The IPL newsletter: Volume 26, Issue 529

June 16, 2025

News from the IPL

PRESS

Canada’s innovation policies need overhaul to boost economy, experts say

Pippa Norman, The Globe and Mail
IPL Co-Director Dan Breznitz is quoted in this article. The article summarizes the discussion on innovation policy that took place at the recent Intersect 2025 conference in Toronto. Dan Breznitz touted Canada’s investments in fundamental research for technology, but emphasized that the country needs to help companies scale while gaining strategic control of its talent and research. He noted that Canada needs to figure out how to capitalize on its valuable industries, such as critical minerals, and engage and invest in its own technology. The article also includes on insights from other panelists, including Jim Balsillie, co-founder and chair of the Canadian Council of Innovators.

Editor's Pick

The Right Move at the Right Time: A New Canadian Industrial Strategy

The Transition Accelerator and the Commission on Carbon Competitiveness
Released jointly by the Transition Accelerator and the Commission on Carbon Competitiveness (C3), this report offers a new strategic approach for Canada to address long-standing problems of under-performance on productivity and innovation. The report surveys industrial policy for electric vehicles in China, Korea, and Japan; semiconductors in Taiwan; and aquaculture in Chile, as well as Canadian success stories in the canola industry, the oil sands, and the satellite industry—all very different cases—and derives three common elements of successful efforts: 1) they target specific technologies/sectors and stick around for the long game—as long as the effort yields results; 2) they establish tailored coordination mechanisms that can continuously align industry and government efforts as innovators’ needs evolve; and 3) they augment a research and development (R&D)-focused strategy with a wide variety of other supporting policy instruments. Also see this Globe and Mail article on the report by Adam Radwanski, who concluded that "compared with some of the much bigger bets that [the Carney] government is currently negotiating toward with the provinces, this particular version of nation-building could be relatively low cost and high reward."

Cities & Regions

The Global Startup Ecosystem Report 2025

Startup Genome
The Global Startup Ecosystem Report 2025 (GSER 2025) is a comprehensive analysis of the current state of startup ecosystems worldwide. Now in its 13th year, the GSER provides insights into the world’s leading startup ecosystems, emerging trends, and key challenges facing entrepreneurs. It is based on extensive research and analysis of data from 5 million startups across 350+ global ecosystems and over a decade of independent research and providing policy advice to more than 185 economic and innovation ministries and public/private agencies in over 65 countries.

Varieties of agglomeration: Disentangling horizontal and vertical agglomeration within the manufacturing sector in the United States

Nikhil Kalathil, Lauren Lanahan, Maryann Feldman, Erica R.H Fuchs, Research Policy
This article decomposes regional agglomerations into two components that differentiate between horizontal (co-location with peer industries) and vertical (co-location with suppliers) agglomeration. Using employment and establishment data at the US county level and the six-digit industry level, the authors demonstrate that manufacturing industries and regions that would otherwise look similar, in fact vary in their degree of vertical and horizontal agglomeration. Industries with a higher contribution of manufactured goods to overall inputs' value are correlated with vertical agglomeration, while more R&D intensive industries are correlated with horizontal agglomeration. Using the semiconductor industry as an illustrative example, the authors document how heterogeneity in industry-county rates of vertical and horizontal agglomeration reflects differences in the products manufactured. These industry-level and within-industry differences are under-observed and sometimes obfuscated by existing agglomeration measures. The authors conclude with a theoretical framework for regional and industrial policy interventions.

Statistics

Recent Research: ASPI Report says U.S. cedes lead in critical technologies research

Jerry Coughter, SSTI
This post summarizes The Australian Strategic Policy Institute’s (ASPI) report, ASPI’s two-decade Critical Technology Tracker: The rewards of long-term research investment The report identifies which countries and institutions are leading in high-impact research across 64 critical technological domains, including defense, space, energy, environment, artificial intelligence, biotechnology, robotics, cyber, computing, advanced materials, and quantum technologies. The tracker's methodology involves analyzing the top 10% of highly cited research publications in each critical technology. According to ASPI, this approach emphasizes research that significantly influences the technological lifecycle and is likely to lead to patents and breakthroughs. The dataset spans from 2003 to 2023, allowing for both short-term (five-year) and long-term (21-year) trend analyses. The report’s key finding is a change in global leadership. Data from the first five years covered in the report (2003-2007) shows the U.S. led in 60 of the 64 technologies back then. However, data from the last five years (2019-2023), shows China emerged as the leader in 57 of these technologies, while the U.S. leads in just seven

Innovation Policy

The Bayh-Dole Act’s Role in Stimulating University-Led Regional Economic Growth

Stephen Ezell and Meghan Ostertag, ITIF
Universities play a pivotal role in America’s technology economy, serving as a crucial source of research, inventions, patents, start-up technology companies, and regional economic and employment growth. This report shows how the Bayh-Dole Act has played an instrumental role in spurring academic technology transfer activities that serve as vital drivers of American innovation.

Improving Canadian Housing: A Pillar of the Innovation Economy

Laurent Carbonneau, CCI
This post by CCI Director of Policy and Research discusses the innovation-related aspects of Canada's housing crisis. The post commends the Liberal Party's proposal to create a new agency, Build Canada Homes, to deploy $25 billion in financing for modular, prefabricated housing, and the government would use the power of public demand (procurement) to stimulate innovation. It links to CCI's recent report, A Mandate to Innovate, which called for Canada’s new government to supercharge our traditional industries. The author explores opportunities for value-added innovation in construction, such as mass timber.

Critical Path: Securing Canada's place in the global critical minerals race

Canadian Climate Institute
This report argues that Canada’s critical minerals sector has barely scratched the surface of a multi-billion dollar opportunity. Expanding Canada’s critical mineral mining activities could capitalize on some of the economy’s inherent strengths: a well-regulated financial sector with extensive mining expertise, high environmental, social, and governance standards, and a low-carbon power grid with competitive electricity rates.The report examines how governments can attract private capital and cut project timelines—without cutting corners—to expand the production of critical minerals. Those goals can be achieved by sharing financial risks with investors, strengthening Indigenous rights and partnerships in project development, reducing environmental risks to secure local support, and improving the efficiency of project reviews.

Policy Digest

The Productivity Benefits of High-Value, Low-Carbon Investment

Travis Southin, The Transition Accelerator
This report argues that adding value to natural resources can help address Canada’s productivity crisis. It emphasizes that strategic industrial policy can help scale innovative firms into leaders in low-carbon technologies—such as mass timber, sustainable aviation fuel, and EV batteries—opening new markets for Canadian wood, biomass, and critical minerals. This builds economic resiliency, especially in the face of U.S. threats to Canadian economic sovereignty.

The report summarizes the main arguments as follows:

THE PROBLEM

Business as usual won’t solve the productivity crisis
• Canada’s productivity crisis is real and long-running. Low labour and multifactor productivity are jeopardizing Canadian living standards.
• Oil and gas is impacting overall productivity. Declining labour productivity and low multifactor productivity in this sector weighs on national figures.
• Canada struggles to scale up innovative firms. Without enough high-growth scale-ups, productivity stagnates.

THE OPPORTUNITY

Scale technology firms in value-added natural resources. Look to clean technologies. Clean technology firms outperform in R&D spending and export growth—key factors for productivity growth. The three examples below show how scaling innovative firms in low-carbon, value-added resource technologies can boost R&D and productivity throughout the supply chain.

Three key opportunity areas are proposed:
1. Mass Timber Construction Materials: Converting wood into innovative, prefabricated construction materials can decarbonize buildings while reducing costs and construction timelines. This could raise productivity and R&D in forestry, wood product manufacturing, and construction— typically below-average sectors for these metrics.
2. Sustainable Aviation Fuel: Transforming forestry, agriculture and municipal waste into sustainable jet fuel can add value to these feedstocks while decarbonizing aviation. This could raise productivity and R&D in below-average sectors for these metrics, such as forestry, while improving already-strong performers such as chemical manufacturing.
3. Electric Vehicles & Batteries: Converting minerals and metals into next-generation battery technologies for EVs can help decarbonize transportation while mitigating threats to downstream auto assembly, potentially reversing declining productivity in upstream sectors like non-ferrous metal production and processing (except aluminum), and downstream sectors like transportation equipment manufacturing.

THE APPROACH

Scaling domestic champions through industrial policy will boost productivity, increase R&D, drive exports, and help the Canadian economy decarbonize.
Core industrial policy actions include:
1. Setting clear targets based on production quantities, market share, and/or technological performance benchmarks.
2. Creating public-private coordination mechanisms to facilitate information flows.
3. Aligning the policy mix of demand- and supply-side supports to meet the needs of innovative firms as they scale.

Industrial policy should support innovation in the extraction and value-added processing and manufacturing stages clean technology value chains. This should reinforce backward linkages (e.g., mining machinery & techniques) and forward linkages (e.g., processing and manufacturing) between resource extraction, manufacturing, and end use.

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

DRUID25

Toronto, June 25-27, Rotman School of Management, University of Toronto
Since 1996, DRUID has become one of the world's premier academic conferences on innovation and the dynamics of structural, institutional and geographic change. DRUID is proud to invite senior and junior scholars to participate and contribute with a paper to DRUID25, hosted by Rotman School of Management, University of Toronto. Presenting distinguished plenary speakers, a range of parallel paper sessions, and an attractive social program, the conference aims at mapping theoretical, empirical and methodological advances, contributing novel insights, and help identifying scholarly positions, divisions, and common grounds in current scientific controversies within the field. Submission deadline: March 1

SASE 2025 Annual Conference

9-12 July 2025, Palais des Congrès, Montréal, Québec

The conference's theme is 'Inclusive Solidarities: Reimagining Boundaries in Divided Times.'

6^th International ZEW Conference on the Dynamics of Entrepreneurship (CoDE)

October 9-10, 2025, Mannheim
The aim of this conference is to discuss recent contributions to entrepreneurial research. It focusses on the formation, growth and exit of young firms linked to innovation, environmental sustainability, or entrepreneurial finance. The conference also addresses the challenges and opportunities of entrepreneurship policies. You are welcome to participate in the conference and contribute theoretical, empirical and/or policy-oriented papers on all areas of entrepreneurship research. Interested researchers are invited to submit a paper (or extended abstracts of at least 4,000 words are also welcome) to entrepreneurship2025@zew.de. Submission deadline: 31 May 2025

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