The IPL newsletter: Volume 25, Issue 517

December 1, 2024

News from the IPL

MEDIA

As we build a vision of Canada, let’s make sure it has more Canada in it

This Globe and Mail opinion article is authored by IPL Co-Director Dan Breznitz

RESEARCH

Who gets left behind by left behind places?

Dylan S Connor, Aleksander K Berg, Tom Kemeny, Peter J Kedron, Cambridge Journal of Regions, Economy and Society
This paper is co-authored by IPL Affiliated Faculty member Tom Kemeny. This article documents that children growing up in places left behind by today’s economy experience lower levels of social mobility as adults. Using a longitudinal database that tracks over 20,000 places in the USA from 1980 to 2018, the authors identify two kinds of left behind places: the ‘long-term left behind’ that have struggled over long periods of history; and ‘recently left-behind’ places where conditions have deteriorated. Compared to children of similar baseline household income levels, the authors find that exposure to left behind places is associated with a 4-percentile reduction in adult income rank. Children fare considerably better when exposed to places where conditions are improving. These outcomes vary across prominent social and spatial categories and are compounded when nearby places are also experiencing hardship. Based on these findings, the article argues that left behind places are having ‘scarring effects’ on children that could manifest long into the future, exacerbating the intergenerational challenges faced by low-income households and communities. Improvements in local economic conditions and outmigration to more prosperous places are, therefore, unlikely to be full remedies for the problems created by left behind places.

Sector connectors, specialists and scrappers: How cities use civic capital to compete in high-technology markets

Tijs Creutzberg, Darius Ornston, David Wolfe, Urban Studies
This article is co-authored by IPL Affiliated Faculty member Darius Ornston and IPL Co-director David Wolfe. This article uses three cities in the same Canadian province (Ontario): Toronto, Ottawa and Waterloo, to examine how regions compete in high-technology markets. The authors find that regions use civic capital to leverage new, technological windows of opportunity, but they do so in very different ways. Tracing Toronto’s evolution from a marketing hub for foreign multinationals into a centre for entrepreneurship, the authors illustrate how weak ties and cross-sectoral buzz created a ‘super connector’, scaling high-technology firms in a wide variety of areas. In Ottawa, task-specific cooperation in R&D, education and specialized infrastructure enabled the region to overcome the disadvantages of its small size as a ‘specialist’ in a single, capital-intensive niche, telecommunications equipment. Finally, entrepreneurs in Waterloo eschewed task-specific cooperation for peer-to-peer mentoring. By diffusing generic knowledge about how to circumvent the liabilities of smallness, mentoring networks enabled this ‘scrapper’ city to support smaller start-ups in a broad range of niches.

Editor's Pick

U.S. Department of Energy Releases First-Ever Blueprint for a Clean and Competitive Industrial Sector

The U.S. Department of Energy (DOE)
The U.S. Department of Energy (DOE) and the White House Office of Science and Technology Policy (OSTP), with input from Departments and Agencies across the federal government, recently released “The National Blueprint for a Clean & Competitive Industrial Sector.” Building on ongoing industrial investments across Federal agencies, the Blueprint outlines five whole-of-government strategies within a private-sector led and government-enabled framework to fuel continued growth of Amercian manufacturing. The Blueprint outlines a national agenda for a private sector-led, government-enabled transformation of U.S. manufacturing, including a suite of new levers and five strategies to guide near-term Federal government coordination: 1) Accelerate deployment of commercially available, cost-effective lower carbon solutions in the near term; 2) Demonstrate emerging solutions at commercial scale to de-risk deployment; 3) Increase data use to drive emissions reductions and efficiency gains that can significantly improve performance and track progress; 4) Innovate and advance research to develop transformative processes and products for deep GHG emissions reductions; 5) Integrate across the product life cycle to reduce embodied GHG emissions in industrial products and minimize waste.

Cities & Regions

Massachusetts lawmakers approve $4B for major initiatives in life sciences, climatetech, and AI

Laura Lacy Graham, SSTI
On Nov. 14, the Massachusetts’ House and Senate approved a compromise $4 billion economic development measure after months of negotiations that followed the end of their formal legislative session this past summer and the spring release of Gov. Maura Healey’s $3.5 billion proposal, An Act relative to strengthening Massachusetts’ economic leadership, or the Mass Leads Act.  The Mass Leads Act sought to reauthorize the state’s life sciences investments at $1 billion for the next decade, launch a separate $1 billion, 10-year climatetech initiative, and build on the momentum of the state's CHIPS + Science wins by proposing targeted investments in advanced manufacturing and robotics. It also included $100 million to create an Applied AI Hub in Massachusetts.

Statistics

Analysis on Federal Business Innovation and Growth Support to Canadian Exporters, 2021

Statistics Canada
This analysis examines Canadian goods exporters that were funded by the federal government through business innovation and growth support (BIGS) programs. More specifically, the following analysis covers Canadian exporters at the enterprise level and examines exporters that were engaged in international merchandise trade only. In 2021, 12.2% of all Canadian exporting enterprises received BIGS, and the total value of exports from these beneficiaries was $363.2 billion (63.2% of total exports from Canada). Canadian exporters that were funded through BIGS programs received $274,000 of support, on average. In comparison, BIGS beneficiaries that did not export goods received $105,000 of support, on average.

Increased R&D spending isn’t necessarily boosting US productivity as industrial giants focus on defending their turf

IMF
Investing more in research and development, we’ve long assumed, is a surefire way to spur innovation, increase productivity, and fuel job creation and economic growth. And yet, as the US dramatically expanded R&D spending over the past four decades, the opposite happened. Innovation, productivity gains, and economic expansion slowed. What went wrong?  Real-world data show that there’s more nuance to encouraging innovation than simply throwing money at it. Giant enterprises came to dominate vast swaths of the American economy, crowding out more innovative smaller businesses and start-ups. Across sectors, the biggest players prioritized strategic moves to defend their businesses rather than seeking genuine innovation, and as a result the economy missed potential growth opportunities, according to recent research. 

Innovation Policy

A strategic approach to evaluating battery innovation investments

Rahul Malik, Koen Bertens, René-Pierre Allard, Katherine Thompson, Jennifer Hiscock, Cynthia Handler, & Amanda Wilson, iScience
Driven predominantly by public and private innovation, rechargeable batteries have, over a few decades, graduated from powering luxury consumer electronics to becoming one of the linchpins of the energy transition. Rapid adoption trends of batteries must accelerate to meet global net-zero targets for mobility and stationary storage, and will require making sound investments in battery innovation that deliver the most value. Because battery innovation is increasingly complex, multi-disciplinary, and subject to the coordination of stakeholders across academia, industry, government, and the broader public, building common and intuitive frameworks for understanding becomes critical to making progress. In this Perspective, the authors present and employ five conceptual, descriptive, technical, and social frameworks that, taken together, provide a holistic assessment of innovation opportunities in the battery sector. Finally, the authors illustrate their implementation as the foundation of the Strategic Approach to Battery Innovation pursued by the Government of Canada’s Office of Energy Research and Development.

Production tax incentives to help build a Future Made in Australia

The Hon Madeleine King MP Minister for Resources and Minister for Northern Australia
This recent joint media release with Treasurer Jim Chalmers, Minister for Climate Change and Energy Chris Bowen and Assistant Minister for a Future Made in Australia Tim Ayres outlines  the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024.The legislation establishes two tax incentives: 1) It establishes a Hydrogen Production Tax Incentive worth $2 per kilogram of renewable hydrogen produced between 2027–2028 and 2039–40 for up to ten years per project. 2) It establishes a Critical Minerals Production Tax Incentive worth ten per cent of relevant processing and refining costs for Australia’s 31 critical minerals, for critical minerals processed and refined between 2027–28 and 2039–40, for up to ten years per project.

Accelerating the deployment of SMRs in Canada: The importance of intermediaries

Policy Digest

Mission-Oriented Innovation Policies for Net Zero: How Can Countries Implement Missions to Achieve Climate Targets?

OECD
This report analyzes mission-oriented innovation policies (MOIPs). The report leverages a unique database of 101 “net zero missions” and 17 in-depth case studies to assess the added value of MOIPs in supporting national greenhouse gas emissions reduction commitments, compared to traditional science, technology and innovation (STI) policy approaches.

Setting ambitious goals, but lacking direction

MOIPs encourage the collective development of broad, ambitious goals, engaging a wide array of actors across different sectors. However, despite criticisms of being overly top-down, most missions remain largely bottom-up in practice. Their objectives often lack focus and their target, if any, non-measurable. Their strategic agenda and roadmap are critical in setting negotiated pathways to achieve these objectives but remain indicative and are not systematically used to monitor the progress of their portfolio of activities. To realise their ambitions, missions need to become more outcome-focused, with clear targets and timelines, including intermediate milestones.

Engaging actors and committing resources beyond science, technology and innovation

In almost all cases, STI authorities have taken the lead on missions, acting as champions from the outset. They have successfully convened at the “mission table” diverse actors – including policy makers, regulators and stakeholders from sectors like transport and energy – around a common agenda to align their investment and exchange information on progress. Unlike traditional interministerial and cross-sectoral strategies, which often lack actionable mechanisms and dedicated budgets, missions are associated with specific governance structures and tailored interventions designed to achieve their objectives. However, the participation of sectoral policy and regulatory authorities in the mission’s governance bodies to set mission agendas and align plans has not yet been confirmed by significant commitments in the form of financial resources or mobilisation of their interventions to support the mission portfolio. To significantly “span the boundaries”, missions should incorporate the necessary policy instruments and incentives to scale-up and deploy the solutions they develop. As missions progress, securing formal connections to the large-scale national climate funds and sustainability transition resources is critical to complete the “last mile” of the innovation process.

Providing missions with dedicated multiannual funding to expand beyond research and innovation

Missions generally benefit from longer term and more stable funding than traditional STI initiatives, and their budgets can compare with or even exceed those of climate research and development programmes of similar scope. However, these resources are still insufficient to extend beyond research, innovation and demonstration. Additionally, the fragmentation of a mission’s budget across diverse funding sources hampers its ability to reap its systemic effects and make it contingent on the goodwill of the mission’s partners. A certain level of central, multiannual funding specifically dedicated to the mission is crucial, notably to incentivise partners to allocate resources to specific mission activities, rally new partners, fill potential portfolio gaps, and enable continuous learning and improvement. Furthermore, very few innovative financial models and funding instruments have been used in net zero missions to raise private funding. There is also a need to design and experiment with new innovative funding mechanisms to increase private engagement in and commitment to the missions.

Improving mission portfolio management for greater impact

Despite their potential, proactive and flexible portfolio management practices necessary to maximise the systemic benefits of missions remain underdeveloped. Mission managers are only beginning to implement practices that exploit the complementarities and synergies between various activities within a consistent portfolio. Barriers to effective portfolio management include a lack of methodologies and criteria for enhancing synergies, inadequate staffing and skills, fragmented funding, conflicting incentives, and restrictive bureaucratic rules. Overcoming these challenges requires investment in the development of the needed capabilities, tools and methods for proactive portfolio management. Acknowledging their specific status, these initiatives should also be granted enhanced strategic flexibility to operate as required to realise their strategic agenda. For all these tasks, high-level political backing and strong and well-resourced dedicated teams at both the MOIP initiative and individual mission levels are needed.

Facing the three main challenges of net zero missions, but ready to overcome them

Overall, the analysis reveals that most net zero missions produce many of the effects outlined in their theory of action. In most cases, they represent a marked improvement over traditional STI policy mixes in terms of the ambition, scope and intensity of the collaboration needed to collectively address the complex challenge of climate change. However, these achievements will not be sufficient to scale-up and deploy these innovations on the massive scale needed to fulfil national net zero targets. Missions need to find their way out of three main challenges – or “traps” – that have emerged at the still early stage of this policy approach:

  • The STI Trap: Net zero missions must extend their focus beyond technological innovation.

  • The Orientation Trap: Missions must not only provide targets and strategic agendas but also drive meaningful change in activities and behaviours.

  • The Policy Trap: Missions need to leverage resources beyond public budgets through greater engagement with private sector resources and capabilities.

Events

OPPORTUNITIES

Call for application for a fellowship for the project “Science technology relationships in the development of AI in the health sector”

The application for this 
University of Torino position must be submitted exclusively online, using the form available here: https://forms.gle/NHKw4Nnhta7Mew4BA .Applicants are advised that once they receive the application registration form via email, they must complete the transmission by printing the said email, signing it and transmitting the scan to the following address: incarichi.cle@unito.it.

Duration: 18 months. The total amount of the grant is € 34,200.00 and is paid in monthly installments (€ 1,900.00 per month after tax).  The research activity consists of:
- Research on the diffusion of AI and robotics technologies within hospitals.
- Creation and analysis of comparative data at regional and national levels.
- Production of two articles to be submitted to international scientific journals.

EVENTS

SSTI's Annual Conference: Focusing on the Future

December 10-12, Metro Phoenix, Arizona, USA
Yearly gathering of leaders across all aspects of regional innovation advancement through public-private partnerships, policies and government-funded programs in the practice of technology-based economic development across the U.S.

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

The 10th Atlanta Conference on Science and Innovation Policy

May 14-16, 2025, Georgia Institute of Technology
Hosted by Georgia Tech, the Atlanta Conference provides a forum to present and discuss high quality empirical research by about 300 scholars representing more than 30 countries that focus on the challenges and trends associated with science and innovation policy and processes. Abstracts Due: Nov. 17, 2024.

Twin Transition, Ecosystems, and Disruptive Innovation

October 23rd-24th 2025, Venice School of Management - Ca’ Foscari University of Venice, San Giobbe - Economic Campus.
The 19th edition of Regional Innovation Policies Conference will take place in Venice, Italy.

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