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
RYERSON UNIVERSITY LAUNCHES CANADA’S FIRST UNIVERSITY-LED ANGEL NETWORK
Ryerson University has established Canada’s first university-led angel investor network, the Ryerson Angel Network (RAN), to finance and mentor innovative student- and alumni-initiated companies. Established in collaboration with the National Angel Capital Organization (NACO), which will provide funding, training, and best practice investment strategies, the Ryerson Angel Network will consist of approximately 20 angel investors and will be administered through the newly formed Ryerson Entrepreneur Institute (REI).
Economic development executives from across the country met in Ottawa recently to work together with invited federal government departments and agencies on a unified business attraction strategy that recognizes the dominant role of urban economies. According to members of the Canada International Work Group, Canada’s largest cities represent more than 50% of Canada’s economic activity. The focus for the Ottawa meeting – the third by Canada’s large cities in the past 20 months – will be international trade and investment. Economic development agencies participating in today’s meeting include the Greater Halifax Partnership, Québec City Region (PQCA), Montréal International, OCRI (Ottawa Centre for Research and Innovation), the Greater Toronto Marketing Alliance, Waterloo Region (Canada’s Technology Triangle), Destination Winnipeg Inc., Saskatoon Regional Economic Development Authority, Edmonton Economic Development Corp., Calgary Economic Development, and the Vancouver Economic Development Commission.
Eight promising high-tech firms are getting ready to take on the global marketplace, with help from the Ontario government. The companies will each receive up to $500,000 from Ontario’s Investment Accelerator Fund to help take new technologies from the drawing board to the marketplace. The funding will go toward research, field testing and patent and promotion costs as these companies expand. This will support existing jobs and help to create future ones. The investments are part of the Ontario government’s plan to create a strong foundation for future economic growth by investing in companies that are creating jobs today. These companies will be part of tomorrow’s high-tech, green economy that provides jobs for Ontario’s high-skilled workers.
Technology Innovation Program to Fund New Infrastructure Research
The American National Institute of Standards and Technology (NIST) has announced nine awards for new research projects to develop advanced sensing technologies that would enable timely and detailed monitoring and inspection of the structural health of bridges, roadways and water systems that comprise a significant component of the nation’s public infrastructure. The awards, the first to be made under NIST’s new Technology Innovation Program (TIP), initiate up to $88.2 million in new research over the next five years on structure monitoring and inspection technologies, $42.5 million of it potentially funded by TIP. The new TIP projects target innovative, low-cost and reliable sensors and related technologies that provide quantitative assessments of the structural integrity or degree of deterioration of bridges, roads, water mains and wastewater collection systems. TIP supports, promotes and accelerates innovation in the United States through high-risk, high-reward research in areas of critical national need. The merit-based competitive program can fund cost-shared R&D projects by single small-sized or medium-sized businesses and joint ventures that also may include institutions of higher education, non-profit research organizations and national laboratories. TIP awards are limited to no more than $3 million total over three years for a single company project and no more than $9 million total over five years for a joint venture.
Editor's Pick
Growth Through Research and Development: What Does the Research Literature Say?
Roger Svensson, VINNOVA
The aim of this report is to summarise what the research literature in the field of economics says about how publicly-funded R&D affects productivity and growth. Above all, however, the report addresses how government research policy and the Government-funding of R&D should be organised to be as effective as possible. This covers both publicly-funded R&D that is performed by companies and R&D at government-controlled universities and research institutes. The report discusses the advantages and disadvantages of different types of public-funding of R&D. It then analyzes what differentiates R&D from other forms of input and why spillover effects occur. The empirical literature on the return on R&D and the relationship between R&D and growth is presented. The 4th and 5th sections discuss how publicly-funded R&D affects private R&D theoretically and empirically and how R&D at universities can be transferred to business and industry and who should own the results of university research. This section includes international comparisons. Another section analyses the issue of how the government should finance the universities – by means of a fixed allocation or on a project basis (competition). The consequences of funding on a competitive basis are discussed and advantages of scale in the university sphere are analysed.
Innovation Policy
First Report of the Irish Government Strategy for Science, Technology and Innovation
The Government’s Strategy for Science, Technology and Innovation sets a vision for Ireland to become a leading knowledge economy by 2013. This report reflects the key progress Ireland is making to this end in the inter-dependent areas of: building a world class research system; capturing, protecting and commercializing ideas and know-how; driving growth through research and innovation in enterprise; providing solid sound foundations in education; ensuring that the different parts of the research system are working well together.
The Effectiveness of R&D Tax Credits in Small and Large Entreprises in Quebec
Rufin Baghana and Pierre Mohnen, UNU-MERIT
This paper evaluates the effectiveness of R&D tax incentives in Quebec, using manufacturing firm data from 1997 to 2003 originating from R&D surveys, annual surveys of manufactures and administrative data. The estimated price elasticity of R&D is -0.10 in the short run and -0.14 in the long run, with a slightly higher elasticities for small firms than for large firms. It shows that there is a deadweight loss associated with level-based R&D tax incentives that is particularly acute for large firms. For small firms it is not sizeable enough to suppress the R&D additionality, at least not during quite a number of years after the initial tax change. Incremental R&D tax credits do not suffer from this deadweight loss and are from that perspective preferable to level-based tax incentives.
Cities, Clusters & Regions
Pierre-Paul Proulx, Global Urban Competitiveness Project
Metropolitan areas are facing a variety of significant development problems to different degrees, among them continuing population growth either from internal rural-urban migration and /or immigration, multimodal infrastructure deficits , rising energy costs, climate change, aging populations, growing security considerations, the concentration of urban poverty, limited taxation and financing possibilities, difficulties in playing their role as urban gateways to regions, difficulties in attracting and retaining highly qualified persons, inadequate governance models and low involvement cohesion and collaboration between different levels of government, the private sector and civil society at the metropolitan level. Most cities face higher operating costs because of their size and density, additional costs for transit and social housing, welfare, educating and policing, fire protection and building inspections. They also suffer from high levels of air pollution and impose significant stress on their ecosystems. Many of these problems can only be adequately tackled on a coordinated basis by national and sub-national governments and on region wide bases. Creative and innovative solutions to these problems most often imply leadership and collaboration between governments and the private sector and civil society. This paper begins with a brief presentation of the urban structure in Canada and the constitutional context which influences how the Federal, provincial regional and local governments relate to municipalities. It then briefly discuss municipal public finance i.e. expenditures, revenues and the application of the benefits based fiscal system to identify means to renew the basis of municipal financing. The paper then reviews the literature dealing with the determinants of the growth of cities and closes with proposals concerning elements of a new multidimensional-multilevel model for the governance and growth of cities.
Upgrading in Asian Clusters: Rethinking the Importance of Interactive Learning
Cristina Chaminade and Jang Vang, CIRCLE
This paper unpacks the role of clusters in supporting the move from competing on low-costs to competing on innovation in the global value chain; special attention is paid to clustered SMEs. By comparing 4 clusters in different industries in Asia, the authors highlight significant differences in the learning paths of clustered SMEs. The paper contributes to current discussion on upgrading in clusters in developing countries by a) providing an explanation on how localized interactive learning and thus clustering relates to upgrading b) discussing under which conditions upgrading requires interactive learning and c) identifying the linkages between particular types of interactive learning and different upgrading strategies.
Statistics & Indicators
Open Innovation in a Global Perspective
Koen de Backer (OECD), Vladimir Lopez-Bassols (OECD) and Catalina Martinez (IPP-CSIC)
Open innovation has received a lot of attention in the business management literature and recently also in policy discussions. Until now, most of the empirical evidence has been based on case study work offering detailed insights into some best practices of open innovation in companies’ innovation strategies. While existing large-scale data may offer interesting empirical evidence on open innovation, they have surprisingly not really been analysed in great detail. Especially the increasing importance of open innovation on a global scale in so-called global innovation networks, calls for internationally comparable data on open innovation. This paper presents different indicators using existing data on R&D investments, innovation survey data, patent data and data on licensing, illustrating the increasing importance and the different characteristics of open innovation across companies, industries and countries.
United Kingdom Department of Innovation, Universities, and Skills
This first annual report follows up on the British government’s Innovation Nation White Paper published in March 2008 and the Sainsbury review of science and innovation published in 2007. It benchmarks Britain’s innovation performance, and also tracks progress in meeting the goals set out in the initial Innovation Nation strategy. Most of the recommendations are in the process of being implemented. Recently announced programs include £5 million Innovation Research Center that will conduct research on pressing innovation issues, as well as new strategies to generate new business opportunities that link innovative small businesses to pressing government agency challenges. Two recently announced competitions will focus on reducing military dependence on fossil fuels and combating infections in health care facilities.
Immigrants’ Education and Required Job Skills
Statistics Canada
During the 1991 to 2006 period, the proportion of immigrants with a university degree in jobs with low educational requirements increased, not only among recent immigrants but also among established ones. The increases for established immigrants suggest that the difficulties, which have long plagued recent immigrants, are not necessarily temporary. Changes in the profile of established immigrants—particularly language and country of origin—accounted for only a quarter of the deterioration for established immigrants.
Policy Digest
Robert Atkinson, ITIF
In this report, the Information Technology and Innovation Foundation (ITIF) identifies and analyzes the employment impact of investments in three IT infrastructure projects that (1) contribute to significant immediate direct and indirect job growth in the economy; (2) create a “network effect” throughout the economy that, in some cases, doubles the number of directly created jobs; and (3) provide a foundation for longer term benefits, including government cost savings, economy-wide productivity, and improved quality of life for Americans. The three IT infrastructure projects are broadband networks, health IT, and the smart power grid.
ITIF’s major findings are as follows:
1. Investments in America’s digital infrastructure will spur significant job creation in the short run. ITIF estimates that spurring an additional investment of $30 billion in America’s IT network infrastructure in 2009 will create approximately 949,000 U.S. jobs. It is also estimate that approximately 525,000 of these jobs will be in small businesses.
Broadband networks: A stimulus package that spurs or supports $10 billion of investment in 1 year in broadband networks will support an estimated 498,000 new or retained U.S. jobs for a year.
Health IT: An additional $10 billion investment in health IT in 1 year would create as many as 212,000 new or retained U.S. jobs for a year.
Smart power grid: A $50 billion additional investment in the smart grid over 5 years (e.g., $10 billion per year) would create approximately 239,000 new or retained U.S. jobs for each of the 5 years on average.
2. Investments in America’s digital infrastructure that create a network effect (or network externality) will offer superior job creation benefits because of the “network multiplier.” Infrastructure investments—of both the digital and physical variety—will create direct jobs, indirect jobs, and induced jobs. Consider an investment in broadband networks or highway infrastructure. Direct jobs are those created specifically by new spending (e.g., the technicians or road workers hired to lay broadband “pipes” or asphalt). Indirect jobs are those created to supply the materials and other inputs to production (e.g., circuit boards that go into routers). Induced jobs are those created by newly employed (or retained) workers spending their paychecks, thus creating jobs in establishments such as restaurants and retail stores. Investing in IT infrastructure offers superior job creation benefits because it creates what economists call a “network effect.” This network effect leads to an additional employment growth multiplier, herein referred to as the “network multiplier,” which arises from the new consumer and business behaviors, functionalities, and downstream industries enabled by the IT infrastructure. The network effect employment multiplier refers to the new jobs that will be created through the new applications and services—many manifested in entirely new industries and/or firms—that digital infrastructure makes possible. This possibility arises because digital infrastructure acts as a platform that serves as the foundation for a multitude of innovative products and services.
3. Investments in America’s digital infrastructure will lead to higher productivity, increased competitiveness, and improved quality of life in the moderate to long term. IT-based infrastructure projects, in addition to providing an opportunity for creating jobs today, have the potential to spur long-term economic growth. As ITIF has shown in previous reports, IT is central to economic growth. Between 1995 and 2002, for example, IT was responsible for two-thirds of total factor growth in productivity and virtually all of the growth in labor productivity in the United States. During the period 2000 to 2005, IT continued to perform, contributing over 1 percentage point to growth in labor productivity. And not only do IT infrastructure projects create more jobs than traditional infrastructure investments, in part because of the network multiplier, they also create more high-skilled, high-paying jobs. In fact, IT jobs on average pay 84 percent more than average jobs.
Only the federal government is in a position to achieve the scale of investment needed for these projects to be a true economic multiplier for the United States. This is not to say that federal investment is needed on a continuous basis. Far from it. Nevertheless, an immediate short-term stimulus may drive networks for broadband, health IT, and the smart grid to the tipping point, after which investment can be almost exclusively provided by the private sector without strong incentives.
Events
3rd Conference on Urban Clusters 
Barcelona, Spain, 12 February, 2009
Many topics will be discussed such as creative cities and local economic development, European cluster policies, the cluster experience in China, building clusters in Latin America, and clusters development in a crisis environment.
Toronto, 3-4 March, 2009
Canadian Innovation Exchange (CIX) is a two-day event showcasing Canada’s hottest new and innovative technology companies. A nexus of multiple meeting and networking opportunities, CIX is designed to enable the who’s who of North American investors to discover Canada’s next great companies. With facilitated and informal networking events, this innovation marketplace features Flash-forward presentations on the future of media, software, mobile and technology.
Understanding and Shaping Regions: Spatial, Social and Economic Futures
Leuven, Belgium, 6-8 April, 2009
Many topics will be discussed such as regional policy and evaluation, regions as innovative hubs, economic restructuring and regional transformation, and local and regional economic development. Abstract submission deadline: Sunday, 4th January 2009.
Creative Industries, Scenes, Cities, Places: Idiosyncratic Dimensions of the Cultural Economy
Cardiff, UK, 22-23 April, 2008
This seminar will focus on the relationship between places (cities, neighbourhoods, and quarters) and the development of creative industries. The range of papers should cover both theoretical perspectives and practical examples of the issues and challenges faced by researchers in trying to capture the economic, social and cultural dimensions of the creative economy. The conference will focus on four themes and questions: How to study the relationship between creative industries and city-regions. What are the methodologies which address the way creative industries produce and interact with their markets? What is the role of place at various levels (city, neighbourhood, regions) in fostering creativity and creative production? What is the importance of public support policies and frameworks in developing the creative industries sector? Does fostering creative industries mean enabling regional growth?
Community Engagement and Service: The Third Mission of Universities
Vancouver, BC, 18-20 May, 2009
The conference will showcase research and practice of what in North America is called ‘service to the community’. Although newly discovered by some universities, service to the community has long traditions in others, and in many cases is recognized as an explicit mandate in the university charter. Service is understood to be the Third Mission alongside teaching and research. Service and community engagement take many different forms. Examples are community based research and learning, assistance in regional development, continuing and community engagement, technology transfer and commercialization, and other forms of knowledge sharing and linkages.
Photonics North 2009: Closing the Gap Between Theory, Development, and Application
Quebec City, 24-27 May, 2009
This conference is an international event dedicated on the latest accomplishments, future directions and innovations exclusive to optics/ photonics technologies. Presentations will explore advances in Science and technology that will impact the use of photonics in the 21st century. Photonics North will provide you with the knowledge and competitive intelligence you need to keep up in the industry that changes and evolves at break-neck speed.
Madrid, Spain, 4-6 June, 2009
The European Urban Research Association (EURA) and the Urban Affairs Association (UAA) hold their second Joint Conference on City Futures in 2009. By building on the success of the first such conference, held in Chicago in 2004, the conference aims to focus sharply on international exchange. Urban scholars on both sides of the Atlantic have created a five-track structure for this forward-looking conference: Climate change, resource use and urban adaptation; Knowledge and technology in urban development; Community development, migration and integration in urban areas; Urban governance and city planning in an international era; Architecture and the design of the public realm
Glasgow, Scotland, 17-19 June, 2009
Triple Helix VII offers a multi-disciplinary forum for experts from universities, industry and government. The Conference is designed to attract leading authorities from across the world who will share their knowledge and experience, drawing a link between research, policy, and practice in sustainable development. The Conference will bring together policy-makers, academics, researchers, postgraduate students, and key representatives from business and industry. The theme for Triple Helix VII – “The role of Triple Helix in the Global Agenda of Innovation, Competitiveness and Sustainability” – reflects the interaction between academia, the private and the public sector.
TEKPOL: 3rd International Conference on Innovation, Technology and Knowledge Economics
Ankara, Turkey, 24-26 June, 2009
The main objective of this workshop is to bring together researchers and policy makers from new member states and candidate counties in order to discuss the following topics: links between innovation, R&D and economic performance; innovation and technology diffusion; knowledge management and learning in organizations; systemic nature of innovation (national, sectoral and local); science, technology and innovation policies; issues concerning developing countries and technological change; economic impact of new technologies.
Atlanta Conference on Science and Innovation Policy 2009
Atlanta, 2-3 Oct, 2009
Governments seek new strategies and are turning to the science, technology, and innovation policy research community for models and research results to tell them what works, what doesn’t, and under what circumstances. Test models of innovation. Explore emerging STI policy issues. Share research results. Call for papers to be posted shortly.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.