The IPL newsletter: Volume 25, Issue 506

May 15, 2024

News from the IPL

RESEARCH

Shauna Brail and Tara Vinodrai, Intergovernmental Committee for Economic and Labour Force Development (ICE)
This report by IPL affiliated faculty members Tara Vinodrai and Shauna Brail was commissioned by the Intergovernmental Committee for Economic and Labour Force Development (ICE). The ICE Committee was established in 1997 by officials in the Government of Canada, the Province of Ontario, and the City of Toronto to coordinate the economic and labour force development activities of the three governments (and the various departments and ministries within each government) in Toronto. The study analyzes the impacts of remote work on productivity, implications for the future of the city, and best practices in planning for recovery.

Editor's Pick

Strategies of Green Industrial Policy: How States Position Firms in Global Supply Chains

Bentley Allan & Jonas Nahm, American Political Science Review
The resurgence of industrial policymaking—particularly for emerging low-carbon industries—challenges social science theories that expect such interventions from centralized states or suggest that different kinds of states specialize in various forms of innovation policy. Interventionist forms of industrial policy have made a comeback among liberal economies. Coordinated economies now make use of market-driven strategies. This paper argues that the new generation of industrial strategies is shaped by the industrial development challenges that policymakers face at the sectoral level. It proposes a new theoretical framework that distinguishes between the policy orientation (targeted or open-ended) and the central agents driving financial and technological decision-making (governments or firms). The article shows that the choice of strategy is shaped by the level of uncertainty and the position of the domestic industry in global supply chains, that is, whether global supply chains are emerging or mature and whether the domestic industry is an entrant or incumbent.

Cities & Regions

EPA announces eight selections for $20 billion in grants under the Greenhouse Gas Reduction Fund

SSTI
This post summarizes the recent announcement announcment by theU.S. Environmental Protection Agency of its selections for $20 billion in grant awards under two competitions within the $27 billion Greenhouse Gas Reduction Fund (GGRF). The three selections under the $14 billion National Clean Investment Fund and five selections under the $6 billion Clean Communities Investment Accelerator will, according to an announcement from the EPA, “create a national clean financing network for clean energy and climate solutions across sectors…. By financing tens of thousands of projects, this national clean financing network will mobilize private capital to reduce climate and air pollution.”

Statistics

Survey of Innovation and Business Strategy, 2022

Statistics Canada
The 2022 Survey of Innovation and Business Strategy is a joint initiative of Statistics Canada; Innovation, Science and Economic Development Canada; the Atlantic Canada Opportunities Agency; the Institut de la statistique du Québec; the Ontario Ministry of Economic Development, Job Creation and Trade; and the Alberta Ministry of Jobs, Economy and Northern Development. Innovation is defined as a new or improved product or process (or combination thereof) that differs significantly from the businesses' previous products or processes and that has been made available to potential users (products) or brought into use by the businesses (processes). Nearly half (47.2%) of all businesses used at least one advanced technology in 2022. During the period from 2020 to 2022, these businesses (85.2%) were more likely to be innovative than non-users (60.0%). In 2022, the proportion of businesses using clean technologies increased by 1.3 percentage points from 2019, to 9.9%. Over one-fifth of businesses (21.2%) reported owning at least one type of intellectual property assets in 2022. Businesses owning IP assets were more likely to introduce innovations (83.9%) during the period from 2020 to 2022, compared with 68.6% of businesses that did not own IP assets.

Special Report on Batteries and Secure Energy Transitions

IEA
In the first comprehensive analysis of the entire battery ecosystem, the IEA’s Special Report on Batteries and Secure Energy Transitions sets out the role that batteries can play alongside renewables as a competitive, secure and sustainable alternative to electricity generation from fossil fuels – while also underpinning the decarbonisation of road transport by powering electric vehicles. In less than 15 years, battery costs have fallen by more than 90%, one of the fastest declines ever seen in clean energy technologies. The most common type of batteries, those based on lithium-ion, have typically been associated with consumer electronics. But today, the energy sector accounts for over 90% of overall battery demand. In 2023 alone, battery deployment in the power sector increased by more than 130% year-on-year, adding a total of 42 gigawatts (GW) to electricity systems around the world. In the transport sector, batteries have enabled electric car sales to surge from 3 million in 2020 to almost 14 million last year, with further strong growth expected in the coming years.

Innovation Policy

FACT SHEET: President Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade Practices

The White House
This statement outlines the Biden-Harris Administration's recent announcement directing the US Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China. The post outlines the rationale for the decision, as well as the various sectors that will be impacted (ex: electric vehicles, semiconductors, steel and alluminum, etc).

Industrial Policy with Conditionalities: A Taxonomy and Sample Cases

Mariana Mazzucato and Dani Rodrik, UCL Institute for Innovation and Public Purpose
In the context of a shift towards longer-term, public-value-oriented economic thinking, there is a real opportunity to reimagine the contracts that structure public-private relationships. Similar reasoning could also be relevant to the relationship between different public entities, such as the relationship between a country’s state-owned enterprise and the Treasury: benefits to the SOE can be structured with conditions to make sure the SOE directs its investments in particular ways, shares knowledge, makes products/services accessible, etc. Redesigning these contracts means redesigning the direction of the economy from the ground up. To succeed, modern industrial policies must be deliberately sustainable, welfare-oriented, and innovation-led; coordinated as a holistic package; and implemented cooperatively across government agencies and with the private and third sectors. The conditionalities written into contracts are a key site for realizing these aims.

Pulse check: BetaKit Town Hall attendees discuss the state of Canadian tech and where it needs to go

BetaKit
This post summarizes BetaKit’s Town Hall event. The event gathered a broad collection of technology leaders from across the country to share their perspectives on the state of Canadian tech and what the nation’s innovation ecosystem needs to succeed. See here and here to listen to remarks, and read a brief summary here. The event included insights from technology leaders from organizations such as Ada, Communitech, Growclass, Highline Beta, Knix.

Canada's Innovative Tax Credits: Fostering Supply Chain Integration and Enhancing Canadian Content in EV Production

Bentley Allan, Derek Eaton, Moe Kabbara, Centre for Net-Zero Industrial Policy
This brief discusses recent developments in Canada's industrial policy mix for the EV sector. The authors describe how Budget 2024's EV supply chain investment tax credit (ITC) recognizes the need to incentivize linked investments up the supply chain. Without explicitly requiring Canadian content, it creates an incentive for firms to include Made-in-Canada midstream materials and battery components. The authors note that this "this is smart industrial strategy from the Government" as "it marks a shift from an earlier strategy that focused just on the downstream." The EV supply chain ITC achieves this by covering an additional 10 per cent of the costs of buildings at various stages of the supply chain: EV assembly, battery production, and cathode active material (CAM) production. This comes over and above the clean manufacturing ITC of 30 per cent for machinery and equipment previously announced in Budget 2023. Critically, to qualify for the new EV supply chain ITC, a manufacturer must also be claiming the clean manufacturing ITC in all three of the segments of the supply chain. One of these segments may be through another company in which the manufacturer is at least a part owner.

Policy Digest

Agenda for Transformative Science, Technology and Innovation Policies

OECD
This report is designed to drive responsible and equitable research, development and innovation. The Agenda offers practical guidance for policymakers to formulate and implement Science, Technology and Innovation reforms. It also outlines key policy actions, including accelerating the productivity of research through AI and automation in science, investing in building digital expertise and specialised skills, and aligning national Science, Technology and Innovation priorities and co-ordinate funding for research and innovation activities to address global challenges.

The Agenda identifies six policy 'resources' and four areas where policies can foster 'relations' for transformative innovation:

STI ‘resources’ policy areas and associated key policy actions for transformation

1. Public funding and private financing of STI activities
• Introduce governance arrangements that promote agile STI funding and financing
• Broaden stakeholder engagement and decision criteria in STI funding instrument design and implementation
• Deploy funding portfolios that include significant support for high-risk high-reward research and the development of breakthrough technology
• Socialise some higher levels of risk to encourage multiple investors to co-finance transformative STI

2. Research and technology infrastructures
• Adopt strategic funding approaches that enhance stability, while enabling agility and synergies within a portfolio of activities
• Support the co-ordinated and collaborative development and use of RIs/TIs to tackle complex and interconnected global challenges
• Confirm RIs/TIs as sites for generating and stewarding high-quality data and technology for transformations
• Leverage RIs/TIs to address skills scarcity and mismatch associated with transformation

3. Enabling technologies
• Accelerate the productivity of research through AI and automation in science
• Mainstream the digital transformation into achieving the transformative goals
• Leverage digital technologies to facilitate decision-making in STI policy and administration
• Embed shared values into technology development and governance to advance public good while mitigating against potential risks
• Reinforce international co-operation in STI development through common ethical practices, norms and understanding of good technology governance

4. Skills and capabilities
• Monitor and respond to misaligned skills supply and demand to facilitate equitable transformative change
• Invest in building digital expertise and specialised skills and knowledge in diverse communities
• Cultivate a scientific research workforce that is resilient and diverse
• Build organisational capabilities to manage the cross-cutting and long-term nature of transformation

5. Structural and market conditions
• Co-ordinate with other policy areas to level the playing field for transformative technology and innovation to successfully compete
• Promote international technical standards to unlock new markets and weaken the appeal of established technologies
• Adopt regulatory approaches that are agile, technology neutral and human-centered
• Use IPR systems to drive innovation and foster the wide uptake of transformative technologies
• Harmonise, legitimise and institutionalise transformative investment approaches

6. Strategic intelligence
• Support novel and distributed sources of strategic intelligence to tackle global challenges
• Develop arrangements to combine different sorts of strategic intelligence for STI policymaking
• Cultivate skills and capabilities that promote the utilisation of strategic intelligence in STI policymaking
• Implement a strategic ‘policies for evidence’ agenda that promotes the production and use of strategic intelligence for transformative change

STI ‘relations’ policy areas and associated key policy actions for transformation

7. Society-STI relations
• Improve STI communication practices to cultivate mutual trust and understanding
• Engage diverse and inclusive perspectives to develop more robust and relevant STI-based solutions
• Mainstream and scale up public participation in STI activities and policymaking
• Advance and empower citizen-led STI activities through experimentation and knowledge sharing

8. STI co-operation
• Build innovation ecosystems and value chains that support transformation
• Develop flexible governance approaches for collaborations targeting transformation
• Promote collaborative platforms to support innovation for transformative change
• Disrupt established knowledge hierarchies that impede the adoption of insights from diverse disciplines

9. Cross-government coherence
• Actively co-ordinate and align priorities and interventions across government
• Promote consistency of policy actions across levels of government
• Harmonise government infrastructure and procedure to improve knowledge sharing and co-operation
• Streamline complex governance arrangements

10. International co-ordination in STI
• Align national transformative STI priorities and co-ordinate funding for research and innovation activities to address global challenges
• Strengthen Open Science and knowledge sharing to improve global resilience and scale up efforts to address collective challenges
• Safeguard research integrity and security of the global research system
• Scale up inclusive multilateral partnerships to respond effectively and equitably to global challenges
• Foster international market conditions that enhance competitiveness and equitable access to emerging STI-based solutions

Events

EVENTS

ISS2024

June 9-11, 2024, Gothenburg, Sweden
ISS2024 is the 20th biennial conference of The International Joseph A. Schumpeter Society. The conference takes place in Gothenburg, Sweden, between Sunday 9th June and Tuesday 11th June, 2024. The ISS2024 conference theme is "Transformation: Creative Accumulation and Creative Destruction in the Economy". The Deadline for submitting abstracts is Jan. 15th 2024.

2024 RSA Annual Conference: Global Challenges, Regional Collaboration and the Role of Places

11-14 June 2024, Florence, Italy
The Regional Studies Association’s Annual Conference 2024 #RSA24 is being held in partnership with the Department of Economics and Business Sciences and Department of Architecture, University of Florence, Italy. This four-day conference brings together academics and policymakers to exchange news, views and research findings from the fields of regional studies and science, regional and economic development, policy and planning.

2024 Industry Studies Association Annual Conference

June 13-15, 2024, Sacramento, CA, USA
This year's ISA conference is titled Empowering Community Wellbeing: Clean Energy, Sustainability and Industrial Strategy and will be held at California State University, Sacramento. In the heart of the world’s largest subnational economy, California, the Industry Studies Association proudly presents its annual conference with a theme that resonates with the future of our planet and communities. The conference will explore the dynamic interplay between California's pioneering efforts in clean energy and sustainability and their profound impacts on industrial strategy and community wellbeing around the world. Call for Paper and Panel Submissions

Technology Transfer Society Annual Meeting 2024

September 11-13, 2024, Brussels, Belgium
The conference theme is 'Blurring Boundaries and Ambiguous Roles: Universities and the Entrepreneurial Ecosystem.' The deadline for abstract submissions is February 15, 2024.

ANNOUNCEMENTS

Economist/Policy Analyst –Innovation and Technology Policy

The OECD Science, Technology and Innovation Directorate is looking for an Economist/Policy Analyst to support the work conducted by the Working Party on Innovation and Technology Policy (TIP). The selected candidate will work on one or several of the activities currently undertaken by the TIP team, depending on the profile and experience of the candidate, including activities in the following three fields: i) science, technology and innovation (STI) and its policies in support of green transitions, including specifically the preservation of biodiversity; ii) skills and ecosystem conditions for STI to support the green and digital transitions, including sectoral cluster policies in the field of advanced manufacturing and needs to support ambitious “moonshot” initiatives and iii) the implications of STI on social, territorial and industrial inclusiveness. This vacancy will be filled as soon as possible, and applications should be submitted no later than midnight CEST 28 May 2024.

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