The IPL newsletter: Volume 20, Issue 414

News from the IPL


Interview conducted by Travis Southin and Zissis Hadjis. November 12, 2019

As a tenure track faculty member at OCAD University in Strategic Foresight and Innovation, Michele Mastroeni’s research agenda explores innovation systems, innovation policy, and the application of design principles and evidence-based solutions.

In a sentence or two, describe your area of research. Why is it important and interesting to you? Why did you decide to pursue it?
One area I’m pursuing right now is the application of smart specialization principles to rural regions in Canada. The reason I’m doing this is because the literature, federal government, and provincial government often focus on innovation in cities. However, a large portion of Canada’s economy still stems from primary or traditional manufacturing industries, which are not necessarily in urban centres. The rural areas still need the same boost in productivity as the cities. Another area I’m looking into is practitioner-led innovation, which is about about solution-finding and real-time changes from practitioners in the field. I’m interested in how we can capture the knowledge and very useful solutions generated from practitioners on the ground in a more formalized way.

Are there any updates from your work or current projects that you can share?
I just received a SSHRC Insight Development grant to pursue the research on smart specialization in non-metropolitan regions in Canada, in collaboration with researchers from Brandon University in Manitoba and Selkirk College in British Columbia. We’re hoping to move beyond data gathering, and trying to create a framework for strategy building that local practitioners can implement.

What impact do you hope your research can have?
My hope is that the research will have an immediate and useful impact for organizations that are doing this type of work, such as governments who are implementing public policy in rural areas or other types of institutions.

What are the biggest opportunities and challenges facing your area of research?
One challenge, which is also an opportunity, is that evidence-based policy making is actually being questioned by the current political climate through the distrust of research-based knowledge. I think that main challenge is creating a space for dialogue where the different stakeholders, especially ones that will be affected by the research, are at the table. This would hopefully build trust amongst stakeholders, and create an opportunity for greater understanding of the different viewpoints they hold.

What do you think the innovation landscape will look like in 5 or 10 years?
Ethics will start taking centre stage in the innovation discourse, as opposed to the actual technology. I think it’s going to become impossible to ignore ethical questions, and value-based decision making will continue to take a greater role in innovation.

What was the best book (or article) you’ve read recently? Why?
While it may be technologically outdated, I think people should still revisit “Zen and the Art of Motorcycle Maintenance”, published by Robert Pirsig in 1974. I believe the questions that it asks, and attitudes towards learning and technology, are critical for our current innovation climate.

What advice would you give a new graduate student studying innovation?
The first piece of advice is to keep persevering, and to keep searching for questions and answers. I’ve made a space for myself in this area not because I have a brilliant mind, but because I was stubborn and didn’t stop working at it. The second piece of advice is to be aware that there is always the possibility of being brushed off as doing “buzzword” research. I think it’s crucial that, as innovation researchers, we take the time to ask deep questions, do the hard research, take our time, and show people that the research is important.

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

Building Canadian Consensus: Our Maturing Blockchain Ecosystem

Information and Communication Technology Council (ICTC)
This report profiles Canada’s blockchain ecosystem, summarizing the following: the historic context for blockchain; key concepts; use cases; Canada’s blockchain advantage versus other jurisdictions; sector, type and company size data; workforce skills required in blockchain; and trends for a maturing industry. The report relies on over 30 consultations with industry experts, custom ICTC datasets on blockchain companies that hire Canadian employees, and a number of group Advisory Committee meetings. The report finds that Canada’s blockchain ecosystem consists of over 280 companies employing 1600 workers, predominantly in the finance, fintech, and information and communications technology (ICT) sectors. Toronto and Vancouver are the leading centres of the blockchain economy in Canada, responsible for 60% of companies and 65% of total blockchain workers. The industry is no longer characterized by initial coin offerings, with blockchain technology increasingly being employed in supply-chain management, real estate, and healthcare.

Cities, Clusters & Regions

Latent Innovation In Local Economies

Stephan J. Goetz & Yicheol Han, Research Policy

This article proposes a measure of latent innovation in local economies based on spillovers among industries in terms of inter-industry sales and purchases as well as spatial proximity. The proposed measure captures innovation that is not reflected in typical NSF-based statistics such as patents, R&D spending, or science and engineering workers. When the results are mapped for the U.S., regions that one would expect to be highly innovative also show up as such. To determine whether this measure helps to explain economic growth beyond traditional factors such as human capital and agglomeration, and conventional measures of innovation, the authors estimate simple regression models with income and employment growth as dependent variables. The proposed innovation measure is statistically significant even after controlling for rival causes of growth. The authors suggest that the measure is preferable to conventional innovation indicators for understanding where in the U.S. innovation, more broadly defined, is occurring.

Prior Employment As a Causal Mechanism Within Entrepreneurial Ecosystems

Kevin Walsh, Regional Studies
The entrepreneurial ecosystems literature lists numerous factors, emphasizing their interactions. However, there is limited empirical literature exploring the causal mechanisms, nor an understanding of the relative importance of these factors. This paper places the entrepreneur at the centre of the analysis by constructing a career history network of over 2100 Irish high-tech entrepreneurs. It finds that prior employment experience can be used to measure the prominence of different actors anticipated in the entrepreneurial ecosystem literature. Regional universities play an anchor role within each regional entrepreneurial ecosystem. Universities are indirectly connected to other organizations to form an integrated network that supports high-tech entrepreneurship. This approach may be used to assess and motivate interventions to support integration and anchor organization establishment that enhances regional entrepreneurial activity.

Innovation Policy

Embracing Change: Industry 4.0 and Canada’s Digital Future in Manufacturing

Canadian Manufacturers & Exporters
This report by the Canadian Manufacturers and Exporters association reports on industry 4.0 technology adoption in Canada’s advanced manufacturing sector. The report notes that Canada lags other industrialized countries when it come to digitization and the adoption of advanced manufacturing technologies. Canada ranks as one of the lowest in the OECD over the last five years in capital spending on machinery, equipment and intellectual property products, declining 21 per cent from 2005 to 2017.  The report offers policy recommendations to address three main obstacles to higher investment and productivity: a lack of information and testing opportunities, high purchase costs and uncertain ROI, and labour and skills shortages.

Scoping the OECD AI principles: Deliberations of the Expert Group on Artificial Intelligence at the OECD (AIGO)

This OECD Digital Economy Paper presents the work conducted by the Expert Group on Artificial Intelligence at the OECD (AIGO) to scope principles to foster trust in and adoption of AI. In particular, this paper presents a common understanding of what is an AI system as well as a framework that details the stages of the AI system lifecycle. This work informed the draft Recommendation of the Council on Artificial Intelligence, which was adopted at the Ministerial level by the OECD Council on 22 May 2019.

Statistics & Indicators

2019 State of SaaS: The Canadian SaaS Landscape

Ottawa-based accelerator L-Spark has released the results of its annual report on the state of Canadian SaaS, which tracks investment in the Canada’s software as a service (SaaS) sector. The report found that Canadian SaaS companies received $5.13 billion in capital investments in 2019, a 213 percent ($3.51 billion) increase over the previous year. The report tracked 183 companies involved in 206 deals with 298 investors. The average deal size was $43 million, up from $10.3 million in 2018. The report also reported on the year’s 45 exits.

State Government R&D Expenditures Increased 3% in FY 2018; Energy-Related R&D Up 29%

Christopher Pece, National Science Foundation National Center for Science and Engineering Statistics (NCSES)
This InfoBrief presents summary statistics from the FY 2018 Survey of State Government Research and Development, sponsored by the National Center for Science and Engineering Statistics (NCSES) within the National Science Foundation. State government agency expenditures for research and development totaled $2.5 billion in FY 2018, an increase of 3% from FY 2017. Health-related R&D expenditures were $1.1 billion, continuing to constitute the largest share (44%) of all state government agencies’ R&D. Energy-related R&D expenditures increased 29% between FY 2017 and FY 2018, reaching $397 million. Amounts reported do not include direct appropriations from state legislatures to universities, colleges, and private organizations.

Higher Education R&D Expenditures By State and Source of Funds

Jason Rittenberg, SSTI
This article features data visualizations on R&D funding at U.S. institutions of higher education by state and source of funds. The data is drawn from a survey conducted by the NSF’s National Center for Science and Engineering Statistics. In 2018, higher education institutions drew 53 percent of R&D funding from the federal government, 26 percent from the institutions themselves, 7 percent form nonprofit organizations, 6 percent from industry, and 5 percent from state and local government. The article includes customizable data visualizations that break out the sources of funding on a state-by-state level.

Policy Digest

The case for growth centers: How to spread tech innovation across America

Robert D. Atkinson, Mark Muro, & Jacob Whiton, Brookings Institution & ITIF
This report is a result of a research collaboration between researchers at the metropolitan policy program at the Brookings Institution and the Information Technology and Innovation Foundation (ITIF). 

The report addresses the growing phenomenon of regional disparity in economic growth driven by the winner-take-most dynamics of the innovation economy.  The growing gap between “superstar metro areas” and the “left-behind places” represents a serious productivity, competitiveness, and equity problem. The authors assert that “the time has come for the nation to offset the pull-away of the innovation superstars with a concerted intervention to support the emergence of new tech stars in new places.” To facilitate this effort the report makes the following conclusions and recommendations in laying out the components of a federal innovation-based growth centers program:

1) Regional divergence has reached extreme levels in the U.S. innovation sector.
The innovation sector—comprised of 13 of the nation’s highest-tech, highest-R&D “advanced” industries— has been concentrating in a short list of superstar metropolitan areas. Most notably, just five top innovation metro areas—Boston,San Francisco, San Jose, Seattle, and SanDiego—accounted for more than 90% of the nation’s innovation-sector growth during the years 2005 to 2017.  These five regions have increased their share of the nation’s total innovation employment from 17.6% to 22.8% since 2005. In contrast, the bottom 90% of metro areas (343 of them) lost share.

2) Such high levels of territorial polarization are now a grave national problem.
The authors illustrate how this concentration of high tech industries in select regions are creating considerable negative externalities, ranging from spiraling home prices, traffic gridlock, and regional imbalances of college-educated workers.  As a result, the authors are concerned that “whole portions of the nation may now be falling into ‘traps’ of underdevelopment.” This results in a “stark gap between the productivity of the relatively few metropolitan areas with high shares of innovation industries and the many more with less.” The authors also raise concerns this this regional divergence yields ethical concerns related to social equity and political risks of increasing instability.

3) Markets alone won’t solve the problem; place-based interventions will be essential in ameliorating it. The authors note how the spatial dynamics of economic growth in the digital era call into questions traditional economic assumptions about the economic growth naturally leading to ‘allocative efficiency’, “equilibrium,” and “welfare-maximizing” spatial results. Instead, the authors stress the current patterns of growth are dominated by “agglomeration” effects, by which large benefits accrue to firms when they locate together in urban areas. The authors emphasize that “substantial evidence now suggests that agglomeration brings with it strong self-reinforcing tendencies that not only do not support the “spread” of development, but are likely to exacerbate its concentration.” In terms of appropriate policy responses, the authors assert that state-level resource limitations limit the potential of “bottom-up” technology-based economic development efforts cannot significantly change these patterns. Instead, the authors favour national approaches that also address place-based concerns.

4) The nation should counter regional divergence by designating eight to 10 new regional “growth centers” across the heartland.
The authors advocate for an updated version of the “growth pole” strategy from the 1960s and 1970s that placed emphasis in regional economic planning on focusing transformative investment on a limited number of locations to catalyze both regional and national economic growth. This strategy calls for an approximate investment of $100 billion over 10 years via federal innovation inputs. In addition to a direct R&D funding surge worth up to $700 million a year in each metro area for 10 years, the authors call for increased investments in workforce development funding, tax and regulatory benefits, business financing, economic inclusion, federal land and infrastructure supports, and placemaking initiatives aimed at building innovation districts. To administer this funding, the report calls for the establishment of a “competitive, fair, and rigorous process for selecting the most promising potential growth centers” via “a rigorous competition characterized by an RFP-driven challenge, goal-driven criteria, and an independent selection process.”

5) Numerous metropolitan areas in most regions have the potential to become one of America’s next dynamic innovation centers.
The report then demonstrates promising ranking metrics to identify 35 potentially transformative metro areas as candidates for growth center designation. The candidates are situated in at least 19 states and represent a variety of non-coastal regions. The authors generated these candidates by benchmarking America’s 382 metropolitan areas by population, university STEM R&D per capita, patents per 100,000, BA share, STEM doctoral degrees per 100,000, innovation sector job share, and eligibility index.


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.

Rethinking Clusters: Place-Based Initiatives for Inclusive, Innovative and Reflective Societies – 3rd International Workshop on Cluster Research

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.