News from the IPL
RESEARCH
Dan Munro & Creig Lamb, Shift Insights
Despite the importance of employer-sponsored training, little is currently known about how much Canadian employers invest in training, what kinds of training they offer, how it is delivered, what impacts it has, or how investment and opportunities differ across sectors, regions, and employee characteristics. Canadian data on the levels, kinds, trends, and impacts of employer-sponsored training are largely unreliable, out of date, and/or ill-suited for comparison across time and jurisdictions. Developing even a rough picture of the employer-sponsored training ecosystem in Canada is difficult. This report draws on available literature and data to develop the best possible picture of employer-sponsored training levels and trends; types and modes of delivery; what motivates and hinders training investment; and how investment is distributed across sectors, types of firms, and learners.
MEDIA
Dan Breznitz on innovation lessons from around the world
In this episode of the Unlikely Innovators podcast, hosts Mike Commito and Steve Gravel welcomed Dan Breznitz, Co-Director of the Innovation Policy Lab and Munk Chair of Innovation Studies at the University of Toronto for a chat at Cambrian. Dan talked about why Canada should look beyond the Silicon Valley approach, what the Canada Innovation Corporation means for businesses looking to develop new technologies in our country, and some of the lessons from his latest book, Innovation in Real Places.
Dan Breznitz unmuzzled: Canada Innovation Corporation architect explains how we got here
BetaKit
In this podcast, IPL Co-Director Dan Breznitz discusses the recently announced Canada Innovation Corporation—now a $2.6 billion program over four years, with $1.3 billion going to absorb IRAP. The discussion touches on what the CIC is missing, who might make a good CEO, and why the Crown corp. comes with carrots and sticks.
Editor's Pick
Australian Strategic Policy Institute
The Critical Technology Tracker is a large project that spans this report and a website.The Authors encourage readers of the report to explore https://techtracker.aspi.org.au/ as the website contains an enormous amount of original data and analysis. The authors have also created a range of visual snapshots including one that outlines the lead country and technology monopoly risk and another that shows the top 5 country rankings across 44 critical technologies.
Cities & Regions
SSTI
This post by SSTI summarizes the recent report by the U.S. Congressional Research Service (CRS), Regional Innovation: Federal Programs and Issues for Consideration. The report provides a summary of federal programs supporting regional innovation systems (RIS), including programs of the CHIPS and Science Act. As described in the report, federal support of RIS is a place-based approach to economic development, with a goal of encouraging development of innovation ecosystems across the country, especially in regions that have benefitted less than others from the rise of the technology-based economy. The report also addresses the scale, scope and duration of the federal investments, asking Congress to consider whether funding periods for the programs are adequate to achieve RIS goals and “how best to sustain regional innovation efforts after federal funding ceases.”
Statistics
OECD Main Science and Technology Indicators
OECD
In 2021, Research and Experimental Development (R&D) expenditures in the OECD area resumed their growth trajectory prior to the COVID-19 crisis. According to the latest data published in the OECD Main Science and Technology Indicators (MSTI) on 31 March 2023, drawing on the OECD R&D statistics database compiled with contributions from OECD members and other selected economies, R&D expenditure in the OECD area grew in 2021 by 4.7% in inflation adjusted terms, marking a return to pre-COVID crisis trends after it had slowed down to 2% growth in 2020.R&D in the business sector resumed in 2021 its role as main driver of R&D growth, while R&D in government and higher education institutions came to a virtual standstill. Download the statistical brief with highlights from the latest MSTI data (March 2023). The next update is due in September 2023.
New data tool shows distribution of businesses, employment in high-tech sector
Jonathan Dillon, SSTI
This post summarizes the U.S. Census Bureau's February release of a new experimental data product designed to better measure the business dynamics of innovative firms (BDS-IF). The new Business Dynamics Statistics of U.S. High Tech Industries provides measures of business dynamics for what the Census classifies as high-tech and non-high-tech industries, defined by science, technology, engineering and math (STEM) occupation intensity. A Census analysis on the data reveals that high-tech industries are concentrated in five coastal metro areas.
How does late-career entrepreneurship relate to innovation?
Martin Murmann, Virva Salmivaara, & Ewald Kibler, Research Policy
This paper presents an explorative study that develops our understanding of the relationship between late-career entrepreneurship and innovation-driven business activity. Based on observations of 2903 solo founders of new ventures in Germany in 2008–2017, the authors offer first and robust evidence that late-career entrepreneurs (~50 years and above) are more likely than younger founders to introduce product/service innovations that are ‘new to the market’. The author's explorations specifically reveal that older founders who draw on personal financial resources and combine their innovation orientation with prior managerial experience are most likely to generate the types of innovations that bring new products or services to the market. They conclude by discussing how our study's insights contribute to the research agenda on innovations in late-career entrepreneurship.
Antoine Dechezleprêtre, Luis Díaz, Milenko Fadic and Guy Lalanne, OECD
The automotive sector is important across OECD countries in terms of value-added and R&D, but is also heavily affected by the green and the digital transformations. This paper offers a novel and holistic view of the automotive sector and its surrounding ecosystem based on a combination of Inter-Country Input-Output (ICIO) tables, patent data, mergers and acquisitions (M&A) transactions, cross-country micro-distributed data and firm-level balance sheet data. It identifies the boundaries of this industrial ecosystem including connected sectors (e.g. upstream and downstream) as well as knowledge and technology providers (e.g. universities or the digital industry). The paper documents emerging trends at the geographical and technological levels and provides a comprehensive assessment of the ecosystem’s changing microstructure, with a growing role of young and digital-intensive companies. Finally, it provides recommendations for effective public policies to support the automotive ecosystem, with a focus on innovation, competition and the growth of young firms.
Innovation Policy
Innovation, Science and Economic Development Canada (ISED)
This recently published 2023–24 Departmental Plan outlines how ISED will "continue working with the ISED Portfolio and other federal partners to position Canada as a global innovation leader by fostering competitive, sustainable and inclusive growth." The document outlines core responsibilities, planned results and resources, key risks, and corporate information.
UK publishes prospectus for opportunities beyond Horizon Europe
Department for Science, Innovation and Technology, UK Research and Innovation, and The Rt Hon Michelle Donelan MP
This post summarizes the UK Government's recent prospectus programme – titled ‘Pioneer’ – to protect and support UK research and innovation sector should association to the Horizon Europe scheme not prove possible. Should it be required, the alternative Pioneer programme would focus on 4 main themes to complement our existing R&D investments: Talent, End to End Innovation, Global Collaboration, and Investments in the R&D system.
In-depth Q&A: The UK’s ‘green day’ avalanche of climate and energy announcements
Carbon Brief
On March 31st, the UK government published an avalanche of climate and energy documents in a chaotic policy move dubbed “green day” by some within government – and “not green day” by others. By Carbon Brief’s count, the package includes 44 documents running to 2,840 pages. New measures to tackle UK emissions include the introduction of a zero-emission vehicle mandate, more funds for cutting pollution from industry and a new “green finance strategy”.
The Ecosystem: business schools unite across borders to address Europe’s scale-up gap
Ian Mundell, Science Business
This article summarizes the newly formed European Scaleup Institute (ESI), an alliance bring together six European business schools and one innovation agency to focus on the specific problem encountered in scaling-up and help companies plot a route from start-up to growth. Europe has a scale-up problem, with too many promising start-ups failing to grow and realise their full potential. EU policy has recently mobilised to address this gap, and other players are now responding by internationalising their efforts. Access to capital is the key requirement, but the newly formed European Scaleup Institute sees talent as essential to helping start-ups grow and mature.
Policy Digest
Mario Cervantes, Chiara Criscuolo, Antoine Dechezleprêtre and Dirk Pilat, OECD
The transition to climate neutrality requires cost reductions in existing clean technologies to enable rapid deployment on a large scale, as well as the development of emerging technologies such as green hydrogen. This policy paper argues that science, technology, innovation, and industrial (STI&I) policies focusing on developing and deploying low-carbon technologies are crucial to achieving carbon neutrality. It notes however that the current level of innovation is insufficient to meet the net-zero challenge due to a policy emphasis on deployment rather than research and development (R&D) support. The paper explores the rationale for more ambitious STI&I policies targeted at R&D for climate neutrality and provides policy recommendations for an effective innovation policy for net-zero, including its interaction with the broader climate policy package.
The authors summarize the report's policy recommendations as follows:
"1) Governments should consider re-balancing their Science, Technology, Innovation and Industrial (STI&I) policies, giving greater emphasis to the different stages of RD&D, particularly for technologies that are not mature yet. Support for early-stage deployment of clean technologies is necessary because of the existence of barriers and market failures at this stage (e.g., learning spillovers, second-mover advantages) and should continue, but additional efforts should primarily focus on RD&D. An increase in public R&D expenditures targeted at technologies that are still far from market, but necessary to reach carbon neutrality by 2050, is urgent. As the increase might need the research system to adapt and so might be gradual, a larger forward leap can only happen if low carbon RD&D becomes a clear priority in governments’ budgets. Such commitments should provide a long-term and stable perspective, like other climate policies. Post-COVID recovery programmes can help increase public R&D budgets, but such increases will need to be sustained in the long run, rather than be one-off increases.
2) Governments should continue to invest in scientific research, to help drive low carbon innovation and support climate policies more broadly. Science provides the evidence to inform governments and citizens about the potential impacts from climate change. Science also has an important advisory role to play and can help dispel misinformation that can erode public trust in science. It can also enable the public acceptance of low carbon technologies, and foster the participation of citizens in climate research,
3) Support to RD&D undertaken by business should primarily be direct, rather than horizontal. Climate neutrality will require innovation in breakthrough technologies, which cannot be incentivised through horizontal support (or deployment subsidies). R&D tax credits are unlikely to help for technologies that are far from market and require long development timelines. Technology neutrality – even between various low-carbon technologies – tends to favour technologies that are closest to market and with the shortest payback time and is therefore not neutral in practice.
4) Barriers to external funding should be reduced to help high-risk companies raise funds. Favourable tax schemes, low-interest or subsidised loans for young firms, and a greater mobilisation of government venture capital toward the green transition can help.
5) Strengthen collaboration in low-carbon innovation, both nationally and internationally. There is ample room for improvement in collaborative R&D, between firms, between firms and public research institutions and between countries, to capitalise on complementary skills and resources at the domestic and international levels. Strengthening international co-operation and technology transfer will be particularly important to accelerate the development and diffusion of low carbon technologies,
6) Embed low-carbon innovation policies in a broader package. Although innovation and industrial policies should play a greater role in carbon neutrality strategies, they are insufficient on their own and need to be part of broader packages of climate policies. Removal of fossil fuel subsidies and carbon pricing, in particular, are necessary to encourage the adoption of clean technologies that are closer to market and thus “redirect” innovation toward low-carbon activities. At the same time, by reducing the costs of low- carbon technologies, innovation policies can increase the responsiveness of emissions to carbon prices, especially if combined with regulations and standards.
7) The low-carbon transition will involve a massive structural transformation that will require the alignment of policy frameworks beyond innovation, industrial and climate policies. Competition and entrepreneurship policies play a critical role to encourage business dynamism, the creation of new innovative firms and the reallocation of resources toward the most resource-efficient firms. Education, skills and science policy are necessary to make sure that the transformation can rely on the right set of skills and research. An efficient and cost-effective shift to a low-carbon economy thus requires the engagement of many parts of government beyond those traditionally mobilised in the development of climate change policies. Developing such a package requires the development of mission-oriented strategies in countries committed to carbon neutrality."
Links to recent IPL webinars
Does Canada have an effective innovation policy?
March 16, 2023 |11:00AM - 12:00PM, Online via Zoom
Since 2000 Canada has witnessed a proliferation of Innovation Strategies, including the 2017 Innovation and Skills Plan. Yet our innovation performance continued to deteriorate throughout this period. The 2022 Federal Budget began with the admission, “Our third pillar for growth is a plan to tackle the Achilles’ heel of the Canadian economy: productivity and innovation.” What factors best explain Canada’s dismal innovation performance over the past two decades? Join us for an IPL webinar with two of the most insightful analysts of Canadian innovation policy.
Moderator: David A. Wolfe, Professor of Political Science and Co-Director, Innovation Policy Lab
Panelists:
Shirley Anne Scharf, Ph.D. Shirley Anne Scharf is Visiting Researcher with the CN-Paul M. Tellier Chair on Business and Public Policy, Graduate School of Public and International Affairs, University of Ottawa and has her Ph.D. in Public Administration, School of Political Studies at U of O. Her dissertation, “Canadian Innovation Policy: The Continuing Challenge” (2022) examines the key dimensions driving the gap between policy intent and impact, and the consequences for Canada’s innovation eco-system.
Travis Southin, Ph.D. Travis Southin is a postdoctoral fellow at Carleton University’s School of Public Policy and Administration working with the Transition Accelerator on net-zero industrial policy. He completed his PhD in Political Science from the University of Toronto in 2022. His dissertation, titled “Overcoming Barriers to Policy Change: The Politics of Canada’s Innovation Policy,” illuminates the political barriers constraining the Government of Canada’s ability to shift its innovation policy mix away from neutral/horizontal policy instruments towards more targeted innovation policy instruments.
Events
18-19 April 2023 / Ottawa, ON
The 22nd Annual Research Money conference will be taking a deep dive into innovation policy weeks after the federal budget comes down from Ottawa. Over the span of two days, keynotes and expert panels will examine Canada's innovation policy, the implications of federal budget 2023, the newly announced Canadian Innovation Corporation and how a focused industrial policy can improve Canada's productivity and innovation performance. This highly anticipated conference attracts 200+ leaders and practitioners from academia, government, industry, finance and the not-for-profit sector. Following the in-person conference, the R$ Webinar Series will continue the conversation from May to November 2023, exploring a range of topics related to the conference theme in a series of free webinars.
The Transition Accelerator, April 26, 2023 – Online- 11:00 a.m. – 12:30 p.m. ET
REGISTER NOWModerator: Bentley Allan, Research Director and Associate Professor, Transition Accelerator & Johns Hopkins University Speakers: Tilman Altenburg, Research Programme Head, German Institute for Development and Sustainability; Olga Mikheeva, Honorary Senior Research Fellow, University College London (UCL) Institute for Innovation and Public Purpose (IIPP)
The net-zero challenge is no longer just about emissions. The U.S.’s Inflation Reduction Act and the EU’s Green Deal Industrial Plan have made it clear that international net-zero ambitions are also a question of competitiveness. While Budget 2023 made substantial moves in the right direction, there’s more work to be done for Canada to develop and implement a strategic industrial policy of its own to move the needle on leveraging investment, creating good jobs, and building net-zero supply chains. But what does modern industrial policy look like? And how can we use it to reduce emissions and compete in a low-carbon world? Join us for a webinar with leading international experts where we’ll look to examples from around the globe to find the common principles and lessons learned that make for successful net-zero industrial policy.
Atlanta Conference on Science and Innovation Policy
May 24-26, 2023, Georgia Institute of Technology Global Learning Center, Atlanta
The Atlanta Conference on Science and Innovation Policy provides a showcase for the highest quality scholarship from around the world addressing the challenges and characteristics of science and innovation policy and processes.
June 27 to 29, 2023, Toronto
The 6th International Conference on Public Policy (ICPP6) is coming to Toronto! Organized by IPPA, ICPP6 is hosted by the Toronto Metropolitan University's Faculty of Arts and Public Policy graduate studies programs and will take place at the University's premises in downtown Toronto from June 27 to 29, 2023, with a Pre-Conference on June 26. This conference includes a panel chaired by IPL Co-director Dan Breznitz called "Organizational Evolution in Innovation Policy."
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe