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
Two New Initiatives Aim to “Innovate” and “Accelerate” Wisconsin
Gov. Jim Doyle announced two new initiatives focusing on investments in manufacturing R&D and increasing angel and venture capital investment to grow new businesses. With the goal of remaining globally competitive, the governor’s new Innovate Wisconsin initiative offers tax incentives to encourage manufacturers to increase R&D. Specifically, the plan calls for new ‘Innovate’ tax credits that are given to companies who increase spending on R&D by 25 percent over their three-year average. Companies would receive a $1 tax credit for every $1 spent above this threshold, which is capped at 50 percent of its tax liability, according to the governor’s office. Additionally, the plan calls for machines and equipment used in manufacturing R&D to be exempt from sales and property tax Gov. Doyle also announced the creation of Accelerate Wisconsin, an initiative to encourage new start-up businesses through grants, loans and tax credits.
Waterloo Region Continues to Boast Strong Labour Market and Healthy Economy
Waterloo Region, known as Canada’s Technology Triangle, ranked in the top quartile of many of the key metrics, when compared to the 27 Canadian Census Metropolitan Areas (CMAs), as highlighted in the latest economic trend analysis released today by Canada’s Technology Triangle Inc. The report showed high employment and participation rates reflecting a healthy number of jobs, with Waterloo Region having the fourth highest participation rate and the fifth highest employment rate in the country.
Editor's Pick
Desmond Beckstead, W. Mark Brown and Guy Gellatly, Statistics Canada
This paper examines the growth of human capital in Canadian and U.S. cities. Using pooled Census of Population data for 242 urban centres, we evaluate the link between long-run employment growth and the supply of different types of skilled labour. The paper also examines whether the scientific capabilities of cities are influenced by amenities such as the size of the local cultural sector.
Innovation Policy
Innovation America: A Public-Private Partnership
US Chamber of Commerce
This new report examines how business leaders can help support and promote a comprehensive innovation policy for the US. The report suggests that CEOs and Governors can play key roles in helping to meet America’s competitive challenges. The report concludes with recommendations on six steps for smart innovation investments. Its suggestions include closely aligning state R&D investments with state economic development strategy; investing in collaborations between business, government, and academia; and investing for the long haul in a sustained and consistent manner.
Riding the Rising Tide: A 21st Century Strategy for US Competitiveness and Prosperity
Alliance for Science and Technology Research in America (ASTRA)
This report contains a new fourteen-point plan to increase spending on scientific research and to strengthen America’s global competitive position. The report’s fourteen recommendations fall into three broad categories: increasing funding for Federal R&D, especially in leading edge sectors like nanotechnology, biotechnology, and high-performance computing; improving the quality of science, technology, engineering, and mathematics (STEM) education at all levels of the US educational system; and creating a business environment that is supportive of innovation and competitiveness.
Challenges to Strengthening Agricultural Innovation Systems: Where Do We Go From Here?
Andy Hall, UNU-MERIT
The focus of this paper is the challenge of strengthening agricultural innovation systems. The paper prefaces this discussion by
reflecting on an apparent paradox. While agricultural innovation has never been better studied and understood, many of our ideas about innovation have failed to fundamentally change the institutional and policy setting of public and private investment intended to
promote innovation for development. The paper asks “students of innovation” why a virtual spiral of innovation practice and policy learning hasn’t emerged. It then locates the current interest in innovation systems in the evolving and contested approaches to agricultural development, noting that this is characterized by a long history of false dichotomies. The contingencies of the emerging agricultural scenario will demand the more networked modes of collective intelligence and innovation that are embodied in the innovation systems concept. The paper argues, however, that the innovation systems idea should be view as a metaphor for innovation diversity, rather than another competing innovation narrative. The way forward, it is suggested, is to create a united front of different collective intelligence-based innovation narratives to kick-start the virtuous spiral of innovation practice and policy learning. This is needed to strengthen agricultural innovation systems and so achieve developmental goals.
Globalization and the European Union: Which Countries Are Best Placed to Cope?
Dave Rae and Martie Sollie, OECD
Globalization can be a threat or an opportunity, depending on a country’s trade mix and its economic and regulatory structure. This paper assesses which EU countries are most exposed to globalization using, among other indicators, measures of revealed comparative advantage. It then looks at which countries are best placed to cope. This depends on labour and product market flexibility, the average skill level of the workforce, the innovation framework, the quality of the education system and the level and type of support, such as job-search assistance, that is given to those who are harmed by globalization.
The Short-Term Effects of New Universities on Regional Innovation
Robin Cowan and Natalia Zinovyeva, UNU-MERIT
This paper analyzes empirically the channels through which university research affects industry innovation. It examines how the opening of new science, medicine and engineering departments in Italy during 1985-2000 affected regional innovation systems. It finds that creation of a new university department increased regional innovation activity 3-4 years later. On average, an opening of a new department in a region led to a ten percent change in the number of patents filed by regional firms. Given that this effect occured within the first half decade of the appearance of a new department, it cannot be ascribed to improvements in the quality and quantity of graduates. At the same time, traditional measures of academic research activity can explain only around 30 percent of this effect.
Börje Johansson, Charlie Karlsson and Mikaela Backman, CESIS
The forthcoming Lisbon Agenda will certainly need new approaches, and new instruments. One of the areas of instruments that can be further explored is innovation policies where the use of R&D and human capital is enhanced. Human capital is a natural part of a knowledge-based economy, and has positive impacts on growth, and jobs in the economy. Innovation policy instruments are diversified and are integrated in many areas of an economy and on many levels, which make them ideal for the next Lisbon Agenda. The instruments can have a general or specific characteristics and some span over the two characteristics.
Cities, Clusters & Regions
National Endowment for Science, Technology, and the Arts
This new policy briefing takes a look how to “make innovative places.” The briefing summarizes the findings of several larger studies that examine how to promote innovation in both urban and rural settings. The studies note that two factors help drive local innovative capacity in cities: the presence of scale and choice, and local links with specialized innovation networks. Many of these assets don’t exist in rural areas, so these communities need to consider specialized approaches and also consider building closer linkages to urban areas. The studies also suggest that regional actors need to actively take part in a “regional innovation journey” that allows a region to create major change through a series of small achievable steps that build local innovation capacity. The report reviews the typical steps of this journey and also offers helpful suggestions for responding to the inevitable challenges that will arise in the process.
Statistics & Indicators
Economic Analysis of the Technological Infrastructure Needs of the U.S. Biopharmaceutical Industry
RTI International for the National Institute on Standards and Technology (NIST)
The report describes the growing complexity of biopharmaceutical drug discovery, as a transition is underway from the standard trial-and-error research process geared towards the treatment of symptoms, to using computer modeling and knowledge of the body’s biochemistry to create drugs that target the functionality of cellular processes. To increase the efficiency and quality of new drug production, infrastructure such as new equipment, software and technology platforms, operating protocols, and manufacturing processes will need to be further developed throughout the industry. Additionally, the standardization of these developments will allow data and knowledge to be shared through all stages of drug development, from basic research to clinical trials and commercial manufacturing. The report’s authors surveyed individual researchers and technical experts involved in biopharmaceutical R&D to provide quantitative estimates on how the advancement of the technical infrastructure can reduce cost and development times and improve the quality of drug development.
State Competitiveness Rankings 2007
Beacon Hill Institute at Suffolk University
The latest edition of the Beacon Hill Institute’s (BHI) annual State Competitiveness rankings shows that Utah has emerged as the US’s most competitive state economy. Utah assumes the top rank over Massachusetts, which had held the No. 1 spot for the previous two years. The BHI Index tracks forty-two different measures in a variety of areas such as infrastructure, environmental policy, government and fiscal policy, and technology. Utah’s impressive performance is attributed to competitive advantages in areas of government and fiscal policy, infrastructure, and new business development. The top five performing states are (in rank order): Utah, Massachusetts, Colorado, North Dakota, and Idaho. Among the states that have seen the greatest improvement on the BHI are Montana, New Mexico, and Rhode Island.
Policy Digest
OECD
Successful local development in the knowledge-driven global economy requires places to be truly distinctive, appealing and productive. Just as firms must innovate and invest to succeed, localities have to adjust, reinvent, and differentiate themselves. They must modernize their transport, communications and other infrastructure and build up human capital. But all this comes at a cost.The real challenge for local development is finding the investment to achieve all this, particularly as it can take 30-50 years to fully transform a locality or region from “industrial economy” mode to “knowledge economy” mode. Armed with the right tools and approaches, local development can emerge as an important arena for new investment that yields rates of returns that neither public nor private sectors can afford to ignore. This Policy Brief looks at OECD experience with financing local development and how local authorities can make the best of their investment opportunities.
How has local development financing changed?
At a time of tight public budgets and a need for local economies to deal with a global world, public funding alone is not a solution; if local development is to be successful and sustainable over the longer term, the private sector needs to be involved too. The private sector has begun to take much greater interest in local development, often in tandem with the public sector. The result has been a much wider set of financial tools for local development – but to take advantage of them, local administrations need to acquire the financial skills to use them effectively.
The public sector part of the partnership has two basic roles – to ensure delivery of economically sensitive public services such as education, planning and amenities, and infrastructure; and to foster collaboration among private and public sector actors, to ensure that development projects are delivered in a professional manner.
How does local public funding affect local development?
There are significant differences between governments in how local public funding is collected and distributed – how much tax is levied or spent at local level and how far local governments depend on transfer payments from higher tiers of government. Research carried out by the Council of Europe found that the share of local taxes in local government budgets varies between countries from 1-2% to 60%.
Where local governments rely heavily on local taxes to fund their budgets, they are more likely to see local economic development as a way of increasing their tax base to finance local services, assets, and amenities. Such local development is highly oriented towards attracting and expanding business and human capital development. Here, economic development finance is often about incentives for private sector investment and the primary interface is with business, investors and developers.
Where local governments rely heavily on national government to fund their budgets, they are more likely to see local economic development as a way of addressing social and spatial disparities. Such local development is often more oriented towards public and social sector activities – helping the unemployed into work and finding new sources of entrepreneurship and employment. Here, economic development finance is more about investing in the infrastructure to make private investment more likely, and often requires extensive liaison with higher tiers of government to attract funds.
Most OECD countries will see themselves as operating somewhere between these two extremes, but private finance is essential in all models, to achieve long-term economic development that is financially and commercially sustainable.
Where does the private sector fit in?
There are multiple mechanisms for the public and private sector to share the costs and risks of local development projects, such as public-private partnerships (PPPs), tax-based incentives, credits, and privately-funded mechanisms that support public sector endeavor.
Glasgow, for example, has used PPPs in two major areas, education and health. In Baltimore, tax incentives for new home construction and enterprise development have played a major role in bringing private sector investment into the regeneration of inner city and rundown neighbourhoods.And new investment tools are constantly emerging, especially for cities.
Business Improvement Districts were invented in Canada, but have since spread to the United States, South Africa, Australia, and beyond. Regional Investment Funds, first piloted in Germany, have spread throughout the EU’s regional development system and continue to grow. New approaches to infrastructure levies and development fees, common in Asia and in many other countries, are starting to be taken seriously in Europe.
Concern about climate change is meanwhile inspiring mechanisms to encourage cleaner and greener economic development, along with financing to pay for it. The “congestion charge” for motorists entering Central London not only reduces congestion and pollution by encouraging travelers to use public transport, bicycles, or their own two feet but also helps finance urban transport improvements.
Why do local financial skills matter?
Taking advantage of innovative financing ideas implies a high level of financial skills at local level. Local development often fails to attract enough investment, even though there is capital available in the markets, because of an inability to draw up an attractive investment/development package. The underlying problem is that local development practitioners and financiers appear to lack some important skills, notably in communication, leadership, and technical financial matters.
Local leaders and potential investors often have trouble communicating with each other. Local leaders focus on social and public policy needs rather than the potential return on investment, while financiers ignore the wider benefits that can build a shared approach to a local market. Local leaders often fail to exercise leadership in choosing the best methods of finance, focusing on the need for new financial tools, rather than using existing tools such as congestion charging or bonds because they are seen as too complex, politically unpopular, or untested. Technical skills in project financing, strategic asset management or project financing are often in short supply among local development practitioners, partly because they command high salaries that local development organizations cannot afford. However, when they do possess these skills, they access commercial and institutional finance much more effectively.
Where do we go from here?
Important changes are taking place in financing local development. Global opportunities for cities and localities have led to a renewed impetus for new financial tools. Properly appraised public borrowing at local and regional levels is no longer considered heresy. Using the tax system to provide a different incentive structure for place-based, as well as issue-based, investment has now become common. Addressing how public assets can be better used to generate private co-investment (rather than being sold for a once-only “current value” price) is now the new mind-set. There is also new thinking about the organizational structure needed to promote financial innovation. Just as cities have to help nations respond to shifts in new global value chains, there is also renewed interest in supporting investment into cities. All of this has been supported by a realization that improved local and regional investment is not solely about how much money is available from various sources. It rests much more upon the quality of propositions that are developed, the robustness of their management, and the returns they can offer to private and public investors.
Events
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.
Community Social Planning Council Toronto: Research Roundtable – Research for Social Change
Toronto, 22 January, 2008
This event will bring together community-based, government-based and academic researchers to share information about current research initiatives, discuss opportunities for collaboration, and exchange ideas for using research to advance social change. It will provide an opportunity to share perspectives on research for social change from our various vantage points, inside and outside of government.
Niagarapalooza: Rethinking Our Cities
Niagara Falls, 31 January, 2008
A conference for all community and business leaders, investors, developers, builders, architects, planners, urban designers, arts and culture leaders, artisans, realtors, financiers, politicians, smart growth enthusiasts, municipal employees, civil servants and members of the creative class. Keynote speakers include Richard Florida, Edie Friel, and Tim Jones. The conference will also include live music and performance art and a discussion with community leaders.
Innovation for Renewal and Growth – Accelerating Innovation for Sustainable Growth
New York, 11-12 March, 2008
Sessions will deal with issues and questions including: Growth oriented leadership – Defining the qualities your leadership must incorporate to reach growth objectives. New Models – The customer dynamic has forever changed with the advent of the internet. Open source innovation and collaboration are happening at the organizations setting the pace of innovation and growth in their sectors. What insights can organizations reap from the new reality of virtualization, collaboration, community and the coming co-creation wave?Innovation and Risk – Historically, managers tasked with driving growth through innovation have faced a risky and unpredictable road. How can you create and manage an innovation portfolio? Driving your organization’s innovation initiatives by utilizing metrics. Fostering a culture of innovation and empowering employees to see and act on opportunities in new or mature markets. Talent – as an innovation driver and growth lever for mature organizations. What is the business case used to engage all stake holders for innovation strategy buy-in, its communication and sponsorship across the enterprise?
International Forum on the Creative Economy
Ottawa, 17-18 March, 2008
The Conference Board of Canada and The Department of Canadian Heritage, Government of Canada, are pleased to announce a Call for Papers for the International Forum on the Creative Economy. Papers are welcome in either of Canada’s official languages, French or English. This International Forum will include keynote speakers, presentations, lectures, and other activities aimed at examining recent evidence on the arts and cultural sector as an important engine of economic growth. Papers must address one or more of the four Forum themes listed below. Descriptions and examples of these themes are attached: Creative Economy in Transition: Arts and Culture in Domestic and Global Markets; Measuring Arts and Culture as an Economic and Social Engine of a Country’s Wealth; Consumption Dynamics: Consumers Driving Change; Innovation and Research: Mobilizing New Practices.
Tech Policy Summit: Collaborating to Drive Technology Innovation and Adoption
Hollywood, CA, 26-28 March, 2008
Tech Policy Summit is the only executive conference of its kind that brings together prominent leaders from the private and public sectors to examine critical policy issues impacting technology innovation and adoption in the United States and beyond. The nonpartisan gathering provides an independent, balanced forum for learning and networking among an exclusive group of industry insiders, government officials, nonprofit leaders and academic experts who may have different perspectives but who share a common goal of enabling innovation. The central mission is to bridge the gaps that sometimes exist – even between like-minded organizations with common goals – and to encourage more dialogue so that there is greater accord between what happens in D.C. and what matters within the technology industry. The theme for the 2008 Summit is Markets in Transition: Collaborating to Drive Technology Innovation and Adoption, and sessions will focus on America’s competitiveness in the global economy and the growing impact of convergence on the high tech, digital entertainment and communications industries.
Knowledge in Space and Time: Economic and Policy Implications of Knowledge-Based Economy 
Strasbourg, France, 7-9 April, 2008
Contemporary economic, social and geopolitical developments are strongly influenced by two trends: the increasing globalization of the economy and the rise of the knowledge society. This confronts Europe with major organizational challenges. The DIME (Dynamics of Institution and Markets in Europe) Network of Excellence, aims to analyze the dynamic features of these processes. The “DIME-vision” is strongly rooted in the idea of multi-level governance as a way of solving many collective problems related to the generation and use of knowledge in the European society at large. Because of the localized and tacit character of knowledge, and its embodiment in specific communities of practice and networks of practitioners, it is essential to take into account the spatial nature of knowledge generation and exchange activities as well as sectoral industrial structure and the configuration of organizations. Indeed, proximity (both in a spatial and organizational sense) plays an essential role in the circulation of knowledge. In April 2008, DIME will be ending its 3rd year of existence. At this occasion, we aim to create an opportunity for the presentation of the most salient dimensions of DIME research, and to open a space for debating them with a broader community.
Second Conference on Micro Evidence on Innovation and Development
Beijing, China, 21-23 April, 2008
The aim of the conference is to bring together researchers from around the world to discuss the importance and the different dimensions of innovation in relation with economic growth and development. Contributions based on micro data from firm or household surveys, case studies and cross country comparative analyses are particularly wanted. In this second Conference, a particular emphasis will be put on innovation in China and other BRICS (Brazil, Russia, India, South Africa) countries. Contributions on other countries, in particular developing countries, are also welcome.
Toronto, 6-8 May, 2008
BioFinance 2008 is a gathering of some of the most innovative minds in the life science industries from Canada, US and Europe. Presenting Companies range from large publicly traded and major private companies to small 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.
9th International Digital Government Research Conference: Partnerships for Public Innovation
Montreal, 18-21 May, 2008
The 9th annual international conference is a forum for presentation and discussion of interdisciplinary digital government research and practice and its applications in diverse domains. The conference is presented by the Digital Government Society of North America (DGSNA), with major support from the US National Science Foundation. The conference theme, Partnerships for Public Innovation, focuses on information-intensive innovations in the public sector that involve linkages among government, universities, NGOs, and businesses. This theme emphasizes the importance of sharing practical issues, policy perspectives, research insights, and expert advice, in order to reach higher levels of performance in diverse public enterprises.
Advancing Small Business and Entrepreneurship: From Research to Results
Halifax, 22-25 June, 2008
Please join researchers, educators, policy makers and business service providers from around the world at the 53rd International Council for Small Business (ICSB) World Conference. The theme of the conference is “Advancing Small Business and Entrepreneurship: From Research to Results”. A key aim of the conference is to bridge the gap between research and action.
Mexico City, 22-24 September, 2008
GLOBELICS (Global Network for Economics of Learning, Innovation, and Competence Building Systems) is an international network of scholars who apply the concept of “learning, innovation, and competence building system” (LICS) as their framework and are dedicated to the strengthening of LICS in developing countries, emerging economies and societies in transition. The research aims at locating unique systemic features as well as generic good practices to enlighten policy making relating to innovation, competence building, international competitiveness, regional development, labor market and human capital development. In an increasingly global and knowledge-based competition, management strategies need to be based upon an understanding of these framework conditions and the public policies which seek to regulate the environment. For the sixth conference to be held in Mexico City papers that contribute to the understanding of ‘Styles’ or modes of Development (or Political Economy of Development): paradigms of public policies, conflicts, trade-offs and choices among alternative public policies will be welcome.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.