The IPL newsletter: Volume 7, Issue 142

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.



McGuinty Government Continues to Invest in Ontario’s Innovation Economy

The McGuinty government is strengthening Ontario’s economic advantage by investing in world-class research and development at 15 institutions in communities across the province. The government is investing close to $11 million to support 68 leading projects in this fourth round of the Ontario Research Fund – Research Infrastructure program. The initiative helps researchers obtain the tools they need to stay on the cutting-edge of innovation, including lab equipment and computer software. Under the Ontario Research Fund – Research Infrastructure program, the Ontario government has invested $131 million in 551 research infrastructure projects to date.

The University of Toronto to Benefit from CFIs Computer Investment

U of T researchers — and university researchers across the country — will benefit from a major investment in high performance computing announced Dec. 21 at the University of Toronto by the Canada Foundation for Innovation (CFI) and the Natural Sciences and Engineering Research Council (NSERC). The agencies announced a total of $88 million in funding for seven high-performance computing facilities that will co-operate to form a pan-Canadian network set to revolutionize the way research is conducted. The CFI awarded $60 million for high performance computing infrastructure and $18 million to assist with operating and maintenance costs. NSERC will contribute a further $10 million to help fund operating costs.

Editor's Pick

Building Science, Technology and Innovation Indicators: What We Can Learn from the Past

Chris Freeman and Luc Soete, MERIT

The science-technology-innovation system is one that is continuously and rapidly evolving. The dramatic growth over the last twenty years in the use of science, technology and innovation (STI) indicators appears first and foremost the result of a combination between on the one hand the easiness of computerized access to an increasing number of measures of STI and on the other hand the interest in a growing number of public policy and private business circles in such indicators as might be expected in societies which increasingly use organised science and technology to achieve a wide variety of social and economic objectives and in which business competition is increasingly based on innovation. As highlighted on the basis of 40 years of indicators work, frontiers and characteristics that were important last century may well no longer be so relevant today and indeed may even be positively misleading.

Innovation Policy


Promoting Opportunity and Growth Through Science, Technology and Innovation

Jason E. Bordoff, Michael Deich, Rebecca Kahane, and Peter R. Orszag, The Hamilton Project

Americans are facing heightened economic pressures from the effects of globalization as workers from China, India, and other developing nations play a growing role in the world’s economy. Advances in technology and transportation now mean that U.S. workers increasingly are competing with workers overseas—not just in manufacturing, but also in high-skill and high-wage sectors. Growth in information technologies, in particular, has facilitated deeper integration of economies across the globe while also posing both new opportunities and new challenges for the U.S. economy. Maintaining the US’ economic leadership in the world and promoting broad-based growth at home will require effective policies to support research, innovation, and access to advanced information and telecommunications technologies. This paper provides the arguments that support this position, as well as proposals to maintain leadership in science, technology and innovation.


Science and Innovation: Making the Most of UK Research


This publication demonstrates, through a selection of examples: how the academic community and businesses in the UK have worked together, how they have risen to new challenges, and how they have been able to build upon each others’ strengths to produce
new and innovative products and services that have a significant impact on the UK’s economy. The collaboration between researchers and business takes many forms, including; the people who emerge from their excellent research base, greater responsiveness of the research base to the needs of the economy, and increased business investment and collaboration.

Cities, Clusters & Regions

Resurgent European Cities?

I. Turok and V. Mykhnenko

Cities have been recognized for several decades as the places within Europe typically facing the greatest economic and social problems. In contrast, a much more positive view of cities has emerged recently, identifying them as sources of economic dynamism and growth. The paper offers evidence from across Europe to assess whether the fortunes of cities have improved, both in relation to their past trajectories and relative to smaller urban and rural areas. The key indicator is population change. The main finding is that one in seven cities can be described as resurgent, but these are greatly outnumbered by cities that have experienced continuous growth and by cities that have suffered a recent downturn. Taking a long-term view, the absolute and relative position of cities generally appears to have deteriorated over the last few decades. But a short-term perspective suggests something of a recovery within the last five years. Growth and resurgence are more common in Western Europe and decline is more widespread in the East. The position of larger cities has also improved slightly relative to smaller cities.

Building Successful Cities: Lessons Learned from the UK

Conference Board of Canada

This briefing examines the United Kingdom’s experience in crafting coherent and comprehensive strategies for building successful cities. It looks at national and local solutions—developed and implemented in spite of the lack of local governance autonomy—to the challenges facing its major cities. The level and quality of urban regeneration now underway in the U.K., and the optimism and confidence that accompany this regeneration, show how political and community backing can propel the urban agenda forward. Key lessons for Canada focus on developing partnerships, investing in gateway cities, recognizing the importance of local leadership and developing a national policy focus on major cities.


The Rise of Knowledge Regions: Emerging Opportunities and Challenges for Universities

Sybille Reichert

This essay tries to describe the emerging phenomenon of the proactive knowledge region by looking closely at the processes of its development, at the key actors and their interactions, as well as at the role of the university in this development. It also aims to investigate how knowledge institutions and their networking are motivated, supported, developed and adapted at regional level.


Statistics & Indicators

Measuring the Moment: Innovation, National Security, and Economic Competitiveness

The Task Force on the Future of American Innovation, a private consortium of leading industry and academic organizations, has a released a new report that assesses America’s future innovation capacity. Measuring the Moment: Innovation, National Security, and Economic Competitiveness is a benchmarking exercise designed to assess how America stacks up on key measures of research investment, knowledge creation, and the development of critical industries such as biotechnology, semiconductors and information technology. The report’s main findings are similar to other recent studies from the National Research Council and the Council on Competitiveness. While the US economy has many strengths, it also faces serious long-term challenges in its educational systems and in its future ability to attract and retain talent.

All of these findings are particularly important given that:

  • Fastest-growing economies continue to increase their R&D investments rapidly, nearly five times the rate of the United States: The countries of China, Ireland, Israel, Singapore, South Korea and Taiwan collectively increased their R&D investments by 214 percent between 1995 and 2004. The United States in that period increased its total R&D investments by 43 percent.

  • United States falls in rankings of percentage of GDP spent on R&D: The United States was passed by three countries between
    1991 and 2004 in the percentage of GDP spent on R&D, dropping it from second behind Japan to fifth behind Israel, Finland, South Korea and Japan.

  • U.S. share of S&E publications continues to shrink: In the first Benchmarks report, it was reported that the U.S. share of worldwide science had shrunk from 38 percent in 1988 to 31 percent in 2001.The 2003 data reveal that the number continued to decline, due largely to increased Asian output.

  • More R&D facilities are being located abroad: In a large survey of several industries in the United States and Europe, 48 of 235 recent
    or planned R&D facilities were located in the United States, 55 in China and 18 in India.


    The benchmarks elaborated in the report demonstrate America’s historical strength in science and technology, but they also reveal
    the impact of earlier decisions about the federal investment in basic research in physics, mathematics, engineering, chemistry and computing. The benchmarks demonstrate how inadequate investment has helped to set in motion an erosion of American leadership in science, in turn jeopardizing the foundation upon which future economic and national security will be built.


Policy Digest

OECD Territorial Review: Competitive Cities in the Global Economy


The report studies the 78 largest metro-regions in the OECD, ranging from Tokyo with close to 35 million inhabitants to Auckland with about 1.5 million. The OECD average is just over 5 million. Of the 25 wealthiest cities, as measured by GDP per capita, 22 are in the United States and the others are London (in 13th place), Paris (18th) and Dublin (23rd).

Successful cities attract talented young highly-skilled workers, are centres of innovation and entrepreneurship and are competitive locations for global and regional headquarters. The proximity of universities to research and production facilities means cities are where new products are developed and commercialized. More than 80% of patents are filed in cities.

However, cities are not always synonymous with success. Cities can falter. Berlin, Fukuoka, Lille, Naples, and Pittsburgh perform below the national average for income, productivity, skills, and employment. And there is some evidence that mega-size cities – those more than 7 million people such as Seoul, Mexico City, Istanbul and Tokyo – have outgrown the economies of scale normally associated with cities.

This report argues that there is no ‘one size fits all’ policy for cities. But the report makes recommendations that can be tailored to meet specific needs. These cover a wide range of policy “dilemmas” identified in the report. The combination of economic advantages and difficulties posed by the rise of metro-regions present a number of strategic choices that confront policy-makers. Large cities have acquired growing economic and demographic importance, and function as the key loci of transnational flows on the international market. Yet, large cities are also associated with negative externalities, such as congestion, pollution, social segregation or high crime rates. These trends raise issues about the long-term sustainability of urban regions. The following “dilemmas” and proposals, address some of these key issues.

1. The Impact of Metro Areas

This report examines some of the supposed effects of large urban agglomerations on society and the economy. For example, it finds that:

  • The causal relationship between levels of urbanization and per-capita income growth are not clear – that is, creating larger cities does not necessarily lead to growth in per capita prosperity. Although, larger urban agglomerations tend to have greater internal diversity, making them more likely to foster innovation.

  • The impact of metro areas on the rest of the country is not clear – While cities may generate wealth and positive externalities, they may also drain other areas of key resources (such as talent).

  • Reconciling national and dominant-region interests can be a positive sum game – the redistribution of wealth from dominant to flagging regions in the form of subsidies often misses the mark. Regional strengths should be supported to create diverse specializations.

  • Synergies can be created by building networks between cities and other regions.

2. Policy Approaches

This section examines the extent to which policy makers can contribute to a comprehensive strategic vision for their metro regions without playing a direct role in economic planning at the local level. The report finds that:

  • A strategic vision is required – Cities must constantly reinvent themselves in order to maintain prosperity. This requires a long-term vision, and partnerships that extend beyond the urban region.

  • A diversified cluster approach could help limit risks – a strategic vision should support diversity and encourage a wide range of cluster initiatives. However:

  • Cluster strategies should be tailored to each metro area – a cookie cutter approach to every metro area ignores local distinctiveness, strengths and weaknesses. There is no one magic policy that will accommodate every city.

  • Clusters require a diversity of local ‘public goods’ – Policy should focus on diversifying and constructing local public goods. For example, transportation networks (roads, public transit, rail, air etc.) should be made more efficient. Other interventions can be sector specific. It is worth noting that strong clusters rely on diversity in public research infrastructure, instead of just one strong institution.

  • Not all metro areas will succeed in high-tech – therefore, each strategic vision should seek out local advantages and global niches.

  • Public policy should involve a wide variety of actors – and should focus on identifying key local actors, networks and associations to help shape and implement local policies.

3. Environment and Sustainability

What choices should policy makers be aware of? The report argues that:

  • A good and attractive environment may not be an alternative to economic success – but can contribute to it. There is no clear evidence that higher tax rates that help maintain positive environmental conditions deter firms from investing in a region. Locational factors that influence firm location include environmental attractiveness.

  • The timing of investment is important – For example, delaying transportation decisions can cause years of congestion costs.

  • Urban renaissance strategies also contribute to attractiveness and livability – New projects in the inner city can increase the attractiveness of cities lacking historical interest, while preservation and restoration can enhance the character of historical assets.

  • Attractiveness is key to attracting FDI – low taxes are not the only consideration to firm location, and there are several examples of highly successful cities with high tax rates (i.e. Stockholm and Helsinki). Low tax incentives may attract certain firms, but these may just as easily leave without having made any long term improvement to the local economy.

  • Poverty and spatial polarization are the most difficult challenges – success of metro regions depends not just on environmental and physical attractiveness, but also on social cohesion. The effectiveness of policies that address the former depends on the strength of the latter. Specific policies are necessary to improve social cohesion and reduce polarization. But:

  • Policies that address distressed neighborhoods have had mixed outcomes – effective policies to address social cohesion require real committment of state actors, and innovative approaches. Effective and sustained leadership and visionary thinking by public actors is critical to the success of these social policies – it is not just a question of money.

4. Governance

Should policies aim to create authority at the level of the functional urban region, or as close to citizens as possible? The report discovers that there are:

  • A wide variety of governance models – the most radical of which involve large scale institutional reorganization. However, more informal, and less disruptive, approaches do exist.

  • Different models have different trade offs – flexibility, efficiency and authority are issues that need to be considered in each case. Where it may be easier and faster to get things done, as well as easier to coordinate and monitor, in formal regional institutions, cooperative mechanisms can be more efficient and responsive.

  • Public support and legitimacy will determine the success of a reform – Models that are imposed may lead to confrontation and undermine the goals of the reform. Most successful reforms are those where the localities and public are supportive, or have helped to shape the form of new institutions.

  • The participation of local actors is essential – to deal with social conflicts and relieve tensions. The levels of government closest to the citizens must be capable of assuaging local concerns. The devolution of finances and responsibilities can help ensure that development reflects local character and encourage participatory democracy.

5. Intergovernmental Relations

Strengthening the local level may lead to the potential for intergovernmental conflict. While this may be the case, it is clear that:

  • Higher levels of government are essential to building metropolitan cooperation – only rarely have initiatives for local government reforms come from the local level. National and state/provincial levels have been critical in imposing or encouraging reform, and often help provide the legal basis that support legitimacy.

  • New tools of vertical relations between governments are being developed – in particular, legal measures that help support contracts between municipalities. These are most effective when supported by negotiations that involve multiple levels of government, and encourage collaboration.

6. Funding

Metro areas require significant infusions of money to encourage and maintain development. However, these can lead to inequalities. It is important that policy makers realize that:

  • The specific challenges of metro regions require an urban lens on local public finance – Local taxation systems must be adapted to local responsibilities. Underfunding can result in the deterioration of the local infrastructure and environment. On the revenue side, municipalities should have sufficient autonomy to determine tax levels and priorities. On the expenditure side, the assignment of responsibilities should be appropriate to the level of government and resources available to support them.

  • Equalization may have perverse effects – and create disincentives at the local level, rather than encouraging metropolitan development and equality.

Rethinking national urban strategies:

The above analysis outlines some of the key issues that policy makers must consider in developing national urban strategies. What is clear, in this report, is the importance of metro regions to national prosperity, as well as the necessity for greater visibility for urban issues on the national and regional levels.


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.


Health Research: The 21st Century’s Prosperity Engine (OCE Mind to Market Breakfast Series) 

Toronto, 27 January, 2007

From photodynamic therapies to nanotech diagnostics, the research underway at UHN offers enormous opportunity for Ontario companies. Research hospitals are a critical driver of economic benefits to the province’s economy. They improve the quality of our health care and its delivery, and attract and retain leading scientific talent. Join Dr. Bob Bell as he considers the way commercialization of biomedical research is not only bringing to light better treatments and better detection, but is also improving the economic health prospects of the province.


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.


Commercializing Photonics Technology (OPTICS Annual Members Meeting) 

Hamilton, 26 March, 2007

The Government of Ontario recently announced that it will spend $300M for commercializing university science. Your local photonics cluster, OPTIC, is getting a share of this. This year’s AMM is your opportunity to let us know how you?d like to see OPTIC spend its new resources. Representatives from OPC, CPFC, INO and OCE will also be there to talk about how they can help you commercialize new science and technology.


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.


BioFinance 2007 

Toronto, 24-27 April, 2007

BioFinance 2007 is a gathering of some of the most innovative minds in the lifescience industries featuring presentations by senior management from more than 100 Canadian, US and European lifescience companies. The range of participating firms includes large publicly traded and major private companies as well as early-stage opportunities. The companies will highlight their development plans for new medicines and technologies in the fields of cancer, cardiology, medical devices, neuroscience, immunology, genomics, diagnostics and new research tools. BioFinance 2007 will feature a CEO Forum to address specific financing and management issues relevant to Chief Executive Officers in life science companies. It will also have specialty panels on topics including access to public markets in the US and Europe, investing in medical technologies, pharma-biopharma deals and early stage venture financing from private and public sources

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.


Toronto Technology Week 

Toronto, 28 May – 1 June, 2007

Toronto’s Information and Communication Technology (ICT) industry cluster will come together to celebrate being the largest high-tech hub in Canada and the third largest in North America. During this event a series of activities will be undertaken to showcase the depth and breath of Toronto’s high technology sector. These will include trade associations’ events such as seminars and business networking functions, job fairs, collaboration demonstrations, an ICT business open door program, school projects, educational seminars, special exhibits showcasing innovation & excellence and other ICT sector- related activities. An organizing committee formed by ICT industry stakeholders
representing a cross-section of this industry, in both the private and public sectors, has been formed to implement this initiative


Atlanta Conference on Science, Technology, and Innovation Policy 2007 
Atlanta, October 19-20, 2007

The landscape of global innovation is shifting, with new problems and actors emerging on the scene. National governments are looking for new strategies, and they are turning to the science, technology, and innovation (STI) policy research community for models and research results to tell them what works and what doesn’t, under what circumstances. The Atlanta Conference provides an opportunity for the global STI policy research and user communities to test models of innovation, explore emerging STI policy issues, and share research results.

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