The IPL newsletter: Volume 24, Issue 489

August 15, 2023

News from the IPL

Why Is It So Hard for Scholars to Launch Startups?

Wired
IPL Affiliated Faculty Member Shiri Breznitz contributes to this article. This article summarizes how STEM scholars with startup dreams struggle to find support. A new type of professorship may be the solution. While existing support structures work reasonably well for faculty members dabbling in innovation, there is no long-term road map for more involved scholar-entrepreneurs, forcing many early-career scholars to eventually choose between one or the other.

RESEARCH

Cities, COVID-19, and counting

Tara Vinodrai & Shauna Brail, Big Data & Society
The COVID-19 pandemic had immediate and potentially long-lasting impacts on cities. Yet, the ability to assess, monitor, and analyze the wide-ranging effects of the pandemic has been stymied by data challenges. The pandemic elevated the need for, and reliance on, a wide range of data sources. The authors discuss four data challenges related to understanding the impact of the pandemic on cities. First, they explore how shifts in public policy and the decisions of private companies altered data collection priorities, availability, and reliability. Second, they discuss temporal dimensions, including the speed of data retrieval and frequency of data collection. Third, they identify the growing use of unexpected sources, which often feature a lack of rigor and consistency. Fourth, they explore the spatial scale of study and highlight questions about the interpretation of boundaries constituting the city. The authors use examples from the City of Toronto to ground their observations while also pointing to broader issues. They note that the tension between rapid, novel data and slow, consistent data continues to evolve and argue that a deeper appreciation and analysis of, and access to, myriad sources of data are necessary to understand the immediate and long-term impacts of COVID-19 on cities. Beyond the pandemic, the essay contributes to ongoing and emerging debates regarding the use of big data to understand the challenges facing cities and society.

Frontier workers and the seedbeds of inequality and prosperity

Dylan Shane Connor, Tom Kemeny, Michael Storper, Journal of Economic Geography
This article examines the role of work at the cutting of technological change—frontier work—as a driver of prosperity and spatial income inequality. Using new methods and data, the authors analyze the geography and incomes of frontier workers from 1880 to 2019. Initially, frontier work is concentrated in a set of ‘seedbed’ locations, contributing to rising spatial inequality through powerful localized wage premiums. As technologies mature, the economic distinctiveness of frontier work diminishes, as ultimately happened to cities like Manchester and Detroit. This work uncovers a plausible general origin story of the unfolding of spatial income inequality. View the ungated preprint here.

Too much support? Entrepreneurial ecosystems and firm growth

Qiantao Zhang, Shiri M. Breznitz & Steven Denney,The Journal of Technology Transfer
Although the concept of an entrepreneurial ecosystem has become appealing to both academics and policy makers, few studies have measured the impact of entrepreneurial ecosystems on firm growth. Using quantitative data, this paper analyzes a local innovation ecosystem to identify the contribution of a regional ecosystem to firm growth. The results indicate that firms that intensively rely on ecosystem intermediary organizations tend to experience less growth. In other words, when it comes to supporting firm growth, ‘the more the merrier’ does not apply.

Rebuilding Public Housing in Regent Park: The Shifting Dynamics of Financialized Redevelopment Models

Shauna Brail, Journal of Planning Education and Research
This article examines the redevelopment of Toronto’s Regent Park, a neighborhood formerly comprised exclusively of public housing. Since 2006, it has been undergoing a transformation into a mixed income neighborhood. Through interviews and document analysis, the paper traces the complex and changing development agreements as redevelopment progresses, highlighting the state’s entrepreneurial efforts and the dynamic nature of urban planning and policy. The authors find that practices of financializing public land are highly fluid, and that efforts to derive public value from public housing redevelopment are tied to shifting community expectations regarding the return of benefits to residents.

Editor's Pick

The New Economics of Industrial Policy

Réka Juhász, Nathan Lane, and Dani Rodrik
This article discusses the considerable literature that has developed in recent years providing rigorous evidence on how industrial policies work. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlational and marred by interpretational problems. On the whole, the recent crop of papers offers a more positive take on industrial policy. The authors review the standard rationales and critiques of industrial policy and provide a broad overview of new empirical approaches to measurement. They discuss how the recent literature, paying close atention to measurement, causal inference, and economic structure, is offering a nuanced and contextual understanding of the effects of industrial policy. The article re-evaluates the East Asian experience with industrial policy in light of recent results. Finally, the authors conclude by reviewing how industrial policy is being reshaped by a new understanding of governance, a richer set of policy instruments beyond subsidies, and the reality of de-industrialization.

Cities & Regions

The geography of Australia's digital industries

Commonwealth Scientific and Industrial Research Organisation (CSIRO)
Australia’s digital technology clusters have been mapped and analysed on a national scale for the first time in a report by CSIRO and the Tech Council of Australia. “The geography of Australia’s digital industries”, explores how the geographical concentration of innovation – like Silicon Valley in California – boosts growth and productivity. The report brings together rich data from across the nation for the first time to map and describe the range of digital technology clusters currently developing.

SSTI releases new data tool that summarizes investment activity by state and tech area

SSTI
SSTI has released a new data tool that defines investment activity, one indicator of the vibrancy of a region’s innovation economy, in each of 18 technology areas. Comprising two interactive visuals and a downloadable data file, this tool includes the number of investment-backed companies, investment deals, and amount of capital invested by state, year (2013-June 2023), and investment stage (e.g., seed, angel, venture) for technology verticals that were selected to align with many of the key technology areas defined in the CHIPS and Science Act and included in the U.S. Economic Development Administration (EDA) Tech Hubs program.

Statistics

The Missing Ingredient: Solving Canada’s Shortcomings in Growing Large Firms and Increasing Productivity

C.D. Howe Institute
Canada has been challenged at scaling companies and, in fact, has the lowest number of manufacturing companies with over 250 employees per one million in population in the 35 countries with employment data available from the OECD (OECD 2022). While some of this might reflect our comparative advantage traditionally being in resource extraction, this last place is puzzling given the economy’s good access to large sophisticated markets and its natural and human assets. To investigate further, this paper asks: How are Canada’s scaling companies performing in terms of size achieved, capital raised, and growth rates? This paper defines scaling companies as those acquiring external equity capital or capital that is convertible into equity in order to grow. Comparing similar companies, how do our scaling companies perform in comparison to US scaling companies? In order to scale effectively, companies need access to markets, capital, and personnel. Does Canada have enough of these resources to foster strong growth? This paper performs a detailed analysis across these dimensions, finding that the Canadian government focuses too much on programs related to research and innovation, and not enough on the lack of resources, experience, and talent for commercialization.

Analysis on Federal Business Innovation and Growth Support to Clean Technology, 2016 to 2020

Megan Carta and Francis Demers, Statistics Canada
This analysis provides a first-ever snapshot of the businesses performing clean technology activities that have been funded by the federal government through Business Innovation and Growth Support (BIGS) programs. In 2020, the BIGS database covered a total of 123 programs delivered by 18 federal departments, of which 15 were clean technology programs. Over the past five years, the BIGS database covered a total of 172 programs delivered by 19 departments. As well, BIGS programs have provided support to an average of 23,276 enterprises per year, while an average of 918 enterprises were supported by clean technology programs.

Industrial research and development, 2021 (actual), 2022 (preliminary) and 2023 (intentions)

Statistics Canada
According to the most recent release of the Gross domestic expenditures on R&D, Canada's business sector has consistently performed over half of the R&D activities since 2016. Total in-house R&D expenditures by the Canadian business sector have shown a consistent upward trend over a five-year period, rising from $18.7 billion in 2016 to $27.3 billion in 2021. This represents a compounded annual growth rate of approximately 7.9%. Preliminary data for 2022 show a projected expenditure of $28.2 billion, 3.3% above 2021. Intentions data for 2023 suggest a further growth of 2.5%. The rise in spending levels over the 2021-to-2023 period highlights the role that Canada's business sector plays in driving R&D in Canada.

Innovation Policy

Government of Canada Releases Vision to Build a Clean, Affordable and Reliable Electricity System to Power Canada Forward

Natural Resources Canada
This post discusses the recent release by the Honourable Jonathan Wilkinson, Canada’s Minister of Energy and Natural Resources, of Powering Canada Forward, the Government of Canada’s vision for transforming Canada’s electricity sector, to decarbonize our grids by 2035, keep our electricity systems reliable and ensure household energy costs are affordable. This project rivals any nation-building project in Canada’s history. Powering Canada Forward underscores the critical importance of decarbonizing Canada’s electricity systems as a step toward achieving net-zero emissions across the economy by 2050 and ensuring a prosperous future for Canadians. To get there, the paper invites Canadians to join an important national conversation that will inform the development of Canada’s first Clean Electricity Strategy to be released in 2024.

Critical Minerals: Making the Most of Ontario’s Big Opportunity

Giancarlo Da-Ré, Ontario 360
This paper sets out the geopolitical and domestic context for Ontario’s recent Critical Minerals Strategy including the huge economic and environmental opportunities. It also outlines the key challenges to greater progress in critical minerals and sets out eight concrete recommendations to make the most of Ontario’s big critical minerals opportunity.

U.S. Department of Energy Releases 2023 Critical Materials Assessment to Evaluate Supply Chain Security for Clean Energy Technologies

U.S. Department of Energy
The U.S. Department of Energy (DOE) released its 2023 Critical Materials Assessment, which evaluated materials for their criticality to global clean energy technology supply chains. Based on the results of the Assessment, DOE has determined the 2023 DOE Critical Materials List of energy-specific critical and near-critical materials through 2035. In addition to informing crosscutting DOE priorities including the Critical Materials Research, Development, Demonstration, and Commercialization Application Program (RDD&CA), the DOE Critical Materials List will inform eligibility for tax credits under the Inflation Reduction Act 48C.

NSF Technology, Innovation, & Partnerships Directorate 3-year Roadmap -- public input requested

American Economic Association
The National Science Foundation (NSF) requests input from the full range of institutions and organizations across all sectors—industry, academia, non-profits, government, venture capital, and others—to inform the development of a roadmap for its newly-established Technology, Innovation, and Partnerships (TIP) Directorate, in accordance with the CHIPS and Science Act of 2022. This legislation tasks the TIP Directorate to develop a roadmap to guide investment decisions in use-inspired and translational research over a 3-year time frame, working towards the goal of advancing U.S. competitiveness in the identified key technology focus areas and addressing the identified societal, national, and geostrategic challenges.

NSF Regional Innovation Engines program selects 16 teams for the final round of competition

National Science Foundation
The U.S. National Science Foundation announced 16 finalists for the first-ever NSF Regional Innovation Engines (NSF Engines) competition, spanning a range of key technology areas and societal and economic challenges highlighted in the "CHIPS and Science Act." The NSF Engines will link up with local and regional partners to expand innovation across the nation and create collaborative and inclusive technology-driven innovation ecosystems. As with the announcement of the NSF Engines semifinalists earlier this summer, NSF is releasing the list of finalists to transparently encourage participation and teaming among diverse organizations to foster innovation and regional growth. View a map of the NSF Engines finalists on the NSF Engines website. NSF anticipates announcing the NSF Engines awards this winter, with each awardee initially receiving about $15 million for the first two years. Each NSF Engine could receive up to $160 million over 10 years; actual amounts will be subject to a given NSF Engine's status and overall progress, as assessed annually.

Policy Digest

Net zero business sector roadmap guidelines

UK Department for Energy Security and Net Zero
The UK's Net Zero Council, which brings together CEOs from leading companies including Co-op, HSBC, Siemens, NatWest and Cemex, has developed a new framework to help empower businesses to create tailored action plans to reduce emissions across their sector.

The guidelines, developed in partnership with the Broadway Initiative, will provide a robust, credible and consistent set of criteria for business sector roadmaps.The report outlines the following criteria that all sector roadmaps should meet to ensure they can effectively reduce emissions:

1. A credible pathway aligned to HMG’s Net Zero Strategy

Show emissions reduction pathways for scope 1, 2 and 3 emissions
Include other strategic enabling activities the sector must take as part of an economy-wide transition (with any reliance on carbon offsets set out transparently and compatible with relevant net zero strategy assumptions for the sector)
Provide real-world deployment figures mapping to emissions pathways
Identify supporting government policies
Identify energy demand across the sector and sector level of readiness
Show dependencies with other sector pathways and wider net zero roadmaps

2. Robust delivery plan and structures

Set out a clear delivery plan including actions required to deliver on the pathways
Have the commitment of a high proportion of businesses in the sector
Be supported by the capacity and capability to facilitate delivery
Monitor and account for delivery, including mechanisms to correct course where needed
Commit to annual public reporting on progress with defined KPIs for all decarbonisation actions
Identify behavioural as well as technology changes that are needed to adopt a holistic approach to delivery
Consider SMEs in delivery

Enablers for collaboration

3. Collaboration on barriers, gaps and dependencies, including:

Regular identification of barriers and gaps, including finance challenges
Mechanism to overcome barriers and gaps, currently the Net Zero Council
Mechanism to identify dependencies and ensure they are robust and well sequenced, using the cross economy roadmap tool

4. Independent assessment of roadmaps to ensure credibility

Sectors report on how they have met the criteria in 1 and 2
Objective assessment of roadmaps against criteria, including of the pathway and delivery plan

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.

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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe