News from the IPL
RESEARCH
Canada as a Learning Economy: Education & Training in an Age of Intelligent Machines Policy Challenges & Policy Responses
Tracey M. White and David A. Wolfe
This SSHRC-funded Knowledge Synthesis Report was prepared by U of T Political Science PhD Candidate Tracey White and IPL Co-Director David A. Wolfe. Literature analyzed here illuminates the nature of adult education, learning and skills development and forms of work organization as factors in Canada’s innovation performance. In the World Economic Forum’s 2017-18 Global Competitiveness Survey Canada ranked 23rd on its ‘capacity for innovation’ metric. If this country is to have a prosperous, innovative economy then the skills and ingenuity of its people matter. Skills development opportunities for Canadians beyond the formal pre-career education systems are inadequate to meet the demands of a rapidly digitizing economy. It is increasingly clear that Canada’s fragmented approach to adult education is an impediment to labour market flexibility and social mobility on which the digital economy depends. Canada’s labour market institutions were developed to meet the needs of an industrial economy. The moment has arrived to re-imagine them to support Canada as a learning economy. This report reviews the approach of the Danish innovation system to provide an alternative example. It urges Canadian policymakers to make development of human resources a higher priority by reinvigorating labour market governance arrangements and realigning incentives to meet the needs of a digital economy.
How Stories Shape Regional Development: Collective Narratives and High-Technology Entrepreneurship in Waterloo, Canada
Darius Ornston, IPL Affiliated Faculty
The Waterloo region in Canada has emerged as an unlikely competitor in high-technology markets, challenging theories based on path dependency, population density, anchor firms, and military spending. While theorists and residents attribute the rise of high-technology entrepreneurship to cooperation, evidence of collaboration is sparse. This article resolves this puzzle by explaining how ideas can coordinate action in loosely coupled systems. Dense, cross-cutting civic networks may not have supported task-specific cooperation, but they facilitated the construction and diffusion of collective narratives. Conventionally understood to leverage locational assets, the Waterloo case demonstrates how storytelling can also soften geographic constraints. Success stories inspired entrepreneurs by re-conceptualizing what was possible, peer-to-peer mentoring helped firms to navigate local constraints, and external marketing enabled the region to access resources it could not mobilize internally. By documenting the importance of storytelling as a form of collective action, the Waterloo case illuminates a broader array of strategies available to local change agents and smaller regions.
Editor's Pick
Innovation, growth and the transition to net-zero emissions
Nicholas Stern & Anna Valero, Research Policy
The climate crisis and the global economic impact of the Covid-19 crisis occur against a background of slowing growth and widening inequalities, which together imply an urgent need for a new environmentally sustainable and inclusive approach to growth. Investments in “clean” innovation and its diffusion are key to shaping this, accompanied by investments in complementary assets including sustainable infrastructure, and human, natural and social capital which will not only help achieve net-zero greenhouse gas emissions, but will also improve productivity, living standards and the prospects of individuals. This article draws on the theoretical and empirical evidence on the opportunities, drivers and policies for innovation-led sustainable growth. It highlights the importance of a coordinated set of long-term policies and institutions that can enable and foster private sector investments in clean innovation and assets quickly and at scale. In doing so, its draws inspiration from Chris Freeman’s work on the system-wide drivers of innovation, and his early vision of achieving environmental sustainability by reorienting growth.
Cities & Regions
Hans-Christian Busch, Caroline Mühl, Martina Fuchs & Martina Fromhold-Eisebith, Regional Studies
Enabled by Industry 4.0, new forms of productive value creation emerge in urban spaces. But how the value creation of new digital urban production (DUP) differs from that of incumbent manufacturing and how it benefits from urban contexts remain unclear. Closing this gap, we study DUP firms in selected cities of North Rhine-Westphalia, Germany. Results indicate that DUP integrates production and design, and it displays circular problem-based value creation to develop complex production-related solutions. At urban locations, DUP draws particular advantages from proximity to customers, employees and knowledge – conducive context qualities which outweigh the ‘footloosening’ powers of digital tools.
Statistics
Industrial research and development, 2019 (actual), 2020 (preliminary) and 2021 (intentions)
Statistics Canada
In 2019, Canadian businesses spent a record high of $21.7 billion on in-house R&D, which marked a 3.8% increase over 2018 spending. This increase was mainly attributed to a rise in the salary and wages component, as the number of full-time equivalents (FTEs) of R&D personnel rose by 2,549 to reach 167,956 FTEs. The main drivers behind this increase were services-producing industries, particularly those in information and communication technology (ICT) and businesses engaged in software engineering R&D. Preliminary estimates, which are typically conservative, show that in-house R&D expenditures decreased by 3.2% in 2020 to $21.0 billion, while they are projected to stay at $21.0 billion in 2021. The dominance of the ICT sector’s R&D spending is reflected in its R&D intensity, or ratio of R&D spending to value added. From 2014 to 2019, Canadian businesses spent around 1.2% of their total value added (gross domestic product—GDP) on R&D. Over that same period, ICT companies spent between 7.1% and 9.4% of their GDP on R&D.
H1 2021 – VC & PE Canadian Market Overview
Canadian Venture Capital and Private Equity Association
This report summarizes VC and PE investment in Canad for H1 2021. Overall, CAD $5.6B was invested across 216 deals in Q22021 bringing the total VC investment to CAD $8.3B across 394 deals for the first half of 2021, eclipsing all previous full-year totals on CVCA records. There were 39 mega-deals (CAD +$50M) in H12021 totalling CAD $6.2B and accounting for 75% of total dollars invested in the half; a sharp increase from the four mega-deals in H12020. H12021 saw the largest funding round on record, with Toronto-based Fintech company Wealthsimple closing CAD $750M in growth funding in May. The average deal size in H12021 was CAD $21M, an all-time high.
Picking up Speed: Digital Maturity in Canadian SMEs and Why Increasing it Matters
Thomas Goldsmith, Brookfield Institute for Innovation + Entrepreneurship
This report contextualizes the current state of digital maturity to help inform the rollout of future programs and feed into Canada’s long-term prosperity. This report was produced in partnership with the Toronto Regional Board of Trade, World Trade Centre Toronto, and the Scale-Up Institute Toronto, and sponsored by Xero. Digital maturity reflects the use of digital technologies by enterprises in all sectors, not just in technology-developing ones. It comprises the technological intensity of a business (the level of technology adoption and use across both internal and customer-facing operations and processes), and its digital culture (whether it has the skills, leadership, and governance in place to successfully integrate digital technologies).
Innovation Policy
Mission-oriented policies and the “Entrepreneurial State” at work: An agent-based exploration
Giovanni Dosi, Francesco Lamperti, Mariana Mazzucato, Mauro Napoletano & Andrea Roventini, UCL Institute for Innovation and Public Purpose
This working paper studies the impact of alternative innovation policies on the short- and long-run performance of the economy, as well as on public finances, extending the Schumpeter meeting Keynes agent-based model (Dosi et al., 2010). In particular, the authors consider market-based innovation policies such as R&D subsidies to firms, tax discount on investment, and direct policies akin to the “Entrepreneurial State” (Mazzucato, 2013), involving the creation of public research-oriented firms diffusing technologies along specific trajectories, and funding a Public Research Lab conducting basic research to achieve radical innovations that enlarge the technological opportunities of the economy. Simulation results show that all policies improve productivity and GDP growth, but the best outcomes are achieved by active discretionary State policies, which are also able to crowd in private investment and have positive hysteresis effects on growth dynamics. For the same size of public resources allocated to market-based interventions, “Mission” innovation policies deliver significantly better aggregate performance if the government is patient enough and willing to bear the intrinsic risks related to innovative activities.
Congress needs to prioritize inclusion in our slumping innovation system
Mark Muro, Andre M. Perry, Yang You, Max Niles, and Robert Maxim, Brookings Institute
This post summarizes statistics on the lack of inclusiveness of the United States’ innovation system and asserts the need for additional policy proposals to address the issue. The post notes that while the Biden administration has prioritized inclusion in other policy domains, “the nation needs a big push to prioritize the inclusive innovation agenda in Congress’ critical spending bills; namely, the Democrats’ $3.5 trillion “reconciliation” package.”
Policy Digest
Space technology transfers and their commercialisation
Mattia Olivari, Claire Jolly and Marit Undseth, OECD
This paper examines space technology transfers and their commercialization, focusing on transfers from publicly funded space programs to different sectors of the economy. It notably compares practices from Europe, North America and Asia for the first time. It identifies the conditions for enabling successful space technology transfers, as well as the most common channels for commercialization. The paper also reviews methodological issues in measuring and assessing the benefits of transfers, and provides recommendations to develop improved and internationally comparable evidence. The analysis benefits from original content and endorsement from some of the most active space agencies in OECD countries and beyond.
Defining space technology transfers: The authors define space technological transfers and commercialization (TTCs) as “the movement of know–how, skills, technical knowledge, procedures, methods, expertise or technologies from one public research organization (e.g. space agency, space research centre) to another organization (e.g. a firm), generating value and economic development outside the space sector.”
The authors summarize several channels for the transfer of technologies produced by public space research organizations:
- Collaborative research through participation by e.g. academia or private firms in government–led programs and projects (with different funding arrangements, often including some degree of firm co–investment);
- Commercialization of government intellectual property, typically through the licensing of patents or firm creation;
- Other channels, including labour mobility, scientific publications, facility sharing, conferences, etc.
Measuring trends in TTCs and assessing their benefits is complex. Some of the main challenges hindering evaluation and assessment efforts include:
- Time lags between the initial investment and the realized outcomes.
- Limited institutional memory of firms, in particular in small– and medium–sized enterprises (SMEs).
- A predominance of self–reported outcomes, typically via ad–hoc surveys, which means data are not always reliable – organizations may make mistakes or inflate results.
- Problems of causality and quantification, particularly in terms of the attribution of observed economic results to specific programs, projects or even government space funding.
Policy frameworks to promote technology transfers build on regulatory, financial and “soft” instruments:
- Regulatory instruments: definition of intellectual property rights arrangements and adoption of patenting and licensing strategies
- Financial instruments: provision of subsidies for innovation and R&D, public–private co–funding schemes, start–up programs, as well as funding of infrastructures.
- “Soft” instruments: creating networking and training opportunities involving the private sector
Links to recent IPL webinars
Canada’s Quantum Internet: Prospects and Perils
This is a recording of the April 20, 2021 webinar that together experts to discuss the political, economic, and scientific implications of quantum communications, for Canada and the world .Speakers: Francesco Bova, Associate Professor, Rotman School of Management, University of Toronto; Anne Broadbent, Associate Professor, Department of Mathematics and Statistics, University of Ottawa; Jon Lindsay, Assistant Professor, Munk School of Global Affairs & Public Policy and Department of Political Science, University of Toronto; Christoph Simon, Professor and Associate Head, Research, Department of Physics and Astronomy, University of Calgary; & Dan Patterson (moderator), Technology Reporter, CBS News
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, Ryan Hubbard, Graeme Moffat, Moderator: Shiri Breznitz
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.
Events
October 18-20, 2021, Copenhagen, Denmark
Since 1996, DRUID has become 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 DRUID21, hosted by Copenhagen Business School. Presenting distinguished plenary speakers, a range of parallel paper sessions, and an attractive social program, 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. Please note that due to the global COVID-19 health crisis, DRUID21 is scheduled to take place in October, rather than its usual time in June. The conference will only take place if travel and health regulations permit.
Transformative Innovation Policy (TIP) Conference 2022
January 17-21, 2022, Digital Conference
The 2022 Transformative Innovation Policy (TIP) Conference is asking for a wide range of participants from across many disciplines and fields to submit ideas for panels, demonstrations, initiatives, and projects that work towards transformations for sustainability and a just transition. The ‘Call for Initiatives’ is open now until 4 September 2021 and encourage Expressions of Interest (EoI) from a wide set of contributors across research, civil society, business and policy. This is a short extension so please get your EOI in as soon as possible. The theme is “BUILDING A SUSTAINABLE KNOWLEDGE INFRASTRUCTURE ON TRANSFORMATIVE INNOVATION POLICY.” The aim of the sessions is to be a symphony of approaches and collaborations to mix-up the conference dynamic and offer a chance to experiment with building knowledge infrastructures and exchanges across sectors and disciplines to activate transformational system change to solve our Earth crisis. The TIP Conference 2022 is organised and funded by the Transformative Innovation Policy Consortium (TIPC) and the European Forum for Studies of Policies for Research and Innovation (Eu-SPRI) with the participation of Globelics and Africalics members and with the involvement of Sustainability Transitions Research Network (STRN) members.
6th Geography of Innovation Conference
January 26-28, 2022, Bocconi University, Milan
The conference brings together leading scholars on the spatial dimension of innovation processes. It is a forum for interdisciplinary research on this topics, including perspectives from economic geography, innovation economics, and regional science, as well as economics and management science, sociology and network theory, and political and planning sciences.
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe