The IPL newsletter: Volume 24, Issue 485

May 15, 2023

News from the IPL

EVENTS

Mobility Network presents ‘The Way Forward: Moving and housing multitudes in the Toronto region’

 May 16, 4-5PM Register on Eventbrite for this virtual event
This talk features IPL Affiliated Faculty Tara Vinodrai. Ontario is faced with a shortage of housing that needs to be met with dwellings of many types and affordability options. In 2022, for the first time in history, Canada's population increased by more than a million people, many of whom will decide to call our region home — and that’s only the beginning. The pressure will only grow. Where and how should we plan new housing to safeguard equitable access to opportunity?

MEDIA

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.

RESEARCH

Incubating Entrepreneurial Ecosystems: Regional Innovation Centres and Civic Capital in Ottawa, Toronto, and Waterloo

Alessandra Cicci, Darius Ornston, and Lisa Huh, IPL Working Paper 2023-01
A growing literature argues that entrepreneurial ecosystems benefit from intermediary organizations which increase civic capital or connectivity among entrepreneurs, risk capital, knowledge-bearing institutions, sophisticated customers, and complementary service providers. These intermediary organizations, however, are seldom subjected to comparative analysis. Focusing on three regional innovation centres in Waterloo (Communitech), Toronto (MaRS), and Ottawa (OCRI, now Invest Ottawa), we find that all three organizations fostered greater connectivity within their communities, but that they did so in very different ways. Distinguishing among entrepreneur-led “community creators,” institution-led “buzz builders,” and anchor-led “cluster organizers,” we demonstrate how institutional origins and organizational design shape their programming choices and, by extension, the structure of civic capital. While the differences among Communitech, MaRS, and Invest Ottawa have narrowed over time, this analysis suggests that organizations seeking to improve connectivity in immature, entrepreneurial ecosystems face important tradeoffs.

Promoting Inclusive Innovation for People With Disabilities: Who Does What and Why?

Dan Breznitz & Amos Zehavi, Disability and Society
Disability policy is often characterized as comprising three different components: citizenship rights, labor market integration and social protection. In this study, we present a fourth component – disability-related innovation. Specifically we analyze two critical interrelated questions: what governments do to guide innovation in this area; and do patterns of greater government disability policy involvement in social-democratic welfare states apply in the case of innovation? Utilizing a qualitative comparison of Germany, Israel, Sweden and the United States, we find that while policy across all countries is at first glance decisively similar, the important differences that exist cannot be satisfactorily explained within the classical welfare state typology framework. Countries that are leaders in terms of social support for disabled people – Germany and Sweden – are not necessarily leaders in disability-related innovation. This is particularly noticeable in the case of programs for support of Assistive Technology development.

Mending the Net: Public Strategies for the Remediation of Network Failures

Steven Samford & Dan Breznitz, Social Forces
Market and hierarchical/organizational failures have long been the target of public policies explicitly aimed to mitigate their negative effects. However, in spite of a growing interest in policies around industrial clusters and business networks, scholarship on public efforts at remediating network failures has been ad hoc and lacking a binding theory. A central question is what strategies public agencies employ to repair network failures. We begin to answer this question by distinguishing between two distinct approaches: (1) “network construction” in which government agents actively build, re-shape, or thicken the structures of private sector networks; and (2) “network activation” in which government agents seek to alter the internal dynamics of existing private sector networks. To provide empirical support for these concepts, we provide a series of short international examples to illustrate the scope of network remediation activities as well as two in-depth cases that demonstrate how these mechanisms can work: the Canadian Industrial Research Assistance Program (IRAP) and the specialized Mexican Lead Substitution Program.

 

 

 

Editor's Pick

Remarks by National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings Institution

The White House
This recent speech by US National Security Advisor Jake Sullivan at the Brookings Institution summarizes contemporary US international economic policy. The speech focuses on "President Biden’s core commitment...to more deeply integrate domestic policy and foreign policy." A central pillar of this new approach "is pursuing a modern industrial and innovation strategy—both at home and with partners around the world...that invests in the sources of our own economic and technological strength, that promotes diversified and resilient global supply chains, that sets high standards for everything from labor and the environment to trusted technology and good governance, and that deploys capital to deliver on public goods like climate and health." Also see this Brookings Institution summary of expert reaction to the speech.

Cities & Regions

Catapulting Firms into the Innovation System: Analysing Local Knowledge Spillovers from Catapult Centres

Enterprise Research Centre
Previous studies have provided evidence of the positive effects on business growth of working with the Catapults. This report explores the local spillovers from Catapult centres, i.e. the effects on businesses not themselves working directly with the Catapults. It investigates how through the Catapults knowledge spills over through space and along the supply chain to unsupported firms located nearby the centres and industrially related to the Catapults technological specialisation. It also assesses to what extent Catapults-supported firms generate local spillovers themselves for other unsupported local firms. In particular, it attempts to identify if there are demonstration effects or other types of knowledge spillovers from Catapult-supported firms to other local businesses operating in related sectors.

The role of state agency in path development: a longitudinal study of two Norwegian manufacturing regions

Markus Steen, Henrik Brynthe Lund & Asbjørn Karlsen, Regional Studies
The role of the state remains underdeveloped in the regional path development literature. This paper analyses how the Norwegian state via different roles (regulator, purchaser, owner, facilitator) directly and indirectly has enabled and influenced path development in two defence-related high-tech manufacturing regions in Norway since the end of the Second World War, notably by contributing to the modification of localised assets and the strategic coupling of those assets to extra-regional defence-related and civilian markets.

Statistics

Research and development in Canadian industry: Flash estimates

Statistics Canada
Advanced estimates of industrial R&D spending in 2021 and anticipated spending in 2022 and 2023 are being provided prior to the full suite of business R&D statistics, which will be released in summer 2023. Early results indicated that industrial R&D in-house expenditures increased from the revised 2020 estimate of $23.7 billion to $24.7 billion in 2021. Looking ahead, expenditures are expected to increase slightly to $24.9 billion in 2022 and to $26.0 billion in 2023.

Fabien Mercier and Luciano Giua, OECD
This report analyses subsidies provided to steel producers by examining firm-level data from the Organisation for Economic Co-operation and Development (OECD) and conducting desk research. It reveals that subsidy trends persist even in the face of existing overcapacity. Between 2008 and 2020, steel companies in partner economies obtained an average of 10.7 times more subsidies per crude steel production capacity unit than their counterparts in OECD countries. These subsidies took the form of cash grants, cash awards, and cost reimbursements. The report also finds that the national context significantly influences a jurisdiction's inclination to support its steel sector and the transparency of such subsidies. Some jurisdictions have prioritised the growth of their domestic steel industry by establishing firm goals for crude steel production, export, or concentration. Meanwhile, others have engaged in international collaboration to address global challenges related to the decarbonisation of the steel industry.

 

Innovation Policy

Australia Department of Climate Change, Energy, the Environment and Water
Under the National Hydrogen Strategy (the Strategy), the Australian Government committed to undertake an annual review of Australia’s clean hydrogen industry development performance and publish an annual State of Hydrogen report with the 2022 report released in April 2023. The report covers: Australia’s pathway for a clean hydrogen future; the development of Australia’s hydrogen industry so far, and how it compares to the rest of the world; what governments around Australia are doing to advance the industry; & the path ahead for the hydrogen industry in Australia.

The "Made-in-Canada Plan" Thinking Through Canadian Industrial Policy

Bentley Allan, Derek Eaton, Bruno Arcand, Anik Islam & Travis Southin, Centre for Net-Zero Industrial Policy
Budget 2023's Made-in-Canada Plan is a clear statement that the Canadian government aims to make its industrial policy more strategic and focused. In the latest briefing, the authors outline where more work is required to ensure success and how the new Centre for Net-Zero Industrial Policy will contribute by convening, catalyzing and mobilizing research and action to support government, business and other stakeholders.

Budget 2023: Innovation and tech measures in a 10-minute update

James Riley, InnovationAus
This post summarizes the measures related to innovation and technology in Australia's 2023 Budget, the centrepiece of which was a $392 million Industry Growth Program aimed at building a pipeline of Australian businesses that are investment-ready for its flagship $15 billion National Reconstruction Fund. InnovationAus.com had four reporters in the Budget lock-up to cover new initiatives and re-purposed funding, covering everything from quantum technologies to artificial intelligence to this government’s focus on extracting maximum value for the opportunities presented by the global transition to renewable energy.

U.S. Government National Standards Strategy for Critical and Emerging Technology

National Institute of Standards and Technology
Standards are essential to commerce, allowing technology to work seamlessly and business to operate smoothly. They provide industries and innovators with a common language that facilitates trade, simplifies transactions, and enables people to work together toward greater common goals that cut across disciplines and borders. The U.S. Government will strengthen its support for standards development in order to promote standards that are technologically sound and help American industry compete on a level playing field.

 

Policy Digest

National Quantum Strategy

Australia Department of Industry, Science and Resources
The National Quantum Strategy is the Australian Government’s plan to grow the quantum industry in Australia. The strategy draws on consultations with the quantum sector in 2022 to set out a long-term vision for how Australia will take advantage of the opportunities of quantum technologies.

The National Quantum Strategy has 5 central themes, each with a set of actions over 7 years. The executive summary details these as follows:

Theme 1: Thriving research and development, investment in and use of quantum technologies

The Australian Government will:

  • invest in, connect and grow Australia’s quantum ecosystem so we continue to compete with the world’s best

  • incentivise the growth of quantum technologies helping to address national challenges

  • catalyse private and public investment in industry-ready quantum technologies.

Action 1.1 Design new programs to incentivise the continued growth of quantum use cases in sensing, communications, and computing. The goal of these programs should be to fast-track projects using quantum and other advanced technologies to solve significant national challenges.

Action 1.2 Support initiatives to drive ecosystem growth, support commercialisation and enhance domestic and international links with strategic partners. The government will seek out and support initiatives involving consortiums of universities, quantum companies and industry translating quantum research into commercial outcomes.

Action 1.3 Grow a pipeline of quantum companies and technologies for potential future investment through the $15 billion National Reconstruction Fund, with a minimum of $1 billion earmarked for investment in critical technologies.

Theme 2: Securing access to essential quantum infrastructure and materials

The Australian Government will:

  • ensure that Australia’s quantum infrastructure supporting research and development meets the needs of Australia’s quantum ecosystem, now and into the future

  • be bold and ambitious in supporting the growth of new quantum infrastructure, including building the world’s first error-corrected quantum computer in Australia.

Action 2.1  Conduct a national audit of quantum-related infrastructure enabling quantum research. The audit will identify capability gaps and areas for dedicated investment, including access to quantum computing capabilities.

Action 2.2   Actively monitor supply chain challenges and opportunities affecting Australia’s quantum industries and move to address these wherever possible.

Theme 3: A skilled and growing quantum workforce

The Australian Government will:

  • promote Australia as the world’s top destination for people studying, undertaking research in and working in quantum industries

  • cement Australia’s status as a high-value location for companies establishing their own quantum-related capabilities.

Action 3.1 Deliver the National Quantum Collaboration Initiative and quantum technology talent PhD scholarships, to lay the foundations for a nation-wide model for academic collaboration.

Action 3.2  Release a quantum workforce report, including modelling to identify workforce and educational needs for our quantum sector and adjacent industries. The report will include skills taxonomies for quantum professionals and other adjacent occupations.

Action 3.3 Integrate quantum science into programs growing STEM awareness in schools, universities and VET, in collaboration with federal, state and territory education bodies. This will strengthen pathways and promote uptake into quantum and adjacent careers and will include initiatives to lift the participation of women, Aboriginal and Torres Strait Islander people and other underrepresented groups.

Action 3.4 Explore measures to attract global quantum talent and position Australia as a top destination to build a thriving quantum career. This includes actively promoting Australia as a destination for professionals in quantum and adjacent industries, including through targeted incentives, skilled migration and talent attraction programs.

Theme 4: Standards and frameworks that support national interests

The Australian Government will:

  • be an active participant in global standards-setting bodies to promote the development of standards that support a thriving, accessible and safe quantum ecosystem

  • ensure Australia’s regulatory frameworks foster quantum-related research, support investment in quantum companies and support exports while protecting Australia’s national interests.

Action 4.1  Work across government to ensure that regulatory measures and frameworks are fit for purpose to maximise opportunities and manage risks while protecting Australia’s national interests.

Action 4.2  Explore options to strengthen collaboration and opportunity for industry with our established partners through existing arrangements and potential partnership arrangements, including AUKUS, the Quad, and other regional and special bilateral agreements. Identify and consider opportunities to grow Australia’s regional leadership through collaborative programs of research, science diplomacy and provisioning access to infrastructure.

Theme 5: A trusted, ethical and inclusive quantum ecosystem

The Australian Government will:

  • ensure that the growth of Australia’s quantum ecosystem supports economic prosperity while safeguarding national wellbeing

  • champion responsible innovation and the introduction of new standards and regulatory mechanisms where national wellbeing is at risk.

Action 5.1 Work with industry, academia and states and territories to develop principles to support the responsible and inclusive development and use of quantum technologies.

Action 5.2 Ensure that Australia is actively represented in international quantum standards-setting bodies. Continue to work with industry to boost participation in international quantum standards development.

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

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.

ICPP6 - TORONTO 2023

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