The IPL newsletter: Volume 8, Issue 160

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.

Annual Toronto Regional Innovation Gauge 2007

Toronto Region Research Alliance (TRRA)
In order to sustain and enhance the Toronto Region’s innovation performance, an accurate diagnosis of the current strengths and weaknesses of the region’s innovation system relative to key international competitor regions is necessary. To this end, the Toronto Region Research Alliance (TRRA) created the Annual Toronto Region Innovation Gauge (ATRIG), a yearly diagnostic of the region’s innovation performance, based on a range of internationally-accepted performance indicators drawn from the Index of the Massachusetts Innovation Economy (MA Index).

MetroNation: How US Metropolitan Areas Fuel Prosperity

Brookings Institution
The stakes are high as the United States approaches the 2008 Presidential election. Often unsettling forces are rapidly transforming the world and the rules that govern how families and communities thrive. These forces pose a series of historic challenges and opportunities for the U.S.: How does the American economy maintain its edge in the face of quickening competition abroad, and continued restructuring at home? How can the education and skills of workers grow, and secure more broadly shared gains from economic growth? How will the nation combat the threat from global climate change and achieve greater energy independence, given continued U.S. population growth? In short, the effort to secure American prosperity in the 21st century confronts a series of new realities.

This report argues that the ability of the U.S. to meet the great economic, social, and environmental imperatives of our time rests largely on the health and vitality of metropolitan areas. Yet U.S. metropolitan areas, for all their economic might, face a series of troubling challenges that hold back the country’s prosperity. Local and regional leaders across the U.S. confront a legacy of federal government policy maladapted to dynamic metropolitan realities. Along these lines, MetroNation draws the following conclusions:

1. New challenges to American prosperity have emerged. Profound changes in the global and domestic
economy present America with a series of historic challenges:

·         The U.S. economic powerhouse faces expanded global competition. Economic liberalization throughout the world, skills upgrades in developing countries and massive technological advances mean that the United States faces expanded competition for jobs and investment. China and India alone accounted for more than 40 percent of global economic growth from 2000 to 2005.

·         The domestic economy continues to restructure. The share of U.S. jobs in manufacturing has fallen from 31 percent to 10 percent over the past half century. Meanwhile, services employment has risen to two-thirds of all U.S. jobs. Accelerated offshoring in both sectors threatens to bring about economic dislocation or American workers and firms in the future.

·         The U.S. labor market has become more economically polarized. Wages for highly educated workers have risen considerably over the past 30 years, while those for less educated workers have stagnated or fallen. In part due to this polarization, the typical American family has not benefited from recent economic growth to the same degree as in previous
generations.

·         Demographic shifts portend new economic challenges. An aging workforce, combined with projected population increases among historically less educated groups, will test the nation’s ability to sustain its economic leadership, achieve rising standards of living for all, and provide for a growing retired population in the future.

2. America’s metropolitan areas are the engines of national prosperity. In a global economy marked by a highly competitive, interlinked network of major city regions, America’s efforts to extend prosperity depend more than ever on the success of its metropolitan areas:

·         True prosperity requires productive, inclusive, and sustainable growth. The U.S. must aspire and act to maintain its economic leadership, foster a strong and diverse middle class, and advance efforts to address climate change and achieve energy independence. These three growth goals are not mutually exclusive, and can actually reinforce one another.

·         Investments in innovation, human capital, and infrastructure help drive American prosperity. Strategic public and private investments in these core assets and in the quality places where they come together most forcefully contribute to productive, inclusive, and sustainable national growth.

·         America’s metropolitan areas aggregate its key drivers of prosperity. The 100 largest U.S. metropolitan areas contain 65 percent of the nation’s population and 68 percent of its jobs, but gather even larger shares of innovative activity (78 percent of U.S. patent activity), educated workers (75 percent of graduate degree holders), and critical infrastructure (79 percent of U.S. air cargo). As such, they generate three-quarters of U.S. gross domestic product. Their successes, and those of the nation’s smaller metro and rural areas, are inextricably linked.

·         Major metro areas strengthen key prosperity drivers. These metro areas possess agglomeration economies — geographic clusters of related firms and large pools of workers — that enhance productive growth. What is more, these economies foster the quality places — vibrant downtowns, attractive town centers, and historic older suburbs — that by virtue of their density and diversity help speed the acquisition of human capital, and contribute to resource-efficient sustainable growth.

3. To achieve American prosperity, a new federal partnership to promote metropolitan prosperity is needed. For all their aggregate strength, America’s metropolitan areas face a series of troubling challenges that hold back their collective prosperity. Their collective productivity growth rate has begun to slip, their college degree-earning pace has slowed, and their sprawling development patterns continue to fuel elevated greenhouse gas emissions. Yet our metropolitan leaders find our national government absent and adrift, largely unaware of the new economic, social, and environmental realities enveloping metropolitan America. A new partnership between federal, state, local, and private-sector leaders, a Blueprint for American Prosperity, is needed to help metropolitan areas innovate and prosper in a fast-moving, unpredictable world.