News from the IPL
The Benefits of an Apathetic Anchor: Why Waterloo Adjusted Faster than Ottawa
Darius Ornston & Lorena Camargo
Why do some communities bounce back from anchor firm collapse more quickly than others? This paper compares Ottawa and Waterloo, two high-technology ecosystems dominated by large, flagship firms, Nortel and Research in Motion (RIM). The Waterloo region adapted rapidly to RIM’s decline, buoyed by the proliferation of local, high-technology startups. By contrast, Nortel’s failure was deeply disruptive. Although Ottawa’s high-technology ecosystem rebounded, recovery was painful, protracted and, in some ways, incomplete. After eliminating several alternative explanations, we conclude that there is a trade-off in the way communities embed anchor firms. In Ottawa, Nortel was deeply embedded through market-based and associational channels. These ties maximized knowledge spillovers and entrepreneurial recycling as it grew, but simultaneously increased the region’s vulnerability to disruptive shocks. By contrast, RIM was an apathetic anchor. It donated generously to community causes, but was otherwise less engaged within its local, high-technology ecosystem. This distance limited positive spillovers as RIM expanded in the aughts. By creating space for independent enterprises and entrepreneurial programming, however, its apathy enabled the region to capitalize on the opportunities presented by the firm’s decline.
Editor's Pick
The impact of Artificial Intelligence on the labour market: What do we know so far?
Marguerita Lane and Anne Saint-Martin, OECD
This literature review takes stock of what is known about the impact of artificial intelligence on the labour market, including the impact on employment and wages, how AI will transform jobs and skill needs, and the impact on the work environment. The purpose is to identify gaps in the evidence base and inform future OECD research on AI and the labour market.
Cities, Clusters & Regions
The black box of regional growth
Markus Grillitsch, Mikhail Martynovich, Rune Dahl Fitjar & Silje Haus-Reve, Journal of Geographical Systems
Regional growth models leave a large share of variation unexplained. While we should continuously aim to improve these models, the unique combination of conditions and human agency in each region will also invariably lead to region-specific growth trajectories. Theoretically, we should thus expect systematic deviations from growth predictions. We propose an approach to explore these unexplained deviations and to detect regions that perform unexpectedly well or badly in certain periods. We illustrate the approach using data for Sweden from 1990 to 2016. We find systematic patterns of unexplained periodic regional growth deviations outweighing the effect of generic structural factors.
Statistics
What happened to jobs at high risk of automation?
Alexandre Georgieff and Anna Milanez, OECD
This study looks at what happened to jobs at risk of automation over the past decade and across 21 countries. There is no support for net job destruction at the broad country level. All countries experienced employment growth over the past decade and countries that faced higher automation risk back in 2012 experienced higher employment growth over the subsequent period. At the occupational level, however, employment growth has been much lower in jobs at high risk of automation (6%) than in jobs at low risk (18%). Low-educated workers were more concentrated in high-risk occupations in 2012 and have become even more concentrated in these occupations since then. In spite of this, the low growth in jobs in high-risk occupations has not led to a drop in the employment rate of low-educated workers relative to that of other education groups. This is largely because the number of low-educated workers has fallen in line with the demand for these workers.Going forward, however, the risk of automation is increasingly falling on low-educated workers and the COVID-19 crisis may have accelerated automation, as companies reduce reliance on human labour and contact between workers, or re-shore some production.
Study: The changing nature of work in Canada amid recent advances in automation technology
Statistics Canada
This new Statistics Canada study is the first to track trends in the share of workers employed in four different occupational task groups from 1987 to 2018, with a focus on the degree of routine or non-routine and cognitive or manual tasks required in workers’ occupations. This study, conducted in collaboration with the Institute for Research on Public Policy and published in the first issue of the new Statistics Canada publication Economic and Social Reports, also examined the detailed job tasks performed by employees from 2011 to 2018—a period of rapid advances in AI and machine learning. The results reveal a gradual shift from occupations involving routine tasks to those involving non-routine tasks over the past three decades. No sudden shifts were observed over the last decade as the development of AI expanded. This suggests that—at least until 2018—AI has not accelerated the changing nature of work in Canada, which had already been underway for decades. Nonetheless, the cumulative changes over this period are notable.
Innovation Policy
A new UK research funding agency
UK House of Commons Science and Technology Committee
The December 2019 Queen’s Speech set out the Government’s intention to establish “a new approach to funding emerging fields of research and technology”, which would “provide long term funding to support visionary high-risk, high-pay off scientific, engineering, and technology ideas”. The previous Queen’s Speech—in October 2019—had explained that this would be “broadly modelled” on the US Defense Advanced Research Projects Agency (DARPA), which was created in 1958 (initially as ARPA) with the purpose of forming and executing research and development projects to expand the frontiers of technology and science. This Report examines the UK Government’s proposal to establish a new UK research funding agency and sets out findings on the need for the new agency, the role the new agency could play and how the new agency should be established and function. The report finds a role for a “body that sits outside and operates in a different way to the established UK research funding mechanisms, with a different culture and which is able to operate free of some of the structures that are necessary for the dominant research funding institution.” We conclude that UK ARPA should provide “goal-oriented research, driven by societal need, with the potential to produce lasting, transformational changes” while focusing “on ‘mission-based’ or ‘challenge-led’ research, aligned with the long-term goals of the nation, which has the potential to make transformative changes with implications for the economy and wider society.”
MEP Centers continue to deliver consistent ROI to nation
SSTI
This article summarizes new analysis from the W.E. Upjohn Institute on the US Manufacturing Extension Partnership (MEP) Centers. MEP Centers deliver technical assistance to primarily small- and medium-sized manufacturing establishments to help them improve their productivity and competitiveness. The report finds that the MEP Centers continued to deliver a “consistent and significant return on investment to the nation,” in FY 2020. The research team models different scenarios to estimate the broader economic effects of the collective activities of its MEP Centers on the U.S. economy, and found that the federal investment of $146 million into MEP Centers yields a return to the Treasury of about $1.99 billion, for a return of 13.6:1 according to one estimate. Using a conservative, firm-based scenario, MEP and its centers contributed to the addition of an estimated 252,631 jobs to what was an uneven economy. In addition, the study notes that the combined efforts added just over $39 billion in output, an additional $21 billion in gross domestic product (GDP), and more than $15 billion in personal income to the economy in FY 2020.
France and Germany line up for quantum leap
Éanna Kelly, Science Business
This article summarizes recent investments in quantum computing by France (€1.8 billion) and Germany (€2B billion). France’s 5 year strategy places an emphasis on quantum computers, increasing public investment in the field from €60 million to €200 million per year, putting France in third place behind China and US for quantum funding. With these efforts, France has a chance to become “the first state to acquire a complete prototype of [a] quantum computer,” said President Emmanuel Macron introducing the plan on 22 on January.
Policy Digest
The White House
On February 11, 2021, the Biden Administration announced the launch of a new research working group called the Climate Innovation Working Group, an outline of the Administration’s innovation agenda, and a new $100 million funding opportunity from the U.S. Department of Energy to support transformational low-carbon energy technologies. The new Climate Innovation Working Group is part of the National Climate Task Force and will advance Biden’s commitment to launching an Advanced Research Projects Agency-Climate (ARPA-C). The working group will “help coordinate and strengthen federal government-wide efforts to foster affordable, game-changing technologies that can help America achieve the President’s goal of net zero economy-wide emissions by 2050 and can protect the American people from the impacts of droughts and flooding, bigger wildfires, and stronger hurricanes.” The working group will be co-chaired by the White House Office of Domestic Climate Policy, Office of Science of Technology and Policy, and Office of Management and Budget.
The Administration summarized the following key planks of the agenda the Climate Innovation Working Group will help advance:
- zero net carbon buildings at zero net cost, including carbon-neutral construction materials;
- energy storage at one-tenth the cost of today’s alternatives;
- advanced energy system management tools to plan for and operate a grid powered by zero carbon power plants;
- very low-cost zero carbon on-road vehicles and transit systems;
- new, sustainable fuels for aircraft and ships, as well as improvements in broader aircraft and ship efficiency and transportation management;
- affordable refrigeration, air conditioning, and heat pumps made without refrigerants that warm the planet;
- carbon-free heat and industrial processes that capture emissions for making steel, concrete, chemicals, and other important industrial products;
- carbon-free hydrogen at a lower cost than hydrogen made from polluting alternatives;
- innovative soil management, plant biologies, and agricultural techniques to remove carbon dioxide from the air and store it in the ground;
- direct air capture systems and retrofits to existing industrial and power plant exhausts to capture carbon dioxide and use it to make alternative products or permanently sequester it deep underground.
Finally, the Administration also announced $100 million in funding for U.S. Department of Energy via the Advanced Research Projects Agency-Energy (ARPA-E) to support transformational low-carbon energy technologies. The ARPA-E announcement “invites experts across the country to submit proposals for funding to support early-stage research into potentially disruptive energy technologies, specifically encouraging inter-disciplinary approaches and collaboration across sectors.”
Links to recent IPL webinars
Canada’s future skills strategy: Workforce development for inclusive innovation
This is a recording of the January 19th 2021 webinar discussing the Future Skills Council report, released in November 2020, which recommends equitable and competitive labour market strategies in response to disruptive technological, economic, social and environmental events. It aims to provide a roadmap to a stronger, more resilient future for Canada. In this webinar, panelists discuss the report’s key action areas and pathways to successful implementation. Speakers: Rachel Wernick, Denise Amyot, Dan Munro, & David Ticoll.
Inclusive Innovation: COVID and After
This is a recording of the December 10th 2020 webinar discussing the importance of inclusive innovation; policies needed to bring it about; opportunities and prospects for doing so in the era of COVID-19; and new initiatives for measuring and tracking progress – including GDP 2.0 and the Innovation Policy Lab’s Inclusive Innovation Monitor. Speakers: Dan Breznitz, Susan Helper, Daniel Munro, & Anjum Sultana
Urban Leadership & Innovation During Times of Crisis
This is a recording of the Dec 3rd 2020 webinar discussing how urban leaders are the frontlines of crisis response, from the COVID-19 the pandemic and its associated economic, social and fiscal challenges to the growing protests over racial and economic justice and the looming reality of climate change. This session highlights the way urban leaders can best respond to build more inclusive, just and resilient cities and generate the policy innovations that can shape enduring change. Speakers: Richard Florida, Anita McGahan, Shauna Brail, & Supriya Dwivedi
Canada’s Innovation Imperative
This is a recording of the November 9, 2020 event. Innovation contributes to regional and national prosperity and is a well-established economic concept. To succeed in building capacity and strength in this technical realm, government policies must be deliberate, systematic and rooted in expertise. Data shows that Canada missed the shift from the tangible to intangible economy. Moving forward, how can we make sure Canada builds competitive advantage through policy that leverages innovation for tomorrow’s economy? Speakers: Jim Balsillie, Dan Breznitz, Meagan Simpson (moderator).
This is a recording of the November 12, 2020 event. Bank of Canada Senior Deputy Governor Carolyn A. Wilkins outlines how the COVID-19 crisis has damaged economic potential and discusses what will be needed to thrive in the post-pandemic world. Speakers: Carolyn Wilkins, Michael Sabia, Shauna Brail (moderator).
Policymaking Under Uncertainty
This is a recording of the Oct. 14th, 2020 event focused on Policymaking Under Uncertainty. Policymaking is a challenging endeavour under the best of times, as politicians and bureaucrats seek to juggle the need for rapid and innovative interventions on the one hand with democratic accountability on the other. Speakers: Uri Gabai, Darius Ornston, Sylvia Schwaag Serger, and Dan Breznitz
This is a recording of the Jul 16th, 2020 event focused on exploring the short and long term impacts of the COVID-19 pandemic on innovation and entrepreneurial ecosystems. Panelists included Catherine Beaudry, Ben Spigel, Tara Vinodrai, and David Wolfe.
Will COVID-19 Bring Us Together or Blow Us Apart? The Global Security Implications of the Pandemic
This is a recording of the July 7th, 2020 event focused on the national and international security implications of the COVID-19 pandemic. Janice Stein discusses the historical security lessons of previous pandemics and depressions, Jon Lindsay considers emerging military and strategic dangers exacerbated by COVID-19, and Ron Deibert discusses the cybersecurity and surveillance threats associated with the unprecedented relocation of life online.
This is a recording of the June 11, 2020 event focused on how will COVID-19 shape the future of our cities. Join experts Anita McGahan, Shauna Brail (School of Cities), and Nathalie des Rosiers (Massey College), Richard Florida (School of Cities Professor) as they discuss cities after COVID with Marcia Young, host of CBC’s World Report.
This is a recording of the June 11, 2020 event focused on the impact of COVID-19 on higher education. Speakers: Shiri Breznitz, Heike Mayer, Donald Siegel and Elvira Uyarra.
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.
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.
Events
Regional Innovation Policies Conference
Aalborg, Denmark, 25-26 March 2021 CANCELLED
Due to the COVID-19 outbreak the conference scheduled for March 25 and 26, 2021 in Aalborg, Denmark has been cancelled. The next RIP Conference is scheduled for Prague in August, 2021. 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.
May 10-13, 2021 | May 10 – Pre-conference Summer School
Virtual conference
The Partnership for the Organization of Innovation (4POINT0) is organizing the first ‘‘Policies, Processes and Practices for Performance of Innovation Ecosystems” (P4IE) international conference on 10-13 May 2020. 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.
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe