News from the IPL
IPL SPEAKER SERIES
Unveiling the Interplay Between Digital Technologies and Skills
October 12, 2023 | 4:00PM - 6:00PM, Seminar Room 108N, Munk School of Global Affairs & Public Policy, 1 Devonshire Place, Toronto, ON
Mabel Sánchez Barrioluengo, Senior Lecturer, Science Policy and Innovation, Alliance Manchester Business School; Deputy Director, Manchester Institute of Innovation Research.
Advanced digital technologies (DTs), such as Artificial Intelligence (AI), Big Data, Cloud Computing, 3D Printing/Additive Manufacturing, Internet of Things (IoT) and Robotics, are changing the process to develop, produce and deliver products, processes and services.However, readiness for technological development and adoption of DTs remains a critical factor and, specifically, internal capabilities and changes in the skills knowledge base have been recently identified as key elements for firms to be better prepared to access and adopt new DTs (Coro et al., 2021). Based on this framework, this work has two objectives. First, it investigates the development of DTs and skills as a co-evolutionary phenomenon focusing on the spatial distribution of Industry 4.0 in the UK. It contributes to the current literature on evolutionary economic geography by shedding light on the evolution of technological trajectories in regions as local repositories of competences and knowledge. Second, it moves into firm level analysis to analyse how pervasive is the adoption and use of advanced DTs and what are the dynamics of technology adoption and organizational skills required to adopt the most advanced technologies by firms. Using the distinctive case of Grater Manchester and a unique bespoke survey the study reveals patterns of firms’ adoption of DTs and skills; the underlying motivations and potential barriers towards digital transformation within individual firms; and it explores the influence of digitalisation on firms’ productivity.
November 30, 2023 | 4:30PM - 6:30PM, Boardroom at the Observatory, Munk School, 315 Bloor Street W. Toronto, ON
Christopher Esposito, Postdoctoral Fellow, Anderson School of Management, UCLA
Dr. Esposito develops a new framework to study the development and autonomy of national scientific enterprises. The method applies machine learning models to author information on 4.4 million scientific articles involving international collaboration to identify the project leaders (as opposed to the supporting actors) of each article. Aggregating leaders to their countries-of-residence allows the authors to determine the hierarchical position of power of each country in the global collaboration network. They use their framework to analyze recent changes in the hierarchical position of Chinese science. They begin by focusing on the hierarchical nature of collaborations between Chinese and U.S. scientists, and find that China substantially narrowed its gap behind the U.S. in scientific leadership between 1995 and 2021. Extending this trend, they predict that China will reach parity with the U.S. in terms of scientific leadership in 2033. Next, they show that China is achieving scientific leadership more quickly in other parts of the world. Delving into administrative documents, they uncover how China is extending the reach of its scientific enterprise beyond its territorial borders by investing in and training young scientists in regions that have been relatively neglected by Western science, particularly in Central Asia and Sub-Saharan Africa. As a consequence, China now enjoys a strong leadership position in collaborations with scientists from these regions, and engages scholars from these regions to produce research that advances China’s own strategic interests. They conclude that the narrowing of the China-U.S. leadership gap and the strong leadership position China has established in much of Asia and Africa indicate that China’s scientific enterprise is sophisticated and territorially distributed. As a consequence, policymakers in the U.S. and other Western countries have less leverage in affecting China’s scientific development than is commonly believed.
RESEARCH
Skye Collishaw, Markus Moos & Tara Vinodrai, Housing Policy Debate
Housing has become increasingly unaffordable, particularly in amenity-rich and transit-accessible areas. In this paper, the authors conduct an empirical analysis to investigate the relationship between living in subsidized housing and commuting patterns (mode and distance) in Toronto, Montreal, and Vancouver. The article finds that compared to otherwise similar individuals, those in subsidized dwellings have shorter and less auto-oriented commutes at statistically significant levels. The paper positions the discussion on subsidized housing in the broader context of the relationship between housing and sustainability, and within specific metropolitan geographies and histories of housing policies. In combination with prior research, the findings provide support for policies that promote investment in subsidized housing near transit as an affordability and sustainability strategy, particularly benefiting low-income renters.
Editor's Pick
The IRA and the US Battery Supply Chain: One Year On
Ahmed Mehdi & Tom Moerenhout, Center on Global Energy Policy at Columbia University, School of International and Public Affairs
It has now been just over a year since the US Congress signed into law the Inflation Reduction Act (IRA). Already, the IRA has been followed by more than US $110 billion in clean energy investments, with just over $70 billion earmarked for the US battery supply chain, particularly downstream cell projects (so-called gigafactories). This report describes the key supply and demand incentives offered by the bill, assesses the impact of IRA supply-side policies on US battery economics to date, and examines the demand-side provisions of the IRA, which include notable eligibility constraints on the origins of battery components and critical minerals. The commentary concludes that the IRA has already radically altered the US battery cost curve and ushered in a new chapter for the battery industry: a wave of mergers and acquisitions activity focused on Federal Transit Administration (FTA)–compliant jurisdictions (particularly for lithium). It also notes, however, that the availability of IRA-compliant minerals and the pace of US EV adoption will heavily depend on the contours of the upcoming Treasury Department definition of China as a Foreign Entity of Concern (FEOC).
Cities & Regions
Defense makes $238M CHIPS and Science Act awards for eight microelectronics regional innovation hubs
STTI
This post summarizes the U.S. Department of Defense's recent announcement that it issued $238 million from "Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act" funding for the establishment of eight Microelectronics Commons (Commons) regional innovation hubs. With $2 billion in funding for Fiscal Years 2023 through 2027, the Microelectronics Commons program aims to leverage these hubs to accelerate domestic hardware prototyping and "lab-to-fab" transition of semiconductor technologies. The hope is this will help mitigate supply chain risks and ultimately expedite access to the most cutting-edge microchips for U.S. troops.
Capabilities, institutions and regional economic development: a proposed synthesis
Koen Frenken, Frank Neffke, Alje van Dam, Cambridge Journal of Regions, Economy and Society
The capability framework in evolutionary economic geography views regional economic development as a process of related diversification through the acquisition of capabilities that render a regional economy more complex. Using this framework, the article synthesizes seven theoretical notions that hitherto remained rather disconnected: relatedness, complementarity, variety, complexity, diversification, agents of structural change and related variety. The authors formulate a constructive critique of the capability framework, relaxing the overly restrictive assumption that the presence of capabilities in a region is both necessary and sufficient for complex products to be produced in a region. Instead, they argue that the complexity of a regional economy depends primarily on the institutions that support firms to coordinate production in complex value chains within and across regions. The augmented framework allows for closer integration of evolutionary and relational approaches in economic geography, providing new links between the literature on clusters, innovation systems and global production networks.
Statistics
Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach
IEA
In May 2021, the IEA published its landmark report Net Zero Emissions by 2050: A Roadmap for the Global Energy Sector. The report set out a narrow but feasible pathway for the global energy sector to contribute to the Paris Agreement’s goal of limiting the rise in global temperatures to 1.5 °C above pre-industrial levels. The Net Zero Roadmap quickly became an important benchmark for policy makers, industry, the financial sector and civil society. This 2023 update to the Net Zero Roadmap surveys this complex and dynamic landscape and sets out an updated pathway to net zero by 2050, taking account of the key developments that have occurred since 2021. This report is part of the IEA’s support of the first global stocktake of the Paris Agreement, which will be finalized in the run up to COP28, the next UN Climate Change Conference, at the end of 2023.
Government of Canada
The SR&ED statistical tables provide key tax and accounting information as of December 31, 2022. The tables include select information from all T2 returns that were assessed or reassessed for corporations with tax years ending in years 2014 to 2020. These tables are to be released yearly.
Tracking US progress on the path to a decarbonized economy
MIT Office of the Vice President for Research
The Clean Investment Monitor (CIM), developed by a team at MIT’s Center for Energy and Environmental Policy Research (CEEPR) led by Institute Innovation Fellow Brian Deese and in collaboration with the Rhodium Group, an independent research firm, provides a timely and methodologically consistent tracking of all announced public and private investments in the manufacture and deployment of clean technologies and infrastructure in the U.S. The CIM offers a means of assessing the country’s progress in transitioning to a cleaner economy and reducing greenhouse gas emissions. In the year from July 1, 2022, to June 30, 2023, data from the CIM show, clean investments nationwide totaled $213 billion. To put that figure in perspective, 18 states in the U.S. have GDPs each lower than $213 billion.
Innovation Policy
Breakthrough Agenda Report 2023
IEA
The Breakthrough Agenda Report 2023 is an annual collaboration between the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA) and the United Nations Climate Change High-Level Champions, focused on supporting stronger international collaboration to drive faster reductions in global greenhouse gas emissions. This year’s report shows that current efforts on clean energy and sustainable solutions, while improving, are not yet delivering the levels of investment and deployment required to meet international climate goals. In response, it calls on governments to strengthen collaboration in key areas – such as standards and regulation, financial and technical assistance and market creation – to turbocharge the transition. This report is part of the IEA’s support of the first global stocktake of the Paris Agreement, which will be finalized in the run up to COP28, the next UN Climate Change Conference, at the end of 2023. Also see the video discussion of the report.
OECD
The "Miracle on the River Han" catapulted Korea from developing country to a prosperous economy, driven in part by advancements in science, technology, and innovation. Being the second-highest R&D spender among OECD economies, Korea excels in key technologies, including semiconductors, 6G, and ICT infrastructure. Despite this remarkable progress, disparities remain between SMEs and chaebols, manufacturing and services, ICT and non-ICT industries, and urban and rural areas. Korea also grapples with societal and economic vulnerabilities, including an aging population, a significant carbon footprint, limited renewable energy use, and pronounced gender inequality. To further seize opportunities for equitable and inclusive growth, Korea must foster a shared national vision to develop science, technology, and innovation to address societal issues, enhance R&D policy implementation, promote excellent research, further internationalise, and broaden technology diffusion.
Hydrogen and the Decarbonization of Steel Production in Canada: Reaching Economies of Scale
Mohd Adnan Khan, Michael Powell, Martin Tampier, Emily Thorn Corthay, David Layzell, The Transition Accelerator
Written in collaboration with the Canadian Steel Producers Association (CSPA), this report looks at the potential solution of using low-carbon hydrogen in processes like direct reduced iron (DRI), thoroughly examining the economic, technical, and logistical challenges this approach would involve. The report finds that hydrogen could pave the way for nearly emissions-free steel production—but only if the current and foreseeable obstacles are addressed, particularly regarding the costs associated with low-GHG hydrogen production and delivery. In addition to their analysis, the report’s authors propose a suite of recommendations, including reinvesting carbon pricing revenue into the steelmaking sector, developing a regional hydrogen strategy, and building a premium market for low-GHG steel. With planning, coordination, and the support of a broader hydrogen economy, hydrogen can play a major role in the steel industry’s shift toward a sustainable future.
Michael Bernstein, Dale Beugin & Nicholas Rivers, Canadian Climate Institute
Canadian climate policy wonks from industry to environmental organizations like the idea of Carbon Contracts for Difference (CCfD) as a means of de-risking climate investments — at least in principle. CCfDs can make carbon pricing work better. They can keep Canada competitive with the United States, even in the face of the Inflation Reduction Act. And, relative to a U.S.-style incentive approach, they can save governments money. Yet opinions regarding how, exactly, to implement CCfDs remain diverse.Canada’s federal government is currently considering how CCfDs could be used to bring certainty regarding the credit prices for output-based carbon pricing systems. This 3 part series explores the implementation of CCFDs in Canada.
Policy Digest
Innovative Solutions Canada: Annual Report 2021–22
Innovation, Science and Economic Development Canada
Innovative Solutions Canada (ISC) was launched in December 2017, with the objective of supporting Research & Development (R&D) from Canadian small and medium sized enterprises by leveraging Government of Canada procurement. This report highlights the activities and accomplishments of ISC between April 1, 2021, and March 31, 2022 (fiscal year 2021-22), and establishes priorities for the year ahead. ISC's total budget for innovation spending in 2021-22 was approximately $147.6M.
Program Streams:
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Challenge Stream – Through a phase-based approach, departments and agencies develop challenges based on their needs or market gaps and to support Canadian small and medium enterprises (SMEs) in developing and commercializing their early stage R&D. Participating federal departments and agencies must allocate to ISC activities the equivalent of 1% of their annual 2015-2016 intramural R&D and procurement spending.
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Phase One (Proof of Feasibility): Successful small business applicants receive up to $150,000 through either grants or contracts to develop the proof of concept of a solution in response to a public sector challenge. Those companies assessed to have effectively demonstrated proof of feasibility will be eligible to advance to Phase Two of the program.
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Phase Two (Prototype Development): Phase Two includes prototype development, small scale production and putting research into action through limited pre-commercial testing and deployment in a government setting. Small businesses that have been assessed to have successfully passed through Phase One receive up to $1M in the form of grants or contracts.
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Testing Stream – Innovative prototypes and later stage R&D of Canadian firms are purchased for testing by federal departments, agencies. Sometimes other publicly funded organizations (e.g. hospitals) can test protypes on behalf of federal departments and agencies.
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Pathway to commercialization - successful ISC companies that meet specific eligibility criteria may receive, without competition, contracts of up to $8M with any federal organization to support the very first buy of their technology or solution. The Pilot of the program was introduced in fiscal year 2021-22, which enables federal departments and agencies to purchase innovations, that have been successfully tested via the Testing Stream, on a commercial basis.
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The ISC Secretariat - oversees the program's day-to-day operations, a core function of which is to assist participating ISC departments and agencies in developing and launching challenges as well as testing late-stage prototypes.
To deliver the program, ISC works in close collaboration with its service delivery partners at Public Services and Procurement Canada (PSPC) and the National Research Council – Industrial Research Assistance Program (NRC-IRAP)and leverages their procurement and technical/ industrial expertise, respectively to support the review of departmental challenges, the business and technical evaluation of proposals, and the management and award of R&D procurement contracts.
Program Activities:
In 2021-22, ISC's Challenge Stream and Testing Stream collectively awarded $97.1 million across 187 contracts and grants to 175 Canadian innovators. There were 328 total applications received by ISC during the same period. Through the Challenge Stream, ISC launched 13 challenges, and awarded 95 contracts and grants, valued at $42.7 million. Through the Testing Stream, ISC awarded 92 contracts with total value of approximatively $54 million.
The fiscal year 2021-22 saw the largest number of awards issued to date by ISC and its departmental partners. However, only 5 of 21 departments (AAFC, NRC, NRCan, Health Canada, and ISED) met their mandated spending on the program (Departmental Challenge Stream Set Aside 1 % of 2015/16 procurement + intramural R&D). Some departments who fell particularly below their mandated spending included DND, PSPC, and ESDC.
Impact:
In February 2022, ISC completed an economic impact report based on survey responses from participant companies in both program streams. In addition to this report, ISC routinely collects survey data and engaged a third party for evaluation and analysis. This analysis showed $3 impact on Canada's GDP for every $1 invested in Canadian companies through ISC, generating a total economic impact of approximatively $300 million and 388 jobs sustained. The report also notes that visible minority majority-owned companies tend to create more jobs following award and have a larger impact on the GDP.
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
Wick #11, PhD Workshop in Economics of Innovation, Complexity, and Knowledge
December 13-14, 2023, the Collegio Carlo Alberto, Turin, Italy.
This workshop is organized by students of the Vilfredo Pareto Doctoral Program in Economics - University of Turinjointly with Brick, Collegio Carlo Alberto and INET-YSI. The aim of the workshop is to bring together young researchers from different disciplines and provide them with an opportunity to discuss their works. The main topics of the workshop broadly fall on the Economics of Knowledge and Innovation, Science and Complexity. The event will feature keynote contributions from Prof. Tom Broekel (University of Stavanger Business School), Prof. Stan Metcalfe (University of Manchester) and Prof. Reinhilde Veugelers (KULeuven, Bruegel, PIIE). The application deadline will be on October 10th.
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe