News from the IPL
EVENTS
Book Launch: Innovation in Real Places: Strategies for Prosperity in an Unforgiving World
April 21, 2-3pm
Dan Breznitz, Co-Director Innovation Policy Lab
For the last few decades, the dominant growth model has been to focus on technological innovation. Yet, while a small number of cities and regions have benefited, many other communities have struggled. In his latest book, Innovation in Real Places: Strategies for Prosperity in an Unforgiving World, Dan Breznitz sets out to challenge this model and sets out how these communities might succeed. He argues that by understanding the changed structure of the global system of production and then using those insights to enable communities to recognize their own advantages, cities and regions can foster surprising forms of specialized innovation. Join us on April 21, as Dan Breznitz sits down to discuss his new book with The Economists’ US Technology Editor, Ludwig Siegele. Innovation in Real Places is currently available as an ebook and will be available at local bookstores, as well as from Indigo and Amazon, on April 17.
RESEARCH
“It’s Not That Hard to Pick Winners”: How Growth and National Context Shape Scale-up Entrepreneurs’ Assessments of Innovation Policy Mixes
Steven Denney, Travis Southin and David Wolfe
Cross-national research shows that large firms, especially those in digitally intensive sectors, exhibit significantly greater market power, higher levels of productivity, and greater innovation capacity. But the challenge of supporting the current generation of scale-ups, the group from which the next generation of large firms is likely to emerge, is not the same for all countries. Companies operating in small and open trading economies face structural barriers that those in larger countries do not, specifically with respect to access to capital, markets, and uneven competition. Canada provides an apt case for investigation, as it is a small, export-oriented, and slower growing economy. It has a comparatively strong start-up ecosystem and a federal government committed to supporting high-growth firms and the creation of more large firms, especially those in knowledge-economy sectors. Despite favourable start-up conditions, relatively few Canadian firms reach scale-up or high-growth status. The failure suggests there has been a substantial disconnect between the innovation policy support provided by successive governments and the domestic technology industry, but begs the question of what is missing? Drawing on interviews with entrepreneurs from Canadian technology scale-ups, complemented by interviews with technology start-ups and key industry actors, this paper find that scale-up entrepreneurs’ policy preferences are rooted in their experiences encountering specific barriers to growth: including lack of access to patient capital, a small internal market, a ‘branch plant’ industrial structure, a neutral innovation policy mix, and fierce competition with larger foreign technology firms. Scale-up entrepreneurs prefer a more active role for federal policy support in the form of demand-side, direct, and targeted innovation instruments. The findings presented in this paper provide a more nuanced understanding of the innovation policy landscape and the preferences of technology scale-up firms.
PRESS
Steven Denney and David Wolfe Special to Financial Post
This article by IPL Co-Director David Wolfe and IPL Post Doctoral Fellow Steven Denney lays out the economic case for focusing innovation supports on Scale-ups. The article notes that these firms are well positioned to advance through the recovery and be a main source of net job growth
Dan Breznitz and Dan Munro, Special to Financial Post
This article by IPL Co-Director Dan Breznitz and IPL Director of Policy Projects Dan Munro articulates why bridging the digital divide is so central to unlocking Canada’s innovation potential. The article argues that that Canada cannot afford to leave our most promising future entrepreneurs and Einsteins behind.
Editor's Pick
Scale the Gap: Exploring gender ownership and growth experiences for Canadian firms
Steven Denney (IPL Post Doctoral Fellow) & Viet Vu (Senior Economist, Brookfield Institute for Innovation + Entrepreneurship)
This report analyzes how gender ownership of a firm impacts its likelihood of becoming a scale-up. These insights are designed to inform policy to support women entrepreneurs. As part of the broader Women Entrepreneurship Strategy, an Innovation, Science, and Economic Development (ISED) initiative to close the gender gap in entrepreneurship, Scale the Gap focuses on filling a critical knowledge gap. A quantitative methods paper, this research complements the qualitative work recently published, Growing their own way: High-growth women entrepreneurs in Canada. Using a representative survey on growth experiences for small and medium firms, we examine the unique challenges women-owned firms face while growing toward scale-up status. We find that, while the gender ownership structure of firms doesn’t inherently impact the likelihood that a firm will scale, scale-ups owned by women tend to be smaller than those with higher men-ownership shares. We also find that when women-owned firms encounter growth challenges — such as regulatory issues and talent-related challenges — differently than men-owned companies, and are less likely to overcome these challenges.
Statistics
OECD Main Science and Technology Indicators Highlights on R&D expenditure, March 2021 release
OECD
This report summarizes data from the latest official statistics for research and development (R&D), which indicate that, prior to the onset of the COVID-19 pandemic, R&D expenditure in the OECD area grew in real terms by 4% in 2019. According to the latest data published on 18 March in the OECD Main Science and Technology Indicators(MSTI)database, OECD R&D intensity (domestic expenditure on R&D expressed as a percentage of gross domestic product(GDP)) rose from 2.4% in 2018 to nearly 2.5% in 2019.
Patenting by Canadian businesses, 2019
Statistics Canada
This post summarizes an article published from the Intellectual Property Awareness and Use Survey (IPAUS) and released by Statistics Canada. This survey was created to establish a baseline on familiarity with and use of IP by Canadian businesses. This survey is also part of the national Intellectual Property Strategy, which was designed to improve access to the IP system for all Canadians, including traditionally underrepresented groups, such as women and Indigenous peoples. Data are available by enterprise size; by sector, according to the North American Industry Classification System; and by economic region, according to the Standard Geographical Classification, for the reference period from 2017 to 2019. High-growth firms were identified as more likely to own patents. These firms represented 7.5% of businesses in Canada but made up 16.7% of businesses that owned patents in Canada and one-fifth of businesses that owned patents outside Canada (19.2%).
Narwhal Project
The Narwhal List was developed to focus attention on the private Canadian technology companies best poised to become world class firms. The list uses three metrics to identify leading firms. These metrics are Financial Velocity, Growth and Firm Size. From publicly available data it has created a Scale-Up Score which rates a firm’s ability to scale to world-class at any stage of its development. Research in over 1,000 companies indicates that a Scale-Up Score of over 25 is critical to enable a firm to continue its trajectory to becoming world-class. This list is created annually.
Venture Capital Highlights and Key Findings
Canadian Venture Capital & Private Equity Association
VC Investment in 2020 closes at CAD $4.4B. Amid the COVID-19 pandemic, VC investment in 2020 was the second-highest level of annual VC investment based on existing CVCA records, with CAD $4.4B across 509 deals, second only to 2019. Total dollars invested in 2020 was higher than the five-year average ($3.8B and 517 deals in 2015 – 2019) with a lower number of deals. The momentum of VC-backed exits is on track relative to previous years, with a total of 38 exits in 2020, which is only slightly below the 5‑year average of 40 exits.
Innovation Policy
Advanced Research and Invention Agency (ARIA): statement of policy intent
UK Department for Business, Energy & Industrial Strategy
This document describes the rationale and intended purpose for the Advanced Research and Invention Agency (ARIA). ARIA is a new research funding body, based on the principles of the US Advanced Research Projects Agency (ARPA).
European Commission
This post summarizes the first strategic plan for Horizon Europe, the new EU research and innovation program worth €95.5 billion in current prices. The strategic plan is a novelty in Horizon Europe and sets the strategic orientations for the targeting of investments in the program’s first four years. It ensures that EU research and innovation actions contribute to EU priorities, including a climate-neutral and green Europe, a Europe fit for the digital age, and an economy that works for people.
Policy Digest
FACT SHEET: The American Jobs Plan
The White House
This post outlines the American Jobs Plan announced by the White House on March 31st 2021. The Plan “is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.” The document notes that “public domestic investment as a share of the economy has fallen by more than 40 percent since the 1960s” and that “the American Jobs Plan will invest in America in a way we have not invested since we built the interstate highways and won the Space Race.”
The American Jobs Plan is organized around six themes:
- Fix highways, rebuild bridges, upgrade ports, airports and transit systems.
- Deliver clean drinking water, a renewed electric grid, and high-speed broadband to all Americans.
- Build, preserve, and retrofit more than two million homes and commercial buildings, modernize our nation’s schools and child care facilities, and upgrade veterans’ hospitals and federal buildings.
- Solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers.
- Revitalize manufacturing, secure U.S. supply chains, invest in R&D, and train Americans for the jobs of the future.
- Create good-quality jobs that pay prevailing wages in safe and healthy workplaces while ensuring workers have a free and fair choice to organize, join a union, and bargain collectively with their employers.
The following is a summary of initiatives under the theme of “Revitalize manufacturing, secure U.S. supply chains, invest in R&D, and train Americans for the jobs of the future”:
Invest in R&D and the technologies of the future (calling on Congress to invest $180 billion)
- Advance U.S. leadership in critical technologies and upgrade America’s research infrastructure. $50 billion in the National Science Foundation (NSF), creating a technology directorate that will collaborate with and build on existing programs across the government and focus on fields like semiconductors and advanced computing, advanced communications technology, advanced energy technologies, and biotechnology. $30 billion in additional funding for R&D that spurs innovation and job creation, including in rural areas. $40 billion in upgrading research infrastructure in laboratories across the country,
- Establish the United States as a leader in climate science, innovation, and R&D. $35 billion in the full range of solutions needed to achieve technology breakthroughs that address the climate crisis and position America as the global leader in clean energy technology and clean energy jobs. This includes launching ARPA-C to develop new methods for reducing emissions and building climate resilience, as well as expanding across-the-board funding for climate research. $5 billion increase in funding for other climate-focused research, $15 billion in demonstration projects for climate R&D priorities, including utility-scale energy storage, carbon capture and storage, hydrogen, advanced nuclear, rare earth element separations, floating offshore wind, biofuel/bioproducts, quantum computing, and electric vehicles, as well as strengthening U.S. technological leadership in these areas in global markets.
- Eliminate racial and gender inequities in research and development and science, technology, engineering, and math. $10 billion R&D investment at Historically Black Colleges and Universities and other MSIs. $15 billion in creating up to 200 centers of excellence that serve as research incubators at HBCUs and other MSIs to provide graduate fellowships and other opportunities for underserved populations, including through pre-college programs.
Retool and revitalize American manufacturers and small businesses (calling on Congress to invest $300 billion)
- Strengthen manufacturing supply chains for critical goods. $50 billion to create a new office at the Department of Commerce dedicated to monitoring domestic industrial capacity and funding investments to support production of critical goods. $50 billion in semiconductor manufacturing and research, as called for in the bipartisan CHIPS Act.
- Protect Americans from future pandemics. $30 billion over 4 years to create U.S. jobs and prevent the severe job losses caused by pandemics through major new investments in medical countermeasures manufacturing; research and development; and related biopreparedness and biosecurity.
- Jumpstart clean energy manufacturing through federal procurement. $46 billion investment in federal buying power to enable the manufacture of cars, ports, pumps, and clean materials, as well as critical technologies like advanced nuclear reactors and fuel
- Make it in ALL of America. $20 billion in regional innovation hubs and a Community Revitalization Fund. At least ten regional innovation hubs will leverage private investment to fuel technology development, link urban and rural economies, and create new businesses in regions beyond the current handful of high-growth centers. $14 billion in NIST to bring together industry, academia, and government to advance technologies and capabilities critical to future competitiveness. The PResident is calling on Congress to quadruple support for the Manufacturing Extensions Partnership —increasing the involvement of minority-owned and rurally-located small- and-medium-sized enterprises in technological advancement.
- Increase access to capital for domestic manufacturers. $52 billion investment in existing capital access programs with a proven track record of success, with a focus on supporting rural manufacturing and clean energy. The Plan includes specific supports for modernizing supply chains, including in the auto sector, like extending the 48C tax credit program and creating a new program to support debt and equity investments for manufacturing to strengthen the resilience of America’s supply chains.
- Create a national network of small business incubators and innovation hubs. $31 billion in programs that give small businesses access to credit, venture capital, and R&D dollars, including funding for community-based small business incubators and innovation hubs to support the growth of entrepreneurship in communities of color and underserved communities.
- Partner with rural and Tribal communities to create jobs and economic growth in rural America. Providing 100 percent broadband coverage, rebuilding crumbling infrastructure like roads, bridges, and water systems, providing research and development funding to land grant universities, and positioning the U.S. agricultural sector to lead the shift to net-zero emissions while providing new economic opportunities for farmers. $5 billion for a new Rural Partnership Program to help rural regions, including Tribal Nations, build on their unique assets and realize their vision for inclusive community and economic development.
Invest in Workforce Development (calling on Congress to invest $100 billion)
- Pair job creation efforts with next generation training programs. $40 billion investment in a new Dislocated Workers Program and sector-based training to ensure comprehensive services for workers, who have lost jobs through no fault of their own, to gain new skills and to get career services they need with in-demand jobs.
- Target workforce development opportunities in underserved communities. $12 billion in support of evidence-based community violence prevention programs, job training for formerly incarcerated individuals and justice-involved youth, and a new subsidized jobs program. The President is calling on Congress to eliminate sub-minimum wage provisions in section 14(c) of the Fair Labor Standards Act and expand access to competitive, integrated employment opportunities and fair wages for workers with disabilities.
- Build the capacity of the existing workforce development and worker protection systems. $48 billion in American workforce development infrastructure and worker protection, including registered apprenticeships and pre-apprenticeships, creating one to two million new registered apprenticeships slots, and strengthening the pipeline for more women and people of color to access these opportunities through successful pre-apprenticeship programs such as the Women in Apprenticeships in Non-Traditional Occupations.
Links to recent IPL webinars
Intellectual Property and Entrepreneurship in Canada
This is a recording of the March 23rd 2021 webinar focused on the importance of IP protection for entrepreneurship, the intellectual property environment in Canada, and existing support for firms. Panelists discussed issues relating to their firm’s ability to secure IP especially as it relates to IP education and the role of government in supporting IP protection.
Speakers: Seray Çiçek, Co-Founder & CEO, LSK Technologies Inc.; Ryan Hubbard, Senior Counsel, IP Litigation, Shopify
Graeme Moffat, Chief Scientist and Co-Founder, System 2 Neurotechnology; Senior Fellow, Munk School of Global Affairs & Public Policy
Moderator: Shiri Breznitz, Associate Professor and Director, Master of Global Affairs Program, Munk School of Global Affairs & Public Policy, University of Toronto
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
Please forward this newsletter to anyone you think will find it of value. We look forward to collaborating with you on this initiative. If you would like to comment on, or contribute to, the content, subscribe or unsubscribe, please contact us at ipl.munkschool@utoronto.ca .
This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe