The IPL newsletter: Volume 21, Issue 424

News from the IPL

UPCOMING EVENTS

The Future of the University

June 11, 2020 11:00am
Join international experts, Shiri Breznitz, Heike Mayer, Donald Siegel and Elvira Uyarra, for this online event as they discuss the impact of COVID-19 on higher education.

“New Beginnings” After COVID for Cities: June 16th, 2020 Time TBD
Anita McGahan, Shauna Brail (School of Cities), and Nathalie des Rosiers (Massey College), Richard Florida (School of Cities Professor)

Links to Recent Webinars

The Future of (Decent?) Work After COVID-19

This is a recording of the May 26, 2020 Munk School / Innovation Policy Lab / CIFAR event focused on the future of work after COVID-19. Speakers: Dan Breznitz, Zabeen Hirji and Peter Warrian.

The World after Covid-19

This is a recording of the May 11th 2020 event focused on “what will the world look like in the wake of COVID-19?” Speakers: Shauna Brail, Anita McGahan, Tara Vinodrai and Shiri Breznitz.

COVID-19 and the World’s Grand Challenges

This is a recording of the May 8th 2020 event focused on “what impact will COVID-19 have on the achievement of the Sustainable Development Goals (SDGs)?” Speakers: Anita McGahan, Joseph Wong and Karlee Silver.

How is COVID-19 affecting global supply chains?

This is a recording of the April 29th 2020 event focused on “how is COVID-19 affecting supply chains in Canada and around the globe?” Speakers: Dan Breznitz, Shauna Brail and Steven Denney.

RESEARCHERS

Policy Options For Building Resilient U.S. Medical Supply Networks

David Adler, Dan Breznitz & Susan Helper, Washington Center for Equitable Growth
IPL co-director Dan Breznitz co-authored this article asserting that U.S. policymakers need to plan to rebuild the U.S. production of key medical products. They then need to act on these plans to be fully prepared for the next pandemic or other public health crises. The authors recommendations are in three broad categories: Identify and assure stable long-term U.S. demand for key medical products; Rebuild U.S. supply capabilities; and Promote productive investment and good jobs in medical supply chains.

Innovation experts say COVID-19 exposing vulnerabilities of Canada’s economy

Brenna Owen, The Canadian Press
This article features an interview with IPL co-director Dan Breznitz. The article discusses how the COVID-19 crisis is likely to expose existing vulnerabilities in the Canadian economy related to competing in the innovation economy.

INTERVIEW

Neil Lee is an Associate Professor of Economic Geography at the LSE. He joined the Department in 2013, having previously been Head of Socio-Economic Research at The Work Foundation. Neil delivered a talk in November at the IPL titled “Testbeds as innovation policy: A survey”. Interview and transcription performed by Zissis Hadjis on November, 28 2019.

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?
I focus on the causes and consequences of economic development. I’m interested in why some cities and regions in the same country can be poorer than others, and what the drivers are. London’s amazing because it’s one of the richest places on earth, but it also has these massive concentrations of poverty. I’m really interested in why that’s the case and what you can do to promote inclusive growth.

Are there any updates from your work or current projects that you can share?
I have a really exciting project right now with a PhD student about deal-makers. What this PhD student managed to do is get data in the UK ranging back to the 1800s in order to investigate patterns of who is on multiple boards, who is associated with multiple companies, etc. The early results suggest that actually this is quite a powerful determinant of local innovation. Another project I’m excited about is one about social capital and Trump, which showed that places were much more likely to vote for Trump if they have a combination of high social capital, but also had experienced economic decline or had some high levels of inequality. We have to work out what that means exactly, but it is very interesting for me because it speaks to a wider sociological phenomenon.

What impact do you hope your research can have?
I’m really interested in making sure that my research has some impact on policy, but I don’t think I’m naive about it. I don’t expect my research to have a linear effect on policy, but what I do want is to make sure that there is evidence about things which I care about – because then people are more likely to act on them.

What are the biggest opportunities and challenges facing your area of research?
I think the growth and advancement of technology is a massive opportunity to gather data on the type of work that I do. At the same time, it can also be a challenge. The methods I used on a paper three years ago probably wouldn’t be used today because things move so quickly.

What do you think the innovation landscape will look like in 5 or 10 years?
I’m not sure. I think tech issues are going to really begin to influence how we think of research, and we are going to have to be open to new techniques and technologies.

What was the best book (or article) you’ve read recently? Why?
One article that I read recently again and thought was brilliant was “The Economic Geography of the Internet Age”, by my colleague Michael Storper and Edward Leamer. Also, I have to say I really loved “Bad Blood: Secrets and Lies in a Silicon Valley Startup” by John Carreyrou.

What advice would you give a new graduate student interested in innovation?
I would say get to really know people. One thing about academia is that people often seem quite scary, but they’re mostly really nice.

Editor's Pick

Nearly Half of Canadian Tech Companies Report Decrease in Value Due to COVID-19, Survey Finds

Betakit, Meagan Simpson
This article summarizes findings from a new survey conducted by the Council of Canadian Innovators (CCI) on the impacts of the COVID-19 pandemic on Canadian technology firms. The industry association’s survey yielded 307 responses from its membership of high-growth Canadian technology firms. The results show that 49 percent of firms reported having experienced a decrease in company value, directly connected to COVID-19. The survey also found that the average workforce decrease across the tech ecosystem was -8.5 percent. Respondents to CCI’s survey also reported a 37 percent increase in merger and acquisition (M&A) interest around high-growth Canadian companies.

Cities, Clusters & Regions

Entrepreneurship and the Fight Against Poverty in US Cities

Neil Lee and Andrés Rodríguez-Pose
Entrepreneurship is sometimes portrayed as a cure-all solution for poverty reduction. Proponents argue it leads to job creation, higher incomes, and lower poverty rates in the cities in which it occurs. Others, by contrast, posit that many entrepreneurs are actually creating low-productivity firms serving local markets. Yet, despite this debate, little research has considered the impact of entrepreneurship on poverty in cities. This paper addresses this gap using a panel of US cities for the period between 2005 and 2015. We hypothesize that the impact of entrepreneurship depends on whether it occurs in tradeable sectors – and, therefore, is more likely to have positive local multiplier effects – or non-tradable sectors, which may saturate local markets. We find that entrepreneurship in tradeable sectors reduces poverty and increases incomes for non-entrepreneurs. The result is confirmed using an instrumental variable approach, employing the inheritance of entrepreneurial traits as an instrument. In contrast, while there are some economic benefits from non-tradeable entrepreneurship, we find these are not large enough to reduce poverty.

The Cost of Uncoordinated Responses to COVID-19

MIT Initiative on the Digital Economy
Social distancing is the core policy response to COVID-19. But as federal, state and local governments begin opening businesses and relaxing shelter-in-place orders worldwide, we lack quantitative evidence on how policies in one region affect mobility and social distancing in other regions and the consequences of uncoordinated regional policies adopted in the presence of such spillovers. We therefore combined daily, county-level data on shelter-in-place and business closure policies with movement data from over 27 million mobile devices, social network connections among over 220 million of Facebook users, daily temperature and precipitation data from 62,000 weather stations and county-level census data on population demographics to estimate the geographic and social network spillovers created by regional policies across the United States. Our analysis showed the contact patterns of people in a given region are significantly influenced by the policies and behaviors of people in other, sometimes distant regions. When just one third of a state’s social and geographic peer states adopt shelter in place policies, it creates a reduction in mobility equal to the state’s own policy decisions. These spillovers are mediated by peer travel and distancing behaviors in those states. A simple analytical model calibrated with our empirical estimates demonstrated that the “loss from anarchy” in uncoordinated state policies is increasing in the number of non-cooperating states and the size of social and geographic spillovers. These results suggest a substantial cost of uncoordinated government responses to COVID-19 when people, ideas, and media move across borders.

Innovation Policy

Bipartisan Legislation Would Provide $110 billion For R&D, Regional Innovation

SSTI
A bipartisan, bicameral group of legislators have introduced bills that would make a five-year commitment to increase America’s investment in R&D by $100 billion, while also investing $10 billion in regional technology hubs. Senators Chuck Schumer (D-NY) and Todd Young (R-IN) and Representatives Ro Khanna (D-CA) and Mike Gallagher (R-WI) introduced the Endless Frontiers Act, which articulates both investments. The R&D funding would be housed under a new Directorate for Technology within the National Science Foundation. This directorate would have “DARPA-like authorities” to advance research and applications within 10 technology areas, including artificial intelligence, quantum computing, advanced manufacturing, biotechnology, and materials science

Functional Procurement For Innovation, Welfare and the Environment: A Mission-oriented Approach

Charles Edquist & Jon Mikel Zabala-Iturriagagoitia, Papers in Innovation Studies
Public procurement represents a very large share of most economies worldwide. Besides its direct purchasing power, public procurement has an enormous potential to become one of the most important mission-oriented policy instruments in the context of the Sustainable Development Goals. The paper argues that the key to achieve more innovations when pursuing public procurement is to describe problems to be solved or functions to be fulfilled (functional procurement) instead of describing the products to be bought (product procurement). The authors contend that if products can be described in the procurement documents, it is because they exist, and hence, they cannot be regarded as innovations. Innovations cannot be described ex ante, simply because they do not exist. It is thus not accurate to talk about ‘innovation procurement’. Accordingly, the only way to achieve an innovation by means of procurement is by describing the functions it shall fulfill or the problems it shall solve. For public procurement to become an effective policy instrument supporting innovation, product procurement should thus be transformed into functional procurement. Contracting authorities need to identify the problems to be addressed by policy. The new products (innovations) solving the problems are to be designed by the potential innovators/suppliers, not by public procurers. Hence, the societal needs and problems must be translated and transformed into functional requirements.

Policy Recommendations to Stimulate U.S. Manufacturing Innovation

Stephen Ezell, ITIF
After dropping significantly in the Great Recession, inflation-adjusted U.S. manufacturing output has continued to decline as a share of gross domestic product (GDP), down 3.5 percent between 2009 and 2019 (0.41 percentage points), even with the strong cyclical rebound in the motor vehicle sector. To boost U.S. manufacturing output and innovation, effective manufacturing strategies—articulated at both the federal and state levels and underpinned by a suite of effective, specific policies—will be needed. This report, commissioned by the Indiana University Manufacturing Policy Initiative in partnership with the Hudson Institute, first examines the underperformance of American manufacturing and then examines how a concerted suite of policies—focused on addressing strategy and analysis, technology development and diffusion, finance, tax, and talent challenges and opportunities—could be implemented to revitalize America’s manufacturing economy.

Statistics and Indicators

Measuring NIH SBIR/STTR Awards by State, 2019

Colin Edwards, SSTI
This article analyzes figures from NIH’s SBIR/STTR programs by state, including the success rate of applications, the share SBIR awards make up of NIH funding to for-profit companies by state, and the total number of awards by state.  Nationwide in 2019, NIH made SBIR/STTR awards to 1,329 successful applicants out of 6,084 total applicants — equating to a national success rate of 21.8 percent. While California submitted the most applications (1,333), received the greatest number of awards (270), and received the greatest amount of funding ($116.3 million), it ranked 31st in terms of its application success rate (20.3 percent), which is lower than the national rate.

Winning the Race for Survival: How New Manufacturing Technologies are Driving Business-Model Innovation

World Economic Forum (Platform for Shaping the Future of Advanced Manufacturing and Production)
The COVID-19 pandemic is liberating manufacturing and production companies to experiment with radical new ideas. Firms are coming up with new ways to maintain production despite disrupted supply chains, or they are mobilizing to design new products as demand for existing products collapses. With revenues falling universally, companies are doing everything in their power to safeguard cash reserves. This has allowed some firms to discover new ways of doing things without large investment. In this context, the World Economic Forum has been working with its Advanced Manufacturing and Production community to find the answers and ensure the manufacturing sector remains relevant in this fast-changing environment. The findings are published in three releases: Sinking, swimming or surfing: perspectives on operating and business models (May 2020); Accelerating business models innovation (forthcoming July 2020); and Transforming industries at scale (forthcoming October 2020).

Policy Digest

Putting Innovation to Work for British Columbia: Growing B.C. Companies

This report to B.C.’s Minister of Jobs, Economic Development and Competitiveness from B.C.’s Innovation Commissioner Alan E. Winter is a culmination of the latter’s two years appointment as the province’s Innovation Commissioner.

The report builds on the 2018 Observations on Innovation in British Columbia report, which served as a “snapshot of the investments being made on the provincial, national and international stage, both from the private and public sector.” This 2018 report identified the following elements as key ingredients to sustaining prosperity is through development of a highly innovative economy: access to talent; access to technology and IP to enable growth of B.C.companies; access to capital; and access to markets.

This latest report offers the following five short-to-medium term recommendations based on the observations and feedback gathered by B.C.’s Innovation Commissioner over the past two years:

Recommendation 1: Fund the Establishment and Operation of Innovation Precincts across B.C.
Establish a major innovation precinct around the new St.Paul’s hospital campus, which could be focused on health R&D, would be globally-recognized and enable investment and growth of B.C. companies in health, life science, and supporting areas including IT, AR/VR, medical devices and digital health.

Recommendation 2: Support the Development of Emerging Technology Clusters
The Province of B.C. should work with the federal government to catalyze, align and co-fund key provincial cluster priority areas which would leverage dollars available from several sources such as the federal Strategic Investment Fund.

Recommendation 3: Utilize the CleanBC Plan as an Economic Driver
The Province of B.C., under CleanBC, should incent companies to seek out B.C. solutions when working to meet government’s climate targets and regulations. By better developing, or incenting the domestic supply chain, B.C. solutions can be encouraged, versus imported.

Recommendation 4: Incent and Protect Intellectual Property
The Province of B.C. should provide matched funding to B.C.-based small and medium enterprises to assist them in seeking patent protection, helping inventors and start-ups overcome the expenses related to protecting their intellectual property.

Recommendation 5: Invest in Talent Retention Strategies
Government should build on the successes of the RevUp and similar programs, developing mentorship and leadership skills across the province, incorporating them as a key component of precincts, and as a means to supporting local companies’ growth.

Events

DRUID20 Silver Anniversary Conference
Copenhagen, Denmark, 15-17 June, 2020

THIS CONFERENCE HAS BEEN CANCELLED DUE TO CONCERNS ABOUT COVID-19 AND RECENT TRAVEL ADVISORIES.

DRUID celebrates 25 years as 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 the DRUID20 SILVER ANNIVERSARY CONFERENCE, hosted by Copenhagen Business School. Presenting distinguished plenary speakers, a range of parallel paper sessions, and an attractive social program that celebrates DRUID’s 25 years, 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.

Regional Innovation Policies Conference

Aalborg, Denmark, 25-26 March 2021
Due to the COVID-19 outbreak the conference has been postponed to March 25 and 26, 2021 in Aalborg, Denmark. The conference will focus on regions in transformation – as well as transformations in regional innovation policy and new developments in methods for defining and analyzing regions. Submission deadline: 30th November 2020.

Canadian Science Policy Conference

Ottawa, Canada, 23-25 November, 2020
The CSPC 2020 call for panel proposals is now open. The 12th Canadian Science Policy Conference (CSPC 2020), will be held in Gatineau Quebec on November 23-25, 2020 at Hilton Lac-Leamy. Presenters are invited to submit proposals in a variety of presentation formats that revolve around any of the conference themes. Due to the unprecedented impact of the COVID-19 pandemic on individuals and organizations across Canada and the world, and to accommodate the community, CSPC is extending the panel proposal deadline by an additional four weeks, to May 15th, 2020.

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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe