The IPL newsletter: Volume 21, Issue 422

Entrepreneurs and Cluster Evolution: The Transformation of Toronto’s ICT Cluster

Steven Denney, Travis Southin & David Wolfe
This paper is co-authored by IPL Postdoctoral Research Fellow Steven Denney, Ph.D. Candidate Travis Southin, and IPL Co-Director David Wolfe. Interest in ICT clusters has long been sustained by the power of emerging technologies to reinvent regional or local economies. Prior research has identified the structural conditions under which clusters form, decline, or evolve, but much less is known about the agents responsible for cluster change. This article examines the evolution of the Toronto ICT cluster from a home base for multinational firms in hardware and telecommunications into a more dynamic ecosystem for service-based domestic start-ups and emerging scale-ups. It contributes to the literature on clusters by showing how entrepreneurs have driven cluster evolution in Toronto.

Understanding Innovation Policymakers in the Philippines

NESTA
This report presents a country analysis of the Philippines as part of the NESTA-led Global Innovation Policy Accelerator program. This report aims “to strengthen our understanding of innovation policymakers around the world…by looking at the challenges, opportunities and support for innovation policymakers in each country.” These country-profiles are informed by direct conversations with innovation policymakers working within these systems.

Competition in the Digital Age: The Competition Bureau’s Strategic Vision for 2020-2024

Competition Bureau Canada
This report outlines the Competition Bureau’s strategic vision for 2020-2024. Commissioner of Competition Mathew Boswell notes that “for Canadian consumers and businesses to thrive in the digital economy, the Bureau needs to continually seize opportunities to encourage competition and innovation in areas that matter to Canadians.” The report outlines the three supporting pillars of the organization’s strategic vision: “protecting Canadians through enforcement, promoting competition in Canada, and investing in our organization.”

The Case for a National Industrial Strategy to Counter China’s Technological Rise

Robert Atkinson, ITIF
This report notes that “further stimulus in response to the COVID-19 crisis should focus not just on short-term recovery, but also the long-term competitiveness of key technologically sophisticated, traded-sector industries.” The author asserts that the rise of China as a technological competitor requires the United States to devise “a national strategy that fortifies traded-sector tech industries that are “too critical to fail,” such as advanced machinery, aerospace, biopharma, electrical equipment, semiconductors and computing, software, transportation and more. To develop and implement a national industrial strategy, the federal government will need to “significantly strengthen its institutional capabilities to conduct thorough sectoral analysis.” Congress is called on to act in four areas: “support for R&D targeted to key technologies, tax incentives for key building blocks of advanced production, financing for domestic production scaleup, and adding a competitiveness screen for regulation.”

Global China: Technology

Brookings Institute
This installment of papers for the Brookings Foreign Policy project “Global China: Assessing China’s Growing Role in the World” assesses China’s growing technological reach in the world by focusing on both thematic and technology-specific topics. Thematically, the papers explore the broad dynamics of U.S.-China technology competition, the relationship between the regulation of large U.S. technology firms and strategic competition with China, technology transfer and alliance management, and China’s role in the global competition for technology talent. The following are excerpts from this executive summary of all the articles.

Preparing the United States for the superpower marathon with China

Michael Brown, Eric Chewning, and Pavneet Singh argue that the United States is in a technology and innovation “superpower marathon” with China. They advocate a strategy of larger  investments in  research and development (R&D) including a focus on engineering talent, an integrated U.S. economic strategy across government, and longer-term focus for U.S. businesses and capital markets.

Digital competition with China starts with competition at home

Tom Wheeler argues that, if the United States is to “outinnovate” China, it must embrace competition-driven innovation and “reorient our industrial age thinking to embrace policies that take advantage of the nonrivalrous nature of data.” Wheeler argues that legislators should vigorously protect consumers and competition, and to define the challenges posed by AI less in terms of “implementation,” where China has an advantage, but instead through the lens of innovation, where he argues the U.S. retains the advantage.”

“AI weapons” in China’s military innovation

Elsa B. Kania focuses on Chinese advancements in “intelligent” and autonomous weapons systems.  Kania notes that China’s progress faces hurdles related to testing, training, and application in real world scenarios. She asserts that the United States must closely monitor Chinese advancements in this area, exercise caution when disclosing new U.S. capabilities, and engage in dialogue with allies and partners as well as Chinese military counterparts to reduce the risk of unintended escalation.”

Navigating the US-China 5G competition

Nicol Turner Lee summarizes the different approaches taken by the U.S. and China in the intensifying competition to deploy 5G wireless networks. Turner Lee raises the possibility of a “split digital ecosystem worldwide” spurred by China’s Belt and Road Initiative, and the potential for China to “lock in” other nations with its 5G technology. She recommends that the United States pursue more flexible and timely spectrum policies, scalable alternatives for 5G equipment, and a long-term plan — including of increased R&D spending — to develop future platforms enabled by advanced mobile networks.

China’s digital payments revolution

Aaron Klein documents that, “whereas America led the global revolution in payments half a century ago with magnetic striped credit and debit cards, China is leading the new revolution in digital payments,” moving to a system based on smartphones and QR codes (two-dimensional bar codes), in which traditional banks play a diminished role.

Dealing with demand for China’s global surveillance exports

Sheena Chestnut Greitens traces the growing global adoption of China’s public security and surveillance technology platforms. Greitens finds that there is relatively little correlation between such platform adoption and the levels of democracy or freedom in adopting countries, and that both “push” and “pull” factors appear to be driving the adoption of this technology.  She recommends that the United States urgently propose a set of standards that respect human rights, civil liberties, privacy, and democracy.

China’s approach to tech talent competition

Remco Zwetsloot explores China’s approach to global technology talent competition. He describes China’s strategy to grow its science and technology talent as: 1) improving domestic education; 2) attracting overseas Chinese talent; and 3) attracting foreign talent. Zwetsloot asserts that the U.S. should avoid restrictions that hinder the United States’ ability to retain Chinese talent, coordinate technology transfer and related policies with its allies and partners, and pursue domestic education and immigration reform.

Untangling the web: Why the US needs allies to defend against Chinese technology transfer

Andrew Imbrie and Ryan Fedasiuk assert that the United States and its allies must develop targeted and coordinated policies to respond to unwanted Chinese technology transfer, as part of a broader agenda of technology alliance cooperation. Analyzing scholarship programs, technology entrepreneurship competitions, and foreign direct investment as vehicles for technology transfer, Imbrie and Fedasiuk  recommend that the U.S. and its allies gather more data, raise greater awareness of the variety of vehicles China uses for technology transfer, and coordinate investment screening procedures.

China’s role in the global biotechnology sector and implications for US policy

Scott Moore explores China’s trajectory in the global biotechnology sector, arguing that while the U.S. is likely to remain ahead in most biotechnology fields,  China’s biotechnology sector can still  be expected to produce significant innovations in coming years and is therefore poised to become a critical player in policy and governance issues related to biotechnology. Despite ethical and security concerns, Moore notes that shared interests in biosafety and biosecurity protocols could open channels of cooperation in the way that shared concerns about nuclear security and nonproliferation did in previous decades.

Managing China’s rise in outer space

Frank A. Rose outlines how China has rapidly expanded its presence in outer space in both the civil and military arenas. Rose argues that, in light of these developments, the United States will need to develop a strategy that deters China’s advancing anti-satellite (ASAT) capabilities, while also addressing sustainability and safety concerns like orbital debris, space traffic management, and the rise of mega-satellite constellations.

Secure power: Gigawatts, geopolitics, and China’s energy internet

Tom Stefanick argues that the United States’ and China’s mutual concern about the security of their increasingly complex electrical grids could provide an opening for mutual restraint on activities perceived as threatening each other’s grid networks. Stefanick focuses on the application of AI and, in the future, the potential for quantum applications as well.

Maintaining China’s dependence on democracies for advanced computer chips

Saif M. Khan and Carrick Flynn address China’s ambitions, achievements, and obstacles in developing an indigenous semiconductor industry, and argue that it is in the strategic interest of the United States and democratic allies and partners for China to remain reliant on them for state-of-the-art computer chips. Khan and Flynn recommend coordinated, multilateral export controls on semiconductor manufacturing equipment to slow, if not halt, China’s progress toward producing advanced chips, and thereby inhibit China’s development and use of dangerous or otherwise concerning technologies.