The IPL newsletter: Volume 7, Issue 140

News from the IPL


This newsletter is published by The Innovation Policy Lab at the Munk School of Global Affairs, University of Toronto, and sponsored by the Ministry of Research and Innovation. The views and ideas expressed in this newsletter do not necessarily reflect the views and policies of the Ontario Government.


NRC Launches BioAccess Commercialization Centre

The National Research Council of Canada (NRC) officially opened a new BioAccess Commercialization Centre recently in Saskatoon. The Centre was created by NRC to assist innovative firms in Western Canada’s nutraceutical, functional food and natural health products industries bring products to market and stake a claim in the lucrative $150 billion global market. NRC-delivered services include research expertise, business development support programs, expert business knowledge, resources and advice. The Centre was established by NRC in response to research showing that as few as five per cent of Canadian small and medium sized enterprises (SMEs) survive their first five years of business. In the nutraceutical, functional food and natural health products industries, commercialization hurdles are especially complicated. The low success rate can often be attributed to a lack of support and/or expertise in areas such as marketing, management, technology assessment and the regulatory approval process.



Editor's Pick


The Young and the Restless: How Atlanta Competes for Talent

Atlanta Chamber of Commerce

Atlanta leads the nation in attracting highly educated 25- to 34-year-olds, the most coveted demographic in the country. They are known as the “Young and Restless.” This study shows that from 1990 to 2000, metro Atlanta increased its young adult population 46 percent, which is faster than any of the top 25 most populous metropolitan areas in the country. At a time when this age group was declining by 9 percent nationally, the number of young adults increased 20 percent in Atlanta. All other of the top 50 metropolitan areas, besides San Francisco, had smaller increases or outright declines in their 25- to 34-year-old population from 1990 to 2000. And the competition for young, talented labor is getting fiercer as baby boomers retire and the workforce shrinks. The report cites Atlanta’s competitive advantageous as affordable housing, cultural opportunities, jobs and Hartsfield-Jackson Atlanta International Airport.

The Young and the Restless Website

Joe Cortright, Impresa Consulting and Carol Coletta, Coletta & Company

These authors have co-produced a first-of-its-kind study that identifies where talented 25 to 34 year-old workers are moving in America and why. The ability to attract and retain these “Young and Restless” Americans is a critical factor in a city’s ability to succeed in the knowledge economy. This website describes this demographic and provides reports on the status of Y&R attraction for several American cities.

Innovation Policy


Social Capital, Innovation and Growth: Evidence from Western European Countries

I. Semih Akçomak and Bas ter Weel, MERIT

This paper investigates the interplay between social capital, innovation and economic growth in the European Union. The paper identifies innovation as an important mechanism that transforms social capital into economic growth. In an empirical investigation of 102 European regions in the period 1990-2002, the authors show that higher innovation performance is conducive to economic growth and that social capital affects growth indirectly by fostering innovation. The estimates suggest that there is only a limited role for a direct effect of social capital on economic growth.

Global Flows of Talent: Benchmarking the United States

The Information Technology and Innovation Foundation

This report benchmarks flows of highly-skilled people to the United States against similar flows to seven other high-income countries: Australia, Canada, France, Germany, Japan, New Zealand, and the U.K. The report finds that while many other nations are making it easier for talented immigrants to enter their country, either as students or workers, the United States is struggling to decide what to do. The report then compares how national immigration policies – permanent, temporary, and student – foster or constrict these flows. All seven nations in the comparison group are liberalizing their immigration policies for the highly-skilled, although some more than others. Finally, the report suggests several broad policy recommendations that the United States should consider to ensure that it not only compete effectively for talent in the short-term, but also lead the world toward a global system for developing and using talent that is beneficial for everyone over the long-term.



Cities, Clusters & Regions

The Vital Center: A Federal-State Compact to Renew the Great Lakes Region

John Austin and Britany Affolter-Caine, The Brookings Institution

Despite its long leadership in manufacturing and business, assets like major universities, and abundant natural amenities, the Great Lakes region’s industrial legacy has left it struggling to develop the human capital, entrepreneurial culture, and dynamic metropolitan regions needed to compete in the global economy. This report examines the region’s challenges, and calls for a new federal-state compact around a series of educational, economic, social, and infrastructure initiatives that can help the region reassert its global economic leadership.


Statistics & Indicators


Small Business Survival Index 2006

Small Business and Entrepreneurship Council

This index ranks the 50 states and District of Columbia according to some of the major government-imposed or government-related costs affecting investment, entrepreneurship, and business. The factors consider range from a wide variety of tax mechanisms, health care policies, cost of living, crime rates, and much more. The Small Business Survival Index provides a measure by which states can be compared according to how the state and local governments treat small business and entrepreneurs. In essence, it is a comparative measure of economic incentives relating to government policies: the lower the Small Business Survival Index number, the greater the incentives to invest and take risks in that particular state.

Competitiveness Index: Where America Stands

Council on Competitiveness

The U.S. has stimulated export-led growth around the world while continuing to attract the largest share of foreign direct investment. The total stock of foreign direct investment in the U.S. is now $1.6 trillion, about twice that of the next largest recipient and more than six times as much as China. Between 1986 and 2004, the U.S. received more annual flows of foreign direct investment than any other country in the world. However, this expansion has been funded primarily through rapidly increasing foreign debt, coupled with high consumption and a return to federal budget deficits, the report cautions. Such imbalances should raise warning flags for the future of American competitiveness and global economic stability, which the study discusses in depth. The report benchmarks two decades of U.S. economic data against emerging global economies. It confirms the U.S. has among the highest levels of productivity and standard of living, making it the most globally competitive among the world’s large economies.


Policy Digest

This issue marks the introduction of a new section, the Policy Digest, which summarizes the key policy implications of a recent piece of innovation-related research or policy report.

Here or There? A Survey of the Factors in Multinational R&D Location

Thursby and Thursby, National Academies Press

The primary goal of this study is to identify and rank in importance the factors that affect firm decisions on the location of research and development (R&D) facilities. The survey of this issue was originally proposed by the Government-University-Industry-Research Roundtable (GUIRR) of the U.S. National Academies out of a concern that policy discussions be informed by empirical data rather than anecdote. This document is the result of a survey of over 200 multinational companies across 15 industries with head offices in either the United States or Western Europe. Nearly 90 percent of the respondents have R&D facilities located outside of their country of origin, and for roughly 20 percent of the firms more than half of their technical employees are located abroad. The results of the survey confirm the dominant arguments in current innovation and firm-location literature. That is, that the quality of human capital and the depth of local talent are the primary drivers of location decisions in developed markets.

The responses to survey questions regarding the location of current or planned R&D facilities contravene the notion that these facilities are increasingly being located in developing economies (such as India). Overwhelmingly, US firms are more likely to invest in Western Europe than in an emerging market, and vice versa. However, when asked about planned facilities, there is evidence of a small, but significant, movement towards the developing economies. This result leads the authors to conclude that ‘in the near future’ there will be an expansion of R&D activities into developing markets, with a corresponding contraction in developed economies. Significantly, over 75 percent of respondents indicated that the R&D facility under discussion was part of an expansion in R&D activities, rather than a relocation of R&D. According to the results, more relocation occurs within the home country than towards other countries.

The factors that affect the decisions regarding R&D location are quite complex and often vary depending on whether the site is in a developed or developing economy. Regardless of R&D location, four factors stand out: output market potential, quality of R&D personnel, university collaboration, and intellectual property protection. The most important driving factor for firms locating in developing economies is the growth potential of the market, followed by the quality of R&D personnel. Tied for third place were costs (net tax breaks), expertise of university faculty, and ease of collaboration with universities. The quality of intellectual property protection in these economies tended to be a detractor.

In developed economies both the quality of R&D personnel and the quality of IP protection were cited as the most important locational factors. The expertise of university faculty and the ease of collaboration with universities also ranked high on the list of driving factors. Policy makers can draw some important lessons from these results. First, it is clear that the quality of inputs is the most significant determinant of R&D location decisions. Therefore, while costs (i.e. taxes) may be higher, developed economies still have a comparative advantage in R&D because of the quality of personnel. This is also significant insofar as developed economies compete with one another for R&D facilities. These results suggest that the ‘winners’ of the R&D location contest will be those countries (and the jurisdictions within them) that can maintain a superior quality of talent in both the private and public research sectors.

This study provides valuable evidence to support policy makers in their effortss to attract and retain R&D facilities by opening a window into the location decisions of R&D intensive multinational firms. While it suggests that developed economies still have an advantage over developing economies in this arena, this advantage is not guaranteed over the long term, nor can it be maintained without strategic investments and interventions.


DRUID-DIME Academy 2007 PhD Winter Conference on Geography, Innovation and Industrial Dynamics

Aalborg, Denmark, 25-27 January, 2007

The conference is open for all PhD students working within the broad field of “industrial dynamics”. The conference is organized by the DRUID Academy for doctoral education and training in collaboration with the EU 6th Framework Network of Excellence DIME Consortium. The event will take place in Denmark on January 25-27, 2007. All doctoral students who wish to present a paper at the DRUID-DIME Academy Winter 2007 Conference must submit an extended abstract (minimum 1000 words; maximum 2000 words) before the deadline of November 6, 2006 through the conference website.

Research Incentives: Maximizing Performance in the Knowledge Economy

Ottawa, 7 March 2007

As Canada continues to cope with the globalization of the knowledge economy, Canadian firms are facing stiff competition from an increasing number of players. They also have more opportunities for global sales, marketing and distribution; and global collaboration, partnerships and outsourcing. For Canada to remain competitive, we need a policy environment that is attractive to entrepreneurs and firms in knowledge-based sectors. What kinds of research and innovation incentives will effectively support the growth of knowledge-based firms in Canada? There are clear choices, including tax measures, the programmatic approach, grants (like the US model), technology transfer from publicly-funded institutions, improving the general business environment. What mix of incentives will the new government in Ottawa choose? How will these choices affect existing programs and policies? What role do different levels of governments have to play and how can they coordinate and focus their efforts? How are other countries using research and other incentives to grow their knowledge-based sectors? This one-day event will explore these and other issues related to research and innovation incentives. Business leaders and other experts will elaborate how Canadian policy makers can utilize incentives to support a vital and growing private sector capable of winning globally.


Regions in Focus

Lisbon, Portugal, 2-5 April, 2007

This event by the Regional Studies Association will take place in Lisbon. Many topics will be discussed such as: developments in regional economics and spatial analysis; tourism, regional development and sustainability; knowledge, competition and cohesion; creativity, innovation and cultural economy, and global challenges for manufacturing and services.

Hydrogen Fuel & Fuel Cells 2007: International Conference and Trade Show

Vancouver, 29 April – 2 May, 2007

Today’s energy challenges have no boundaries. Energy security, climate change, and clean air concerns challenge communities around the world. International research, business and policy collaborations are ensuring that technologies, such as hydrogen and fuel cells, will provide a sustainable future for generations. This conference and trade show will highlight these global activities and developments. Canada, and particularly Vancouver, boasts unrivalled hydrogen and fuel cell expertise. Don’t miss out on the chance to explore BC’s Hydrogen Highway, experience the latest in hydrogen and fuel cell innovations and visit the most advanced hydrogen and fuel cell research facility… the National Research Council’s cutting-edge Institute for Fuel Cell Innovation.


The 16th International Conference on Management of Technology: “Management of Technology for the Service Economy”

Miami Beach, Florida, 13-17 May, 2007

IAMOT 2007 will provide an international technical forum for experts from industry and academia to exchange ideas and present results of ongoing research in the following tracks: Knowledge Management, Green Technologies, Social impact of technology development . MOT Education and Research / Corporate Universities . New Product/Service Development . National and Regional Systems of Innovation . Small and Medium Enterprises . Emerging Technologies . Technology Transfer, Marketing and Commercialization . Technology Foresight and Forecasting . Information and Communication Technology Management . The Integration of Technology and Business Strategies . R&D Management . Project and Program Management . Industrial and Manufacturing System Technologies / Supply Chain Management . New Forms of Organizations . Management of Technology in Developing Countries . Technological Alliances, Mergers and Acquisitions . Theory of Technology . Technology Incubation . Management of Technology for the Service Economy . Innovation/technological development and productivity


Triple Helix VI – Emerging Models for the Entrepreneurial University: Regional Diversities or Global Convergence? 

Singapore, 16-18 May, 2007

Organized for the first time in Asia, Triple Helix VI 2007 will provide a global forum for academic scholars from different disciplinary perspectives as well as policy makers, university administrators and private sector leaders from different countries to exchange and share new learning about the diverse emerging models of the entrepreneurial university, the changing dynamics of University- Industry-Government interactions around the world and the complex roles of the university in local, regional and national economic development.

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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.