News from the IPL
INTRODUCTION
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.
ANNOUNCEMENTS
The America Competes Act signed by President Bush recently will help maintain and strengthen America’s position in the global marketplace and pre-eminence in science and technology. On the bill’s passage, the presidents of the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine thanked Congress, the many public policy and business groups who highlighted the urgent need for action, and the National Academies committee that contributed key recommendations in its report Rising Above the Gathering Storm.
Ontario Funds Gaming Tech Degree to Spur Economy
The government of Ontario approved a grant to help local Algoma University College establish the first academic program in computer gaming in Canada. The $250,000 grant from the Northern Ontario Heritage Fund Corp. will be used to hire an advisor to establish a computer gaming technology center. The ultimate goal is economic, its sponsors said: to help graduate students in gaming technology connect with the private sector to see their projects to commercialization.
Editor's Pick
National Innovation System: The System Approach in Historical Perspective
Benoit Godin, Project on the History and Sociology of S&T Statistics
In the late 1980s, a new conceptual framework appeared in the science policy literature: the National Innovation System. The National Innovation System framework suggests that the research system’s ultimate goal is innovation, and that the system is part of a larger system composed of sectors like government, university and industry and their environment. The framework also emphasized the relationships between the components or sectors, as the “cause” that explains the performance of innovation systems. Most authors agree that the framework came from researchers like C. Freeman, R. Nelson and B.-A. Lundvall. This paper goes further back in time to show what the “system approach” in science policy studies owes to the OECD and its very early works from the 1960s. This paper develops the idea that the system approach was fundamental to OECD work and that, although not using the term National Innovation System as such, the organization considerably influenced the above authors.
Innovation Policy
On the Road to an Entrepreneurial Economy: A Research and Policy Guide
Kauffman Foundation
Among the factors contributing to the success of the U.S. economy over the past decade—as reflected in the doubling of productivity growth compared to the preceding two decades—is the continued transformation of the U.S. economy toward a more entrepreneurial form of capitalism. In such a system, innovative new firms play an unusually central role in developing and commercializing the radical technologies that provide the underpinnings to whole new ways of doing things and enjoying life. In the last century, innovations which have changed the social and economic landscape in the United States and in much of the rest of the world, such as the automobile, airplane, air conditioner, the personal computer and its operating system, and, most recently, many of the leading Internet-based business models, all were commercialized by entrepreneurs. The United States and other countries face daunting challenges in this century. Aging populations and the retirement and medical needs they require, global warming, and new security concerns—to name just a few—all demand the resources that can come only from continued rapid economic growth. Economic growth, in turn, will require continued entrepreneurial innovation. Ideally, much of that innovation and entrepreneurship will take place here in the United States, where it historically has occurred. This paper outlines the challenges and opportunities that face the U.S. economy .
Upgrading Canada’s National Innovation System: More than Money Required
Guy Stanley, Policy Options
Despite a generation of programs designed to free up factor mobility and improve pricing efficiencies in the economy, Canada’s output mix is not evolving as fast as those of our trading partners’. As a result our prosperity growth is faltering. Canada has the elements required to be successful, but the elements are working at cross purposes. Canada needs to (1) regroup science and technology funding at the federal level to promote innovation more systematically, and (2) create a federal innovation organization to improve accountability and coherence, patterned on Tekes, the Finnish agency that oversees Finland’s national innovation capacity.
What is Business Development? The Case of Biotechnology
Sonja Kind and Dodo zu Knyphausen-Aufsess
‘Business development’ is an often used, but not well defined term in the business world. Take a strategy-as-practice perspective as a background, this paper explores the daily activities of business development in the German biotechnology industry. The paper shows how these tasks are defined and fulfilled, what resources are used and how development is organized. These results are compared to insights from the strategic management literature and show that business development is an example of what a modern type of planning might look like. However, it may be misleading to see this function in botech firms in the same way as the dynamic capability literature assumes. This analysis contributes to an understanding of how biotechnology ventures operate, and how they do their organizing and strategizing.
Exploring Technological Innovation in Health Systems
Gabriela Prada, Paul Santaguida, Conference Board of Canada
This report underscores the importance of technological innovation in Canada’s health system and sheds considerable light on its current state. The authors use the Conference Board of Canada’s Innovation Framework to analyze our innovation environment, providing a snapshot of where Canada stands compared to Organisation for Economic Co-operation and Development (OECD) countries with high-performing health systems. After describing the Framework and its six components (environment; creation, diffusion, transformation and use of knowledge; and value), the report moves on to provide an overview of how Canada performs in each category, measured against the 12 OECD comparator countries. The analysis exposes strengths and weaknesses—some of which are glaring—and offers fact-based recommendations to help Canada develop the higher quality, more efficient and safer health system that is more imperative than ever, given current and potential challenges.
Are Firms that Receive R&D Subsidies More Innovative?
Charles Berube and Pierre Mohnen, UNU-MERIT
This paper looks at the effectiveness of R&D grants for Canadian plants that already benefit from R&D tax credits. Using a non-parametric matching estimator, the paper finds that firms that benefited from both policy measures introduced more new products than their counterparts that only benefited from R&D tax incentives. They also made more world-first product innovations and were more successful in commercializing their innovations.
Cities, Clusters & Regions
Understanding the BC Hydrogen and Fuel Cells Cluster
Adam Holbrook, David Arthurs, and Erin Cassidy
In 2005 the National Research Council of Canada commissioned a study of the hydrogen and fuels cells cluster in Vancouver. This study looks at the cluster using a structured approach that tests clusters against indicators of current conditions and current performance. It includes the results of an extensive interview program and survey of professionals in the field, both within the cluster and elsewhere. The results give a clear picture of a cluster that has two major components – hydrogen based industries and fuel cell technologies, which are both global in reach and potential.
State and Local Governments: Persistent Fiscal Challenges Will Likely Emerge in the Next Decade
United States Government Accountability Office
This report argues that an expected explosion of health-related expenditures combined with no new policy changes will likely result in fiscal challenges for state and local governments within the next decade. The result could put downward pressure on public funding available to support TBED initiatives. The expected continued rise in health care costs poses a fiscal challenge not just to government budgets, but to American business and society as a whole, according to the report. Using data from the National Income and Product Accounts, GAO ran long-term simulations extending until 2050 that indicate the combined effects of demographic changes and growing health care costs drive increasing federal deficits and debt levels. GAO’s fiscal model of the state and local sector projects the level of recipients and expenditures in future years based on historical spending and revenue patterns. Findings of the simulation indicate that two types of state and local expenditures will rise quickly because of escalating medical costs: Medicaid expenditures and health insurance for state and local employees and retirees. Conversely, other expenditures such as wages and salaries of workers, pensions and investments in capital goods are expected to grow slightly less than gross domestic product.
Oregon Innovation Council
The state of Oregon has recently adopted an interesting plan designed to boost innovation. The new Oregon Innovation Plan focuses on supporting place-based innovation capacity. It proposes to spend roughly $38 million to support initiatives in three areas: enhancing the competitiveness of existing industry, improving technology commercialization, and increasing the state’s overall capacity for innovation. Among the Plan’s specific recommendations are the creation of new angel networks across Oregon; the opening of new research centers for wave energy technology, nanotechnology, and drug discovery; and extensive new efforts to support existing firms in the manufacturing, food production, and seafood industries.
Statistics & Indicators
University Entrepreneurship: A Taxonomy of Research
Frank T. Rothaermel, Shanti D. Agung and Lin Jiang, Kauffman Foundation
The report surveys and synthesizes the entire field of university entrepreneurship research over the past 25 years by analyzing all the academic journal articles published in the time period in great detail, and it derives an integrative framework to guide future research. University entrepreneurship denotes entrepreneurial activities of research universities, including, but not limited to: patenting and licensing; creating incubators, science parks and university spin-outs; and investing equity in start-ups, among other indicators. The report reveals that 173 articles have been published in 28 academic journals by 232 scholars over the 25-year period 1981-2005. However, the report shows that 127 of these articles were published in the six-year period 2000-2005, and a full 69 percent of these articles are authored by just 65 of these scholars. This increase in research – both domestically and abroad – largely corresponds to the growth of entrepreneurship education in universities around the world and, in particular, passage of the Bayh-Dole Act in 1980, which provided universities with incentives to patenting scientific breakthroughs accomplished with federal funding. Additional factors include the rise in the pool and thus mobility of scientists and engineers, and important technological breakthroughs in computing, biotechnology, and, more recently, nanotechnology.
Report on Interviews on the Commercialization of Innovation
Julio Rosa and Antoine Rose, Statistics Canada
For the past several years, Statistics Canada has been collecting information through surveys on innovation, research and development and more generally on science and technology. This study focuses more on the organizational aspects, and it seeks to provide information for answering the following question: once a company or organization has developed knowledge and a product or process, how does it go about generating benefits in terms of income, cost savings and strategic positioning?
Policy Digest
Globalization and Regional Economies
OECD
Given that many OECD regions are closely associated with industrial production and often with specific industries, rapid evolutions in economic structures cause concern among both policy makers and citizens in OECD countries. Issues such as delocalization, jobless growth, job insecurity and the replacement of high-wage, skilled production jobs with lower-wage service jobs are high on the political agenda in many OECD countries.
The key regional development issue for policy makers is the extent to which competitive manufacturing and related service industries can be developed outside the core regions in which they are currently concentrated. For example, while two of the regions included in this report (Eindhoven and Stockholm) are responsible for more than 200 patent applications per million each year, one-third of EU regions recorded less than one patent per million in 2000. Three-quarters of the US biotechnology industry is located in just five urban centres, even though 41 out of 50 US states have established significant funding programs to spur development of the life sciences industry.
Looking forward, the concern of policy makers is to understand how resilient regional economies are. For example, the ability of Ottawa and Stockholm to recover both output and employment lost during the ICT crisis is a sign of their adaptability, although in each case, the restructuring has fundamentally altered the nature of the activities carried out in the region. The performance of the major car manufacturing regions in Europe and North America – which are still strongly oriented towards production – will offer
more evidence of whether traditional sectors can be restructured as industrial locations, in spite of the concerns about the pressure of global competition. The response of the regions to these evolutions takes a variety of forms, some more explicit than others. In most cases, there is some form of regional economic strategy that includes within it a business development and innovation plan elaborated at either the regional or municipal level, often co-ordinated with a national level strategy that includes specific programs, instruments and funding.
The research suggests at least six main policy objectives that regions are aiming to achieve. These are closely inter-related and are often covered by the same program, but they highlight the different dimensions of regional competitive advantage that policy makers are trying to enhance and illustrate the main region-specific assets on which regional policy makers are building their strategies.
Policy Objectives and Regional Assets:
Supporting Firms:
Existing specialized firms – Here the objective is to broadening the customer base of specialized firms; reducing their dependence on MNEs, helping them to reach global markets.
Innovative small firms – Supporting small firms with technical facilities, linking them to venture capital and other finance, helping to create networks among small firms.
Multinationals – Embed certain functions/activities of MNEs in the region through stronger supply chains and a richer regional environment, support interaction between large firms and innovative small firms.
Improving the Regional Envionment:
Cross-over technology – Reducing dependence on single industry by identifying cross-over or enabling technologies; finding new applications for sector-specific technologies.
Regional innovation system – Promoting linkages between economic actors through co-location (science parks, etc.), strengthening the applied research dimension of public R&D facilities, supporting open innovation mechanisms.
Other measures of regional attractiveness – Infrastructure, ensuring that skills supply is appropriate, limit brain drain and try to attract skilled people.
Perhaps the most important role for regional strategies is to favour adaptation to change. While public actors are not well-placed to predict the future, they can play a clear role in developing an environment that supports private actors in their efforts to best adapt and seize opportunities. Tools are needed both to understand and monitor how their research and educational assets interact with enterprises with the goal of designing policies to help build more systematic linkages across all actors. To reinforce these strengths, the strategies could also seek to attract investment that complements the regional innovation system and taps into particular strengths (R&D, engineering, innovative firms, etc.). The region can help promote greater FDI spillovers and work to embed the strategic assets of firms in the region.
Events
Leading By Design: GTA Advanced Manufacturing Case Studies 
Toronto, 6 September, 2007
The Greater Toronto Marketing Alliance has conducted new research to explore the impact of design on advanced manufacturers based in the GTA. Join them, on September 6th to learn how three global companies have worked with local designers to add value to their products and brands.
ECKM 2007: The 8th European Conference on Knowledge Management
Barcelona, Spain, 6-7 September 2007
This conference invites researchers, academics and people from business who are involved in the knowledge management and intellectual capital initiatives to come together debate ideas and present their latest findings and ongoing research. In its 8th year, the conference will be held in Barcelona, Spain. Barcelona is the economic, cultural and administrative capital of Catalonia. Strategically located in the Mediterranean and acting as the hub of a polynucleate metropolitan region with 4.6 million inhabitants, it is a plural, multicultural and growing space of exchange in which individuals and organisations can devote to their own projects in a climate of dynamism, harmony and creativity.
Globally Competitive, Locally Engaged: Higher Education and Regions
Valencia, Spain, 19-21 September 2007
Higher education institutions (HEIs) can play a key role in their regions. They are significant regional employers, they educate students and conduct basic and applied research that promotes enterprise formation and supports businesses, public services and cultural institutions. OECD countries are now seeking to mobilize higher education to support more strongly their economic, social and cultural development. Initiatives to foster innovation and competitiveness draw on the “triple helix” cooperation between government, business and higher education institutions. In 2004, the OECD launched a comparative review of how higher education is being mobilised to support the social, cultural and economic development of regions. The experiences from this review and the earlier OECD work on territorial reviews, carried out by the Directorate for Public Governance and Territorial Development (GOV) are brought together in the OECD conference entitled “Globally Competitive, Locally Engaged – Higher Education and Regions”. A report under the same title will be launched at the conference.
NRC Connections 2007: The Technology Cluster Advantage in Canada
Toronto, 24-25 September, 2007
Cluster stakeholders from the private sector, all levels of government, universities and industry associations will convene in Toronto to discuss: SMEs – Surviving and Thriving in the First Five Years; Innovating to Succeed – Making R&D Collaborations Work; Making Things Happen, Staying Focused and Steering the Cluster – Together; Building Networks – Across the Street, Around the World; Cluster Marketing and Brand Building to Attract Investment; Leadership Strategies for Cluster Success; And More…
Please join us for two days of dialogue, problem-solving and networking, to promote the nurturing and growth of technology clusters.
3rd International Conference on E-Government
Montreal, 27 – 28 September, 2007
Alongside the rise in e-Government provision comes a greater interest in the study of e-Government, from both a practical and a theoretical point of view. As controversy rages around issues such as e-Voting and identity cards, so academics and practitioners pick up the gauntlet of supporting or attacking these issues. Service providers too have their opinions to share. Much time and money is being spent in considering the best way forward and in examining what has been done well and what lessons can be learnt when things go wrong. This conference aims to bring evidence of the research being undertaken across the globe to the attention of co-workers and the wider community for the purposes of helping practitioners find ways to put research into practice, and for researchers to gain an understanding of additional real-world problems. The advisory group for ICEG 2007 therefore invites submissions of papers on both theory and practice in respect of the conference themes outlined below, from academics, government departments and practitioners in the public and private sector.
The Ecology of a Creative Community – 6th Annual Conference of the Creative City Network of Canada
Edmonton, 10-13 October, 2007
This conference will bring together municipal cultural planning and development staff from communities across Canada for professional development sessions, dialogue, keynote speakers, and networking opportunities. While the conference is primarily tailored to the needs of our members, registration is open to anyone wishing to expand their knowledge in the cultural planning and development sector.
The Role of Universities in Regional Development and Growth
Cambridge, UK, 12 October, 2007
Over the past six years, Cambridge University and the Massachusetts Institute of Technology have explored new ways in which universities, working with industry and other stakeholders, might help to enhance the productivity, competitiveness and entrepreneurship of the UK. In the coming months, The Cambridge-MIT Institute is running a series of workshops presenting CMI case studies alongside examples from other organisations, in order to share lessons learned and provide insight into effective practices that successfully impact productivity, competitiveness and entrepreneurship. The purpose of this workshop is to understand how information and knowledge is diffused within the business community and transferred between universities and firms, and how these processes might be supported and enhanced. The workshop will bring together specialists from the business, policy and academic communities to provide insights on how regional knowledge exchange initiatives work and the role of universities in different spatial and economic contexts.
Transforming Regional Economies – SSTI Annual Conference
Baltimore, 18-19 October, 2007
SSTIs annual conference offers exposure to some of the best state and regional approaches for a brighter economic future, unrivaled networking opportunities with those in the TBED community, thoughtful exchange with peers from across the U.S. The SSTI annual conference promises quality. With more than 20 carefully planned sessions, conference participants are ensured access to the latest thinking and best practices in tech-based economic development. Limited attendance further affords one the opportunity to engage in open, creative dialogue, and registration fees are kept reasonable so you can send your entire leadership team. All added up, SSTI’s annual conference is the field’s most stimulating and rewarding professional development investment of the year.
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.
3rd International Conference on Services and Innovation
Dublin, Ireland, 7-8 November, 2007
The objective of this conference is to increase awareness and understanding of services innovation in a business environment and to: provide businesses (large and small), with practical steps and examples to develop innovation in services; help inform investors, researchers and policy makers about services innovation and learn about national and global developments and share practical experiences through case studies from established businesses.
Creativity, Entrepreneurship, and Organizations of the Future
Cambridge, MA, 7-8 December, 2007
Creativity is an essential element of success in contemporary organizations, yet much remains to be discovered about how creativity happens in the minds of individuals, in group processes and in entrepreneurial organizations. The conference will draw on scholarly work from multiple disciplines to deepen our understanding of creativity and entrepreneurship, and the ways in which their intersection might impact organizations of the future.
DRUID-DIME Winter Conference – Economics and Management of Innovation and Organizational Change
Aalborg, Denmark, 17-19 January, 2008
The conference is open for all PhD students working within the broad field of economics and management of innovation and organizational change. The conference organizers invite papers aiming at enhancing our understanding of the dynamics of technological, structural and institutional change at the level of firms, industries, regions and nations. DRUID is the node for an open international network. Confirmed invited senior scholars are: Maryann Feldman, University of Georgia; Reinhilde Veugelers, Katholike Universiteit Leuven; Paula Criscuolo, Tanaka Business School; Alfonso Gambardella, Università Bocconi; Gerry George, London Business School.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.