News from the IPL
The large firm dilemma: anchor embeddedness and high-technology competition
Darius Ornston & Lorena Camargo, Socio-Economic Review
Do large firms support or suppress regional entrepreneurship? Comparing Ottawa and Waterloo, two entrepreneurial ecosystems dominated by large, flagship firms, Nortel and Research in Motion (RIM), we demonstrate how an anchor firm’s relationship to the entrepreneurial community shapes entrepreneurial activity. In Ottawa, an engaged anchor delivered the public goods to overcome the negative externalities associated with large firm growth. In the long run, however, this vibrant, startup scene proved surprisingly vulnerable to Nortel’s decline. In Waterloo, in contrast, new firm formation plummeted under a detached anchor. RIM’s isolation, however, enabled Waterloo to construct the independent, entrepreneurial infrastructure it needed to capitalize on its collapse. Illuminating the mechanisms behind ‘entrepreneurial recycling’, or the reallocation of labor from declining anchor firms, we argue that regions confront a strategic dilemma in how they engage large firms.
White Paper: Taking a Strategic Approach to Industrial Transition - A Vision for Canadian Net-Zero Industrial Strategy
Bentley Allan, Derek Eaton and James Meadowcroft, The Transition Accelerator
This white paper was written for Canada’s Net-Zero Industrial Strategy Summit, October 27, 2022, with the support of Smart Prosperity Institute, The Natural Step, The Transition Accelerator, and Ivey Foundation. The rise of green industrial policies across the world has made it imperative that Canada also develop its own low-carbon industrial strategy. Our major trading partners and competitors are moving fast and the global value chains of the 21st century are forming rapidly. Canada must act now, or risk being left behind. Canada needs a strategic approach to building the industries that will create value in the Canadian economy throughout the energy transition and beyond. Done well, a modern industrial policy can build a coalition to drive deep decarbonization while reducing the costs of new technologies and building geopolitically resilient supply chains. This white paper lays out a vision for a Canadian net-zero industrial strategy rooted in the principles of effective modern industrial policy.
Cities & Regions
Made with Bravery: the Story of Ukrainian Startup Resilience
Dan Herman, Jupiter Productions Inc
Filmed in September 2022 in Kyiv and Lviv, Ukraine. From coffee shops to bomb shelters. From work-life balance to work-war balance. "Made with Bravery: the Story of Ukrainian Startup Resilience" profiles how Ukraine’s startup ecosystem has reacted and adapted to life amidst over 200 days of full-scale Russian invasion, and how the lessons learned from war will help Ukraine scale to new heights in the world of innovation and technology.
The green-restructuring of clusters: investigating a biocluster's transition using a complex adaptive system model
Ram Kamath, Aitziber Elola & Frans Hermans, European Planning Studies
Bioclusters’ promise of helping achieving sustainable bioeconomies has invoked great interest among policymakers and academia. However, bioclusters are not intrinsically sustainable. If they are to fulfil their promise, bioclusters must undergo green-restructuring. While cluster-research has elaborated on green regional development, we need more clarity on how clusters transition to normatively desired states; we need more evidence of how green-restructuring unfolds. In this study, the authors conduct a longitudinal analysis to demonstrate how a biocluster green-restructures through the interactions of agency, regional and industrial structures, and phenomena at (supra-)national levels. To execute this analysis, they created a novel cluster-evolution framework that treats clusters, and the regional innovation system and sectoral systems of innovation that contain the cluster, as complex adaptive systems. They applied this framework to study the greening of the Basque pulp-and paper-biocluster, over four phases between 1986 and 2019. The analysis discovered patterns of agency, structural dynamics, and of agency-structure interactions and how supra-regional phenomena shaped structures and agency over the four phases. Based on the findings, they recommend policymakers encourage not only green-tech entrepreneurs, but also institutional-entrepreneurs and place-leaders who can help shape both (supra-)regional and industrial structures.
$2.8B announced for manufacturing EV batteries and grid
In a move to strengthen the domestic manufacturing of batteries for electric vehicles (EVs), the U.S. Department of Energy (DOE), announced $2.8 billion for 20 companies in 12 states to extract and process battery materials and manufacture components while creating good-paying jobs. The projects will be funded by the Bipartisan Infrastructure Law and will be matched by recipients to leverage more than $9 billion for the production of clean energy.
2020 BERD data shows an increase of over $45 billion in domestic R&D spending
Conor Gowder, SSTI
This post summarizes new Business Enterprise Research and Development Survey (BERD) data revealing that US domestic research and development (R&D) spending, although slowing, is still on an uptrend. From 2018 to 2019, business R&D spending increased by 11.8% (from approximately $441 billion to $492 billion), with new data showing a further increase of 9.1% from 2019 to 2020 ($492 billion to $538 billion).
BDC doubles down on cleantech investment, launches new $400M Climate Tech Fund II
BDC, the bank for Canadian entrepreneurs, today announced its new $400M Climate Tech Fund II, a renewed commitment to play a leadership role in creating world-class Canadian cleantech champions. The new envelope brings the Fund’s committed investments in the innovative cleantech/climate tech sector to $1 billion.
Canada's auto, steel and manufacturing sectors sound alarm over U.S. inflation act
Meghan Potkins, Financial Post
This report summarizes the testimony of representatives from the Canadian automotive, steel and manufacturing sectors to a House of Commons trade committee on the need for Canada to respond to the U.S. Inflation Reduction Act. The witnesses noted how the IRA will pour billions into the American manufacturing sector over the next few years and could trigger a flight of investment capital south of the border: 'The U.S. has turned on a shop vac to suck up incentive and we're standing here with a dust buster.' See the latest video and materials from the Nov. 1st and 15th CII committee meetings here.
Responding to the Inflation Reduction Act: What are Canada’s options?
Marisa Beck, Canadian Climate Institute
The U.S. Inflation Reduction Act has reshaped the global climate policy landscape, pressuring governments to consider the implications for their own climate policies and their economic competitiveness in a low-carbon world. The Act represents the most extensive investment in climate solutions in U.S. history. It includes a wide range of tax credits, grants, and loans for clean technologies, totalling US$370 billion over 10 years to accelerate the nation’s energy transition. This post summarizes three options to ensure Canada doesn’t get left behind in the wake of the Inflation Reduction Act
Technical Backgrounder: Canada Growth Fund
Department of Finance Canada
Budget 2022 announced the government’s intention to create the Canada Growth Fund (CGF)— to be capitalized with $15 billion—and committed to provide details about its launch in the fall economic update. This technical backgrounder sets out the details that are proposed to govern CGF, including its implementation, mandate, operations, financial instruments, investment approaches, performance metrics, and transparency and accountability frameworks.
The Next Green Revolution: How Canada can produce more food and fewer emissions
RBC Economics and Thought Leadership
This report is a collaboration between RBC, BCG Centre for Canada’s Future, and Arrell Food Institute at the University of Guelph. The report aims “to help inform and inspire Canadians to see both the urgent need and growing opportunity that will come with more sustainable food systems.”
Canada’s agriculture and food systems produce 93 megatonnes or just over 10% of our national greenhouse gas emissions annually. Key technologies and approaches that can cut emissions include carbon capture, utilization and st006Frage, feed additives, anaerobic digesters, and precision technology. Nature-based solutions that sequester carbon will also be critical. Soil carbon has the potential to be one of our most powerful tools, raising the amount of carbon stored in soil to as much as 35MT. By engaging these technological and management solutions, and mobilizing finance and policy to support farmers, Canada can cut up to 40% of potential 2050 emissions.
A national effort, tailored to regional contexts and focused on the key pillars of technology, finance, skills and public policy, will be essential to increasing our production while also cutting emissions. The report outlines the following elements of such a plan:
- Lead efforts to create global alignment on a low-emissions food standard. Roughly 61% of our agricultural emissions are tied to goods that are ultimately exported. Advancing an emissions reduction strategy that’s misaligned with our key export markets could create friction in our trading relationships. We need to align trading partners around a common set of goals, indicators and GHG measurement, reporting and verification protocols.
- Integrate agricultural strategies with energy strategies. Farmers are increasingly embracing opportunities to generate renewable natural gas from their operations. Integrating these efforts with a national energy strategy could help accelerate the deployment of clean energy both on and off the farm.
- Create a central funding body for research and development, operating in close partnership with academia and the private sector. A more centralized system such as in the United States Department of Agriculture, could develop a more holistic, nationwide view of where support and innovation is needed.
- Focus on technologies that hold the most promise to cut emissions. As we target funding to technology that accelerates productivity, we need to also attract more investment to technologies that cut emissions from key drivers in the supply chain—innovations like anaerobic digesters, feed additives and CCUS.
- Create innovative tax and financial incentives to spur more private investment. Expanding accelerated depreciation beyond tangible assets to include artificial intelligence and other agtechs is one possibility.
- A national standard for measuring the impact of emissions-cutting activities, including a mechanism for measuring, reporting and verifying (MRV) carbon stored in soils, could be critical to compensating farmers and to empowering policymakers and financial institutions to mobilize support. - Share the risk by Insuring against yield losses for farmers who adopt sustainable practices. There is no incentive for sustainable agriculture under crop insurance schemes though these practices are proven to reduce the impact of flooding and drought. Crop insurers should be willing to adjust premiums to reflect these shifting risks.
- Leverage the Labour Market Information Council to pinpoint the skills farmers need to shift toward a more resilient food system.
- Broaden the talent pool. Educating students on the opportunities in agriculture—through co-ops, outreach and liaison programs—will be critical to bringing their talents to the challenge.
Links to recent IPL webinars
The Politics of Decarbonization
Munk School of Global Affairs & Public Policy
The transition to a post-carbon energy and economic paradigm is a stated priority for all the signatories to the Paris Accord, including Canada. Success in achieving this objective will depend on a complex mix of policy experimentation and coalition building in support of that objective, cutting across virtually every sector of the economy. This panel will explore some of the dimensions of that process and the prospects for success in achieving that objective.
Moderator: David A. Wolfe is Professor of Political Science at the University of Toronto Mississauga and Co-Director of the Innovation Policy Lab at the Munk School of Global Affairs and Public Policy.
Brendan Haley is Policy Research Director at Efficiency Canada, a research and advocacy organization based at Carleton University. He has a PhD in Public Policy from Carleton University and was awarded a Banting postdoctoral fellowship where his work examined Canadian energy transitions from political economy and technological innovation perspectives.
Sara Hastings-Simon is macro energy system researcher and Assistant Professor in the Department of Physics and Astronomy and School of Public Policy at the University of Calgary where she directs the Masters of Science in Sustainable Energy Development.
Nathan Lemphers is an Adjunct Professor in the Department of Political Science at the University of Waterloo and former Postdoctoral Fellow at the Smart Prosperity Institute where he researched the regional political economy of electric vehicles. Sponsored by the Innovation Policy Lab at the Munk School of Global Affairs & Public Policy
National Governments & Innovation Policy: Where – and What – Is Utopia?
This is a recording of a January 10 panel focused on national governments and Innovation policy. Canada, the Nordics, Taiwan? In this webinar, panelists examined the diverse roles played by national governments in setting the stage for innovation, as well as the key elements that ought to be considered in formulation of innovation policy in Canada and elsewhere.
Susana Borras, Professor, Department of Organization, Copenhagen Business School, Copenhagen Denmark
Dan Breznitz, University Professor and Munk Chair of Innovation Studies; Co-Director, Innovation Policy Lab, Munk School; Clifford Clark Visiting Economist, Department of Finance, Government of Canada
Darius Ornston, Associate Professor, Munk School
Joseph Wong, Vice-President, International, University of Toronto; Roz and Ralph Halbert Professor of Innovation, Munk School; Professor, Department of Political Science
Rana Foroohar, Global Business Columnist and Associate Editor, Financial Times, and Global Economic Analyst, CNN
From Science to Entrepreneurship
This is a recording of the Nov. 15th, 2021 webinar. There is a plethora of research on university commercialization and technology transfer. However, there is less of a discussion on the skillset and technical capabilities that allow a scientist to become an entrepreneur. In this webinar we will focus on these skills and programs that induce entrepreneurship. Moving from the scientist’s lab, to entrepreneurship courses, to forming a startup, to growing the firm within an incubator or accelerator.
Fabiano Armellini, Associate Professor Department of Mathematics and Industrial Engineering, École Polytechnique de Montréal
Shiri M. Breznitz, Director, Master of Global Affairs Program; Associate Professor, Munk School of Global Affairs & Public Policy, University of Toronto
Elicia Maine, W.J. VanDusen Professor of Innovation & Entrepreneurship; Academic Director, Invention to Innovation (i2I); Special Advisor on Innovation to the VPRI, Simon Fraser University
Sophie Veilleux, Professor, Department of Management of the Faculty of Business Administration at Université Laval
Sarah Lubik (moderator), Director of Entrepreneurship; Co-Champion, Technology Entrepreneurship@SFU Lecturer, Innovation & Entrepreneurship, Beedie School of Business, Simon Fraser University
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
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This newsletter is prepared by Travis Southin.
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