick
Regions in Industrial Transition: Policies for People and Places
OECD
This recent report from the European Commission and the OECD summarizes findings from consultations launched in 2017 to help 12 EU regions and Member States achieve industrial transition in response to rapid changes in the global economy. Teams of OECD and Commission experts worked with the regions and the two Member States on strategies to bolster ‘smart specialization’ assets while also achieving social fairness, economic modernization and climate ambitions. The report offers a toolkit for national and regional action on five main priorities: preparing for the jobs of tomorrow, broadening and diffusing innovation, promoting entrepreneurship and private sector engagement, transitioning towards a climate-neutral economy, and promoting inclusive growth. This report and its recommendations will feed into the preparation of the future 2021-2027 Cohesion Policy programs.
Cities, Clusters & Regions
2019 Scoring Canadian Tech Talent
CBRE
This report from CBRE Research has analyzed 20 Canadian cities to create a scorecard ranking their technology talent bases. Toronto is ranked number one for Canadian tech talent having added 80,100 tech jobs between 2013 and 2018 (54% growth), far outpacing the nation’s other leading tech centers. Smaller cities also have moved up the list, with Victoria (No. 7) climbing three spots and Oshawa (No. 12) rising two spots. Hamilton (No. 9) and Guelph (No. 13) recorded the fastest tech job growth among mid-sized and small tech talent markets. The scorecard uses 13 metrics to measure each market’s depth, vitality and attractiveness to tech employers and potential employees, including availability of talent, quality of labour and gross operating costs. To generate an overall score, each metric has been weighted by relative importance to companies seeking tech talent.
Urban Growth Strategies in Rural Regions: Building The North Wales Growth Deal
David Beel, Martin Jones & Alex Plows, Regional Studies
This paper discusses the creation of a growth deal for North Wales (The North Wales Growth Deal – NWGD). North Wales is primarily a rural region within the UK, without a core-city or large metropolitan centre. The paper examines how this urban dynamic, fostered around a pushing of the agglomerative growth model out of the city-region, is being transferred largely across rural space and place in terms of how growth is envisioned and how policy is implemented. It contributes to regional studies knowledge by raising the importance of the non-metropolitan city-regional alternatives in the context of the (academic and policy) city-regional debate.
Innovation Policy
Start-up subsidies: Does the policy instrument matter?
Hanna Hottenrott & Robert Richstein, Research Policy
New knowledge-intensive firms contribute to innovation, competition, and employment growth, but externalities like knowledge spillovers can prevent entrepreneurs from appropriating the full returns from their investments. In addition, uncertainty and information asymmetry pose challenges for financing. Public policy programs therefore aim to support start-ups. This study evaluates the effects of participation in such programs on the performance of start-ups in high-tech and knowledge-intensive sectors that were founded in Germany between 2005 and 2012. Distinguishing between grants and subsidized loans and after matching recipients and non-recipients based on a broad set of founder and company characteristics, the authors find that both grants and subsidized loans facilitate tangible investment, employment and revenue growth. Grants are, however, better suited to increasing R&D investments than loans are. Combined with grants, subsidized loans facilitate turning research results into marketable products by means of investments in tangible assets. Start-ups that participate in both types of programs outperform grant-only recipients in terms of innovation performance, employment and future revenues. Finally, program participation does not crowd out private venture capital.
Contract For the Web
Web Foundation
Inventor of the internet Tim Berners-Lee has recently released a report as part of a global action plan to save the internet from political manipulation, privacy violations, fake news, and privacy violations. The ‘Contract for the Web’ encourages commitments from governments, companies and individuals to safeguard the internet in efforts to avoid a ‘digital dystopia.’ More than 150 organizations have endorsed the project, including Microsoft, Twitter, Google, Facebook, and the Electronic Frontier Foundation. Governments and companies are called upon to ensure widespread and affordable access and to safeguard privacy and data rights. Citizens are called upon to collaborate in a manner that respects human dignity as well as to be active in fighting to defend the internet.
Statistics & Indicators
Activities of Multinational Enterprises in Canada, 2017
Statistics Canada
This recent report summarizes recent data on the activities of multinational enterprises in Canada. It notes that in MNEs employed 4.36 million Canadians in 2017, amounting to one-third (34.5%) of Canada’s 12.6 million corporate sector workforce. This was split between foreign MNEs (18.2%) and Canadian MNEs (16.3%). Within the full economy, MNEs employed 23.2% of Canadian workers, where foreign MNEs accounted for 12.2% and Canadian MNEs for 11.0%. The report notes that this differs from most OECD economies, where domestically-owned MNEs often account for a larger part of economic activity than foreign MNEs. The OECD estimates that in 2014, using the OECD analytical Activities of Multinational Enterprises database, MNEs on average employed 23% of workers in the total economy, with domestic MNEs at 16% and foreign MNEs at 7%. In addition, a related Statistics Canada data table shows that in 2017 foreign multinationals spent $7.4 billion on intramural R&D expenditures (employing 49,629 R&D personnel), compared to Canadian multinational enterprises’ intramural R&D expenditures of $6 billion (employing 40,838 R&D personnel).
Do low-skilled workers gain from high-tech employment growth? High-technology multipliers, employment and wages in Britain
Neil Lee & Stephen Clarke, Research Policy
Do low-skilled workers benefit from the growth of high-technology industries in their local economy? Policymakers invest considerable resources in attracting and developing innovative, high-tech industries, but there is relatively little evidence on the distribution of the benefits. This paper investigates the labour market impact of high-tech growth on low and mid-skilled workers, using data on UK local labour markets from 2009–2015. It shows that high-tech industries – either STEM-intensive ‘high-tech’ or digital economy – have a positive jobs multiplier, with each 10 new high-tech jobs creating around 7 local non-tradeable service jobs, around 6 of which go to low-skilled workers. Employment rates for mid-skilled workers do not increase, but they benefit from higher wages. Yet while low-skilled workers gain from higher employment rates, the jobs are often poorly paid service work, so average wages fall, particularly when increased housing costs are considered.
Policy Digest
This Impact Brief performs a review of federal programs for research, innovation, and commercialization drawing on analysis of over 25 years of federal government budgets and documents prepared by Innovation, Science and Economic Development Canada (ISED) and its predecessor, Industry Canada. The report notes that despite a proliferation of programs, the federal government has not been successful in reversing Canada’s continued poor performance in innovation and productivity. The report advances five recommendations for the federal government to change the nature of its programming to reverse the decline:
Opportunity 1: Focus on Commercialization
Federal budgets reveal a continued and strong focus on research and development (R&D) while under emphasizing commercialization and the related activities of sales and marketing. The report analogizes this thinking to the myth of the better mousetrap, that a better product is all that is needed for commercial success. The report advocates for ISED to develop more programs aimed at supporting marketing and sales efforts by innovative firms.
Opportunity 2: Establish Strategic Objectives
The report finds that although ISED may have an overarching objective guiding its operations, “none of the documentation that we have reviewed pointed to a clear purpose.” The recommendation is for the government to clearly articulate a specific set of objectives for Canada’s central innovation department and turn this into concrete plans whose success can be measured in relation to those objectives.
Opportunity 3: Focus on Demand Creation
The lack of demand for innovative products is identified as the most acute barrier to developing an innovation economy in Canada. Insufficient domestic demand limits the ability of Canadian companies to gain experience selling at home before learning how to export. The report categorizes over 100 ISED programs using Michael Porter’s four pillars for the assessment of a national business environment: (1) factor (input) conditions; (2) firm structure, strategy, and rivalry; (3) related and supporting industries; and (4) demand conditions. Innovative Solutions Canada (ISC) is identified as the only ISED program attempting to build local demand for innovation. This yields the conclusion that “the lack of demand creation programmes is the most glaring weakness in government programming and one with the greatest potential for positive change and improved results.”
Opportunity 4: Improve Program Design Through Rigorous Research and Evaluation
The report asserts that efforts to identify problems to inform program design are carried out through opinion-based research without a deeper exploration of data on the underlying reasons for the problems identified. Program evaluation is also identified as an area for improvement via more rigorous research during design and setting more realistic targets during implementation.
Opportunity 5: Eliminate Scientific Research and Experimental Development (SR&ED) Tax Credits
The report questions the effectiveness of the SR&ED program, which uses approximately $3 billion in tax incentives to encourage Canadian businesses of all sizes and in all sectors to conduct R&D in Canada. The authors lament that SR&ED filings and surveys by the Canada Revenue Agency, Statistics Canada, and other federal agencies make it very difficult to conduct meaningful net benefit analysis. It is concluded that “in the absence of strong evidence, it is time to seriously evaluate whether Canada actually benefits from the SR&ED program. It is our contention that the time for this program has passed, and that the entire program should be phased out and eventually eliminated.” The recommendation is to free up this $3 billion annual expenditure to focus on demand creation.
Events
Research Workshop on International Dimensions of Academic Entrepreneurship – Call for Abstracts
Brussels, Belgium, 12 December, 2019
This workshop invites contributions on the links between academic entrepreneurship and the internationalization of higher education. Submission of abstracts are welcome until the 15th of November. The three areas of focus include: the emergence of international academic entrepreneurship, synergies between international education/research activities and academic entrepreneurship, and academic entrepreneurship in an international context.
WICK#7 Workshop in Economics of Innovation, Complexity and Knowledge
Turin, Italy, 8-9 January, 2020
The Vilfredo Pareto Doctoral Program in Economics, University of Turin, jointly with BRICK and Collegio Carlo Alberto, are pleased to announce the 7th International PhD Workshop in Economics of Innovation, Complexity and Knowledge, sponsored by the Young Scholars Initiative of the Institute for New Economic Thinking (INET-YSI). The aim of the workshop is to bring together young researchers from different economic areas and provide them with an opportunity to discuss both full and early works. Participants will also receive helpful feedbacks from distinguished faculty members and external scholars. The main topics of the workshop are Economics of Knowledge and Innovation, with a special focus on Firm and Regional Innovation Strategies, Economics of Science, Economics of Networks, Energy and Environmental Economics and their policy implications.
Rethinking Culture and Creativity in the Technological Era
Florence, Italy, 20-21 February, 2020
The conference focuses on the following questions: how the digital revolution may affect the cultural and creative sectors? What are the new challenges for the management of cultural heritage in the technological Era? It is the first event of a pluriannual program organized in collaboration with the University of Florence, the University of Catania and the University of Campania ‘Luigi Vanvitelli’. The purpose of the program is to create a network of scholars in topics related to economics and management of culture and creativity and to contribute to the current debate and emergent issues of the cultural and creative economy.
The Organisation, Economics and Policy of Scientific Research
Munich, Germany, 23–24 April, 2020
The Max Planck Institute for Innovation and Competition, the Technical University of Munich and BRICK-Collegio Carlo Alberto are organising the annual workshop “The Organisation, Economics and Policy of Scientific Research” at the Bavarian Academy of Sciences. Submissions are accepted until 15 January 2020, with particular focus on: Evaluation of science policy; Role of gender and family in scientific research; Organising research activities in universities, PROs and private R&D labs, Spillovers from scientific research, Collaboration and research networks, Scientific careers and mobility, and the Role of ethics, trust and replicability in science.
Policies, Processes and Practices for Performance of Innovation Ecosystems (P4IE)
Ottawa, Ontario, 12-13 May 2020
The Partnership For the Organization of Innovation and New Technologies is organizing the first ever ‘‘Policies, Processes and Practices for Performance of Innovation Ecosystems” (P4IE) international conference on 12-13 May 2020 in Ottawa. Organized around eight highly relevant tracks, the conference offers participants the opportunity to discuss the impact of various technologies, practices, processes and policies, on innovation ecosystems, and the best means by which to design collaborative environments. The goal of the conference is to explore ways to strengthen Canada’s innovation through innovation ecosystems.
Valencia, Spain, 14-15 May, 2020
The Polytechnic University of Valencia and the University of Valencia, in collaboration with the University of Padova and the University of Firenze, organize the 3rd International Workshop on Cluster Research. As in the past editions, the event aims to to bring together some of the world’s leading scholars working on clusters, networks, ecosystems, platforms and regions. The conference gathers scholars from economic geography, innovation studies, regional science, as well as those working on economics and management, sociology or network theory.
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe.