News from the IPL
RESEARCH
A rise in software-related R&D spending is a promising trend
Dan Munro & Craig Lamb, Policy Options
This co-authored article by IPL Senior Fellow Dan Munro discuses trends in business enterprise expenditure on research and development (BERD). The article notes that while there has been a promising increase in software-related R&D spending, “the troubling news is that foreign-owned firms are driving R&D spending on intangible assets.”
Inclusive Innovation Monitor: Tracking inclusive innovation for a fairer, more prosperous Canada
Innovation Policy Lab (IPL) & the Brookfield Institute for Innovation + Entrepreneurship (BII+E)
This joint project between the Brookfield Institute for Innovation + Entrepreneurship (BII+E) at Ryerson University and the Innovation Policy Lab (IPL) at the University of Toronto’s Munk School of Global Affairs & Public Policy features work by IPL co-director Dan Breznitz and IPL Senior Fellow Dan Munro. This project is “a living, growing repository for data and analysis of inclusive innovation in Canada.” The online repository allows users to track Canada’s progress on more than 30 metrics of inclusive innovation. The report notes that “by tracking performance across innovation and inclusion opportunities, activities, and outcomes metrics, we will provide policymakers with a clearer foundation from which to develop targeted policies and programs that improve growth and distribution.”
Editor's Pick
4th Annual IP Data & Research Conference
CIGI & CIPO
This page provides videos and presentation sides from the 4th Annual IP Data & Research Conference, organized by the Canadian Intellectual Property Office (CIPO) and the Centre for International Governance Innovation (CIGI) on Thursday, March 11, 2021. The conference examined the integral relationship between intellectual property (IP) and economic growth, focusing on the importance of IP ownership to economic success, the impact of the coronavirus disease 2019 (COVID-19) on the demand for IP, clean technology as a driver of growth and the increasing importance of data in driving decision making. Opening remarks were delivered by Simon Kennedy, deputy minister of Innovation, Science and Economic Development (ISED), followed by keynote speaker Jim Balsillie, retired chairman and co-CEO of Research in Motion (BlackBerry), philanthropist, innovator and founder of both CIGI and the Balsillie School of International Affairs (BSIA) in Waterloo.
Cities, Clusters & Regions
Henry Wai-chung Yeung, Regional Studies
This annual lecture paper bridges two influential but parallel literature strands on evolutionary economic geography (EEG) and global production networks (GPN). It argues that both strands are premised on their different conceptions of ‘regional worlds’ of production – a more endogenous view in EEG and a more relational view of ‘interconnected worlds’ of production in GPN studies. Drawing on EEG’s core concept of related variety in regional diversification, the paper theorizes how regional strategic coupling with GPN can serve as a causal mechanism for realizing related diversification by highlighting the importance of extra-local/regional linkages and production network dynamics.
Statistics
Study: Measuring digital intensity and its impact on the Canadian economy
Statistics Canada
Over the past two decades, Canada has embraced digital technologies at an unprecedented pace and breadth as businesses and individuals have relied increasingly on digital products and services. These two articles released in Economic and Social Reports provide results from a new composite index developed by Statistics Canada researchers to provide a comprehensive measure of digitization so that its impact on the Canadian economy can be better analyzed and understood. The articles use the index to describe the intensity of digitization in Canadian industries, as well as to measure and compare the economic performance between sectors in which digital inputs have been used more intensively in the production process and those in which they have not.
Innovation Policy
U.S. National Security Commission on Artificial Intelligence
The mandate of the National Security Commission on Artificial Intelligence’s (NSCAI) is to make recommendations to the President and Congress to “advance the development of artificial intelligence, machine learning, and associated technologies to comprehensively address the national security and defense needs of the United States.” This Final Report presents the NSCAI’s strategy for winning the artificial intelligence era. The 16 chapters in the Main Report provide topline conclusions and recommendations. The accompanying Blueprints for Action outline more detailed steps that the U.S. Government should take to implement the recommendations.
China spending on research and development to rise 7% per year in push for major tech breakthroughs
Arjun Kharpal, CNBC
This post summarizes a recent announcement by Premier Li Keqiang outlining China’s plan to increase research and development spending by more than 7% per year between 2021 and 2025. China also plans to focus on developing a number of technology areas including semiconductors, health care, quantum computing and cloud computing, according to a draft of its five-year plan.
Recent Research: Innovation vouchers found to increase SME patenting, other positive impacts
Kevin Michel, SSTI
This post summarizes a recent working paper from the Innovation Growth Lab (IGL) series featuring researchers from the Max Planck Institute for Innovation and Competition. The paper provides causal evidence on the effectiveness of innovation vouchers and adds to the argument for implementing small-scale government funding mechanisms like innovation vouchers. Innovation vouchers are designed to link small and medium-sized enterprises (SMEs) with external knowledge resources to promote small-scale innovations.
Policy Digest
The Kalifa Review of UK FinTech
Independent report on the UK Fintech sector by Ron Kalifa OBE
This report is the result of an independent review by Ron Kalifa OBE to identify priority areas to support the UK’s fintech sector. The report was commissioned in budget 2020 and formally launched in July 2020 with objectives for supporting the growth and widespread adoption of UK fintech, and for maintaining the UK’s global fintech reputation. The Kalifa Review of UK Fintech “highlights the opportunity to create highly skilled jobs across the UK, boost trade, and extend the UK’s competitive edge over other leading fintech hubs.”
The review advanced “both a strategy for the fintech sector and a delivery model to help the UK realize it.” The Five-Point Plan of policy recommendations are summarized as follows:
Policy and Regulation
- Deliver a digital finance package that creates a new regulatory framework for emerging technology: The UK must prioritize new areas for growth and cross-industry challenges such as financial inclusion, and adopt specific policy initiatives that will help create an enhanced environment for fintech, such as digital ID and data standards.
- Implement a “Scalebox” that supports firms focusing on scaling innovative technology: This would include enhancing the Regulatory Sandbox, making permanent the digital sandbox pilot, introducing measures to support partnering between incumbents and fintech and regtech firms, and providing additional support for regulated firms in the growth phase.
- Establish a Digital Economy Taskforce (DET): Multiple departments and regulators have important fintech competencies and functions. The DET would be responsible for collating this into a policy roadmap for tech and digital, in particular, the digital finance package. It would provide a ‘single customer view’ of the government’s regulatory strategy on tech and a single touchpoint for the private sector to engage.
- Ensure that fintech forms an integral part of trade policy: The UK must build upon early successes and ongoing industry engagement and further develop its global trade policy in relation to fintech, ensuring a coherent and consistent approach, as well as to secure commitments in its future trade agreements that would benefit fintech.
Skills
- Retrain and upskill adults to meet the needs of UK fintech by ensuring access to short courses from high-quality education providers at low cost: It is estimated that 90% of the UK workforce will need to be reskilled by 2030. Covid has intensified this challenge. Fintech has the potential to create new jobs and support effective retraining and upskilling efforts across the UK.
- Create a new visa Stream to enhance access to Global Talent for fintech scaleups: UK fintech thrives on recruiting and retaining talent from across the globe. Foreign talent represents c.42% of UK fintech employees. In order to remain a global leader in fintech, the UK needs to strengthen its position on immigration or risk a significant shortage in human capital.
- Build a pipeline of fi ntech talent by supporting fintech scaleups to offer embedded work placements to Further Education and Higher Education students and Kickstarters.
Investment
- Expand R&D tax credits, Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT): 97% of founders have used tax-incentivised investment schemes including EIS, Seed Enterprise Investment Scheme (“SEIS”) and VCT, 47% were concerned about their ability to qualify for such tax relief if their business models switched from being unregulated to regulated in the future.
- Unlock institutional capital to create a £1bn “Fintech Growth Fund” of sufficient scale to act as the catalyst in developing a world leading ecosystem: With a £2bn fintech growth capital funding gap11 in the UK, many entrepreneurs prefer to sell rather than continue to build their promising company. There is £6 trillion in UK private pension schemes alone, a small portion of which could be diverted to high growth technology opportunities like fintech. This is likely to fall within the remit and interests of the Productive Finance Working Group.
- Improve the listing environment through free float reduction, dual class shares and relaxation of pre-emption rights: Out of the 3,787 initial public offerings (IPOs) at the world’s major stock exchanges between 2015 and 2020, the US alone accounted for 39% (via the NASDAQ and the NYSE), while the UK trailed with 4.5%.
- Create a global family of fintech indices to enhance sector visibility: Once enough UK fintech companies have listed and formed a sub-sector, a UK index could become a bellwether for all UK fintech stocks and cement the country’s reputation as a listing destination.
International
- Drive international collaboration through the Centre for Finance, Innovation and Technology (CFIT), and launch an International Fintech Taskforce: Led by Government with the purpose of gathering fintech and industry input to achieve progress against the ‘international plan for fintech’.
- Launch an international “Fintech Credential Portfolio” (FCP) to support international credibility and increase ease of doing business: Led by CFIT, the FCP will help fintechs demonstrate an international sign of quality, resilience, trust and standing to participants in international markets
National Connectivity
- Drive national coordination strategy through CFIT: To ensure future fintech competitiveness and growth across the UK connectivity.
- Accelerate the development and growth of fintech clusters through further investment such as in R&D.
Delivery
- Establish a government-backed “Centre for Finance, Innovation and Technology” (CFIT), mandated and supported by the Government, but led by the private sector to coordinate targeted fintech policies that aim to scale the sector. CFIT will build “execution capability” against all three of the opportunities identified above.
- Future jobs, nationwide: Build a skills platform that will deliver short-courses from approved providers for upskilling and re-skilling and an exchange to place HE/FE students into work placements in the sector.
- Trade and Global leadership: Alongside DIT, support the execution of the international plan for fintech and align the UK’s strengths in fintech with trade agreements and developing markets.
- Inclusion and Recovery: Industry wide coalitions on key issues like financial inclusion, SME lending, Open Finance and Digital ID. These would bring together banks, Big Tech, data providers, fintechs and policymakers to solve the challenges of scaling solutions and creating economic benefits.
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
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.
Subscriptions & Comments
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe