MEDIA
How Canada’s middle class got shafted
How not to run a country: Government ineptitude and Canada’s economic malaise
Dan Breznitz
These two essays by IPL Co-Director Dan Breznitz are the first two instalments in The Globe And Mail's series, Prosperity’s Path. Successive governments have been warning about Canada’s slowing productivity for more than three decades. Now as the cost of living rises and per-capita economic output shrinks, this problem has reached an inflexion point. Dan Breznitz lays out how we got into this productivity crisis, and how we can get out.
RESEARCH
Toronto’s Cultural Sector: Economic dynamics and change, 1991 to 2021
Tara Vinodrai
This report from IPL Affiliated Faculty member Tara Vinodrai was written for the City of Toronto, Economic Development & Culture Division. This report provides an empirical overview of Toronto’s cultural sector, examining long-term changes in employment over the thirty-year period between 1991 and 2021. Insights from this analysis can provide baseline data to inform economic development and cultural planning in the City of Toronto. The analysis can also provide policymakers, decision makers and key stakeholders in the cultural sector with insights into the sector and its contribution to the regional economy.
Restoring Freedom in Freedom of Thought
Daniel Munro
This article is authored by IPL Senior Fellow and IPL Associate Daniel Munro. The article discusses the issue of whether freedom of thought at risk in the digital age. Social media, evolving neuro-technologies and the algorithmic environment increasingly complicate how we form thoughts and interfere with our ability to make decisions in autonomous, self-directed ways. The piece is a response to the report Freedom of Thought: Reviving and Protecting a Forgotten Human Right, from CIGI’s project on freedom of thought, led by Susie Alegre and Aaron Shull.
EVENTS
Chips war? Global production networks and geopolitics in the post-pandemic US and East Asia
208N, North House, Munk School of Global Affairs & Public Policy, 1 Devonshire Place, Toronto ON
This is the first seminar of the 2024/25 IPL Seminar Series. Professor Yeung offers some key empirical observations on the highly contested and politicized nature of semiconductor global production networks since the US-China trade war and the Covid-19 pandemic. In this capital-intensive manufacturing industry, governance and power dynamics are manifested differently from many other industries due to highly complex technology regimes, production network ecosystems, and, more recently, geopolitical imperatives. While some of these critical dynamics had been in play ahead of the 2020s in China, Taiwan, and South Korea, their intensity and significance became more apparent by the early 2020s. Professor Yeung then examines the most significant implications for East Asian development in the post-pandemic 2020s and the need for strategic partnership with technology leaders towards building national and regional resilience in the United States, Western Europe, and East Asia. He will end with a discussion of some relevant future research agendas on technology, resilience, and politics for the interdisciplinary studies of global production networks and global value chains.
Professor Henry Yeung is Distinguished Professor at the Department of Geography, National University of Singapore, until 31 December 2024. In January 2025, he will take up the Choh-Ming Li Professorship at the Department of Geography and Resource Management, The Chinese University of Hong Kong. His most recent books are Theory and Explanation in Geography (RGS-IBG Book Series, Wiley, September 2023), Interconnected Worlds: Global Electronics and Production Networks in East Asia (Innovation and Technology in the World Economy Series, Stanford University Press, June 2022; Silver Medal in the Business Theory Category from the 2023 Axiom Business Book Awards and winner of the 2024 ISA Asia-Pacific Distinguished Book Award, sponsored by the International Studies Association), Strategic Coupling: East Asian Industrial Transformation in the New Global Economy (Cornell Studies in Political Economy Series, Cornell University Press, 2016), and Global Production Networks: Theorizing Economic Development in an Interconnected World (with Neil Coe, Oxford University Press, 2015).
OECD
Governments worldwide strive to find the appropriate level and balance of financial support for innovation to address several competing and pressing policy objectives, such as improving productivity or addressing the climate crisis. This policy brief presents the latest OECD evidence on how governments direct support to innovation, drawing on recent OECD measurement and impact analysis. It recommends rebalancing innovation support portfolios and addressing major measurement gaps on directionality that are critical for managing for the transformation of innovation systems for key transitions.
Employment imbalances in EU regions: technological dependence or high-tech trade centrality?
Ariel L. Wirkierman, Tommaso Ciarli & Maria Savona, Regional Studies
This article analyses the role of technological dependence and interregional trade centrality in explaining a region’s employment performance. The authors first identify the core–periphery technological structure of European Union (EU) regions, clustering them based on their high-tech trade relations (trade blocks) and technological and economic indicators (place-based regional groups). They show that EU regions have a fractal structure: blocks at the core and periphery of the high-tech trade network are divided into core and peripheral subgroups, which differ significantly in terms of innovation and employment performance. Next, the econometric analysis shows that buyer centrality is the main component of employment growth (especially in services), but within trade blocks it has to be combined with low technological dependence on more innovative regions (especially in manufacturing). Cohesion policies should pay attention to the fractal structure of regional inequalities, and Smart Specialisation strategies should consider that unrelated diversification towards activities intensive in the use of high-tech inputs may be more conducive to employment growth.
SSTI develops state SBIR/STTR resource guide
Jerry Coughter, SSTI
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs offer opportunities for small businesses to innovate and secure federal funding for their ideas from eleven U.S. government agencies. Every state in the U.S. assists potential SBIR/STTR companies to increase their chances of success. SSTI has created a new SBIR/STTR resource guide that includes examples of state-level initiatives in four broad categories: Proposal assistance and mentorship, Technical assistance and networking, Financial assistance, and Commercialization support.
Characteristics of research and development in Canadian industry
Statistics Canada
This interactive data visualization dashboard, Characteristics of research and development in Canadian industry, provides a comprehensive picture of research and development (R&D) activities in Canadian industry. Users will find extensive coverage of characteristics on R&D activities in Canadian industry. Visualizations include: In-house R&D expenditures, Outsourced R&D expenditures, Energy-related areas of technology, and Payments made and received for intellectual property products and technological services (IP).
US Department of Energy
This announcement is part of the Biden-Harris Administration’s Investing in America agenda. The U.S. Department of Energy (DOE) announced over $3 billion for 25 selected projects across 14 states to boost the domestic production of advanced batteries and battery materials nationwide. The portfolio of selected projects, once fully contracted, are projected to support over 8,000 construction jobs and over 4,000 operating jobs.
The Conference Board of Canada and MaRS Discovery District
Has Canada lost its competitive edge? What role does innovation play in supporting start-ups? Drawing from interviews with founders, innovation ecosystem leaders, and experts from various sectors and regions, this report looks at the economic role innovation plays, why tech start-ups need added support, and how Canada can grow its companies here at home. Canada has no shortage of entrepreneurial ambition, but tech founders find it challenging to grow their businesses here. This spotlight paper provides insights from founders and tech leaders on how Canada can help scale home-grown innovations into major companies.
Climate's Bottom Line: Carbon Budgeting and Canada’s 2035 Target
Net-Zero Advisory Body
In a new report, “Climate’s Bottom Line: Carbon Budgeting and Canada’s 2035 Target”, the NZAB recommends developing a national carbon budget. Carbon budgets are used by other countries to better track the effect of policy decisions on the climate and the consequences of delaying action. Alongside the carbon budget, the NZAB recommends that Canada adopt a 2035 emissions target of 50-55% reduction below 2005 levels.
The White House
This post summarizes the Biden-Harris Administration’s actions to secure critical mineral supply chains. In his first weeks in office, President Biden signed Executive Order 14017, America’s Supply Chains, which mandated a 100-day review of U.S. critical mineral supply chains. Following the report’s recommendations, the Biden-Harris Administration has mobilized historic resources to strengthen domestic critical minerals supply chains, from mining to manufacturing to recycling. Through the Biden-Harris Administration’s Investing in America agenda, the Department of Energy, the Department of Defense, the Department of the Treasury, and the Department of Commerce are supporting the domestic battery and critical mineral supply chain through grants, loans, and allocated tax credits.
Since 2020, companies have announced more than $120 billion in investments in battery and critical mineral supply chains. The post summarizes how this investment has expanded the U.S. critical minerals industrial base and reduced reliance on foreign and unreliable supply chains. "In 2021, the U.S. had enough operating and announced battery manufacturing capacity to power 500,000 electric vehicles—today, announced battery gigafactories will power 10 million electric vehicles, enough to meet domestic demand by 2030. In 2021, U.S. lithium producers met just 5 percent of global demand. Thanks to investments in processing and manufacturing, the US is not just keeping pace with the fivefold increase in lithium demand but is on track to outpace it: the U.S. is set to supply more than one-fifth of global demand outside of China by 2030."
The report summarizes the three pillars of activity (with project examples) as follows:
Battery Material Processing and Manufacturing
The Department of Energy is announced over $3 billion across 25 projects through the Bipartisan Infrastructure Law to extract, process, and recycle critical minerals and materials and manufacture key battery components, as well as support next-generation battery manufacturing. Combined with the first round of battery material processing and manufacturing awards, funding from this program will generate $16 billion in public and private sector investment throughout the entire battery supply chain. Project details can be found here.
The Department of the Treasury allocated $800 million through the first round of allocations under the Inflation Reduction Act Section 48C Qualifying Advanced Energy Project Tax Credit for critical mineral processing, refining and recycling, including for lithium-ion battery recycling, battery material processing, and battery component manufacturing.
Project Example: "The Department of Energy Loan Program Office closed a loan of $2.5 billion to Ultium Cells and issued a conditional commitment of $9.2 billion to BlueOval SK, joint ventures between General Motors and LG Energy and Ford and SK respectively, for six total battery manufacturing facilities with more than 200 gigawatt hours of capacity, enough to power more than 2 million EVs."
Supporting Responsible Domestic Mining
Project Example: "The Department of Energy Loan Programs Office issued a $2.26 billion conditional commitment for lithium processing at the fully permitted Thacker Pass lithium mine in Nevada, which will produce enough lithium to power more than 800,000 EVs annually when operational."
Establishing a “Mine-to-Magnet” Supply Chain for Rare Earth Elements
Rare earth permanent magnets power everything from electric vehicle motors and wind turbines to missile defense systems. Currently, large portions of the supply chain, from mining to processing to magnet manufacturing, are controlled by China. Through the Department of Defense and the Department of Energy, the Biden-Harris Administration is taking action to secure domestic production throughout the magnet supply chain.
Project Example: "The Department of Defense has awarded $45 million to MP Materials for rare earth oxide processing at Mountain Pass, the only operating U.S. rare earth element mine, and more than $288 million to Lynas USA to establish commercial-scale rare earth oxide production."
EVENTS
WICK#12 PhD Workshop in Economics of Innovation, Complexity and Knowledge
December 12-13 2024, Turin
Annual meeting for doctoral students and young researchers in Economics of Innovation, Complexity and Knowledge. The Workshop is organized by the students of the Vilfredo Pareto Doctoral Program in Economics, in collaboration with the University of Turin, BRICK, Collegio Carlo Alberto and Young Scholar Initiative
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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe
