Volume Twelve
Issue #403 (June 2, 2019)
- Introduction
- Announcements
- Editor’s Pick
- Innovation Policy
- Cities, Clusters & Regions
- Statistics & Indicators
- Policy Digest
- Events
Introduction
This newsletter is published by The Innovation Policy Lab at the Munk School of Global Affairs and Public Policy at the University of Toronto.
Announcements
Ontario Launches Expert Panel and Online Consultation on Intellectual Property
Ontario Ministry of Training, Colleges, and Universities
Recently the Ontario government announced the creation of an expert panel and online consultation on intellectual property. The panel is will report on strategies to achieve the following goals: “Improve the innovation outcomes for the benefit of Ontario’s economy; Promote the creation and commercialization of intellectual property; Review current commercialization capacity inside Ontario’s postsecondary education sector; and Recommend strategies for improved generation and commercialization of research and intellectual property.” The announcement called for input to the government’s online public consultation on intellectual property (closing date June 21, 2019). The panel will deliver its final report Ontario government in December 2019.
Editor’s Pick
The Value of Adopting a Systems Approach to the Productivity Puzzle
Jen Nelles and Tim Vorley, Productivity Insights Network
Since the 2007 financial crisis, productivity growth in the UK has been persistently weak confounding policymakers and prompting a flurry of research around what has become known as the productivity puzzle. There are many theories about the roots of this poor performance but one constant is the perception that public policy ought to be able to intervene to improve outcomes. While most acknowledge that there is likely no silver bullet there is emerging consensus that the evolution of productivity policy in the UK has not (yet) yielded predictable or positive impacts on productivity performance. This report argues that the siloed nature of productivity policy may be hindering the development of an effective productivity program and that adopting a systems approach to policy may provide new insights into the productivity puzzle.
Innovation Policy
Canada’s Digital Charter in Action: A Plan by Canadians, for Canadians
Innovation, Science and Economic Development Canada
In 2016, the Government of Canada set out to develop an ambitious plan for economic growth, creating jobs for Canadians and helping Canadians gain the skills they need to succeed in a competitive global economy. The Innovation and Skills Plan, announced in Budget 2016, takes an integrated, whole-of-government approach that supports firms at all points along the innovation continuum and Canadians at every stage of their lives. But as the innovation ecosystem changes and shifts, it is important to remain proactive. Six business-led Economic Strategy Tables have provided recommendations in the areas of advanced manufacturing, agri-food, clean technology, digital industries, health/bio-sciences and resources of the future. And in 2018, the Government reached back out to Canadians to help build a collaborative approach to digital and data transformation and inclusion which is the next phase of the innovation-driven agenda. This report details the results of that public engagement and outlines the draft 10 principles will help guide the federal government’s work, serving as a digital charter for Canadians to help address challenges and leverage Canada’s unique talents and strengths in order to harness the power of digital and data transformation. These principles reflect responses from this period of engagement and are the building blocks of a foundation of trust for this digital age.
A New North Star: Canadian Competitiveness in an Intangibles Economy
Robert Asselin and Sean Speer, Public Policy Forum
Written by former economic advisors to both of Canada’s traditional governing parties, this report advocates for a bi-partisan competitiveness strategy to respond to the rise of the intangibles economy (what has been described as “capitalism without capital”). Canada’s current policy toolkit is mainly designed for a world of tangible assets, where capital and labour are the main factors of production and investment and trade raise everyone’s boat. The growing trend towards intangible assets, such as data, brands and IP, requires that policy-makers re-evaluate, refine and improve our basic assumptions about economic competitiveness and the best mix of public policies to support it. This does not mean discarding foundational ideas about markets and openness. But it does mean questioning old assumptions and augmenting them with emerging thinking about new factors at play and the “winner-take-all” nature of the intangibles economy.
Cities, Clusters & Regions
Growing Cities That Work for All: A Capability-Based Approach to Regional Economic Competitiveness
Marcela Escobari, Ian Seyal, José Morales-Arilla, and Chad Shearer, Brookings
Although today’s U.S. labor market is strong and unemployment is low, many working-age American remain marginalized. As communities across the country grapple with the challenges of an ever-evolving labor market, this report provides a framework for local leaders to grow good jobs through industrial development strategies that are based on their regions’ unique capabilities. The main objectives of this report are to: (1) Review the main underlying causes of structural change in the national labor market—from automation to digitalization to global competition—and the nature of the policy responses to date in addressing these challenges; (2) Propose a tailored approach to helping policymakers and companies bring economic growth to their regions by applying data-driven network analytics to reveal industry and city growth patterns within the U.S. (3) Demonstrate how the network analytics approach can inform local economic development strategies that foster growth and good jobs through four city-specific case studies: Nashville, TN; St. Louis, MO; South Bend, IN; and Boise, ID.
Statistics & Indicators
Second Place America?: Increasing Challenges to U.S. Scientific Leadership
Task Force on American Innovation
The Task Force on American Innovation (TFAI) has a history of assembling and examining benchmarks to assess America’s international standing in science and technology. This report builds on past TFAI reports, beginning with the first Benchmarks Report released in 2005, which highlighted that, the United States still leads the world in research and discovery, but its advantage is rapidly eroding, and our global competitors may soon overtake it. Since this report, additional TFAI analyses in 2006 and 2012 found a continuation of the 2005 trends and called for the U.S. to strengthen the workforce and innovation ecosystem. In the 14 years since the first TFAI report, original trends persist and the U.S. continues to lose ground to other nations in investments in science, technology, and talent.
The Economics of Artificial Intelligence: An Agenda
Ajay Agrawal, Joshua Gans, and Avi Goldfarb, National Bureau of Economic Research Conference Report
Advances in artificial intelligence (AI) highlight the potential of this technology to affect productivity, growth, inequality, market power, innovation, and employment. This volume seeks to set the agenda for economic research on the impact of AI. It covers four broad themes: AI as a general purpose technology; the relationships between AI, growth, jobs, and inequality; regulatory responses to changes brought on by AI; and the effects of AI on the way economic research is conducted. It explores the economic influence of machine learning, the branch of computational statistics that has driven much of the recent excitement around AI, as well as the economic impact of robotics and automation and the potential economic consequences of a still-hypothetical artificial general intelligence. The volume provides frameworks for understanding the economic impact of AI and identifies a number of open research questions.
Policy Digest
A Costly Gap: The Neglect of the Demand Side in Canadian Innovation Policy
Jakob Edler, Institute for Research on Public Policy
This report asserts that Canada’s current innovation policy mix is overly-reliant on supply-side inputs to the innovation process. Specifically, analysis and policy have been focusing and continue to focus on very traditional supply-side issues, such as R&D investment, start-ups, venture capital and university-industry relations. This supply-side bias has been unsuccessful in addressing Canada’s lacklustre innovation performance, as measured by low productivity growth, low business and government investment in R&D, and unfulfilled expectations that innovation will enhance general welfare and address societal grand challenges. The report asserts that the supply-side focus ignores the two major demand-side problems in the economy: (1) if businesses do not use the latest technologies, they fall behind in productivity; and (2) if businesses do not sense a readiness and ability of the market to absorb their innovations, they are reluctant to innovate.
The report lays out the following three rationales for supporting innovation demand:
- Market and system failures: De-risking adoption of new technology by offsetting user’s learning and adaptation costs, correcting for information asymmetries regarding costs and benefits, facilitating user-producer communication, and overcoming path dependency to build technological capabilities.
- Productive linkages between the supply and the demand sides: Poor demand conditions (abilities, readiness to experiment, etc.) can threaten the two-way flow of knowledge between users and suppliers of novel technologies, undermining the productivity of both parties.
- The pursuit of societal goals: The democratic state, representing societal interests, can mobilize the generation and use of innovation to achieve societal goals through ‘mission-oriented’ innovation challenges.
Demand-side policy refers to all public action to do one or more of the following:
- Induce innovation and/or speed up the diffusion of innovation by supporting the willingness or ability to ask for and use innovation.
- Define new functional requirements for products and services.
- Improve user involvement in innovation production (user-driven).
Specific demand-side innovation policy instruments include:
- Public procurement of innovation, whereby the state uses procurement strategies and procedures to lower the risk for innovators and spark innovation. In this context, the state either defines new functionalities as a buyer or is open to innovative solutions. Public procurement of innovation has become the most fashionable demand-side measure in Europe because of its alleged simplicity and because it allows the state to act directly as an innovation-buying and -using agent. However, this strongly underestimates the obstacles that need to be overcome if public procurement really is to be effective in encouraging innovation.
- Precommercial public procurement, whereby public sector needs are identified and opened to contests for potential suppliers (demand-side element), who are granted service contracts to develop solutions (supply-side element). The final purchase of the resulting innovative product or service is not included as part of these programs, however, as it needs to go through the regular procurement process.
- Price-based instruments, such as demand subsidies or tax incentives, which lower the barriers for early buyers and signal a political will to create a market.
- Awareness measures, labels, information campaigns, which come in many forms to mitigate information asymmetries.
- Demonstration projects, whereby the state buys and uses large equipment or facilities to reduce uncertainties for potential private buyers.
- Training to enable potential users to take advantage of innovative products and services.
- Articulation of needs and joint-need definition, which are essential to give direction to demand and send signals to suppliers as to where future demand will be headed.
- Support of user-producer interaction and user-driven innovation.
- Regulation to help reduce uncertainties and align societal expectations with future developments and specifications.
- Mix of demand-side measures, whereby explicit strategies combine different instruments to overcome a range of identified bottlenecks and speed up adoption and diffusion processes.
The report notes that to be successful, demand-side innovation policies must overcome two basic challenges:
- The need to shift responsibilities for innovation policy within government: Demand-side innovation policy must be led from those departments responsible for the policy domain associated with a given societal challenge (transportation, energy, health, etc.). This requires increased policy coordination.
- New strategic intelligence requirements: The state must also develop new strategic intelligence in discourse with a variety of societal actors to define the goals and appropriate solutions of demand-side innovation policy, as well as evaluate their success.
Finally, the report outlines proposals for a demand-side shift in Canadian innovation policy:
- Innovation policy to address societal challenges: the government could initiate a cross-government and cross-society consultation process to jointly define the societal challenges that innovation policy should tackle and, in doing so, mobilize citizens, businesses and public bodies as potential buyers of innovative solutions.
- Strategic procurement: While Innovative Solutions Canada is a good start, its pre-commercial focus leaves a policy gap for the government to think more strategically about market creation through strategic procurement.
- Supercluster policies: The report notes that fulfilling the ambitious vision of the superclusters to create important new markets will require policy support and in particular more stringent and creative instruments to tackle demand bottlenecks and mobilize the user side.
- Innovation adoption: The report highlights a need to reduce regulatory complexity, redundancy and compliance burden and establish a network of technology adoption centres, implementing a digital technology readiness tool and various tax incentives such as accelerated capital cost allowance.
Events
CFP: 2019 University-Industry Interaction Conference
Helsinki, Finland, 18-20 June, 2019
This key event for university leaders, practitioners from both business and university, policymakers and educators attracts more than 500 participants from over 60 countries to interact, share knowledge and establish new relationships. During this three-day event, you will encounter presentations from over 100 organisations, tour innovation spaces, have access to a wide variety of workshops and participate in numerous networking opportunities to gain new insights into the bigger picture of university-industry interaction.
Copenhagen, Denmark, 19-21 June, 2019
Since 1996, DRUID has become one of the world’s premier academic conferences on innovation and the dynamics of structural, institutional and geographic change. DRUID is proud to invite senior and junior scholars to participate and contribute with a paper to DRUID19, hosted by Copenhagen Business School. Presenting distinguished plenary speakers, a range of parallel paper sessions, and an attractive social program, the conference aims at mapping theoretical, empirical and methodological advances, contributing novel insights, and help identifying scholarly positions, divisions, and common grounds in current scientific controversies within the field. Keynotes delivered by top scholars from innovation studies, management, economic geography, and numerous other research fields. Plenary speakers at DRUID19 include Stefano Brusoni, Dimo Dimov, Nijanlana Dutt, Annabel Gawer, Martine Haas, Adam B. Jaffe, Michael G. Jacobides, Sarah Kaplan and Dan Levinthal.
The 2019 Technology Transfer Society Annual Conference
Toronto, 26-28 September, 2019
The Munk School of Global Affairs and Public Policy and the Technology Transfer Society would like to invite you to submit a paper* to the 2019 Technology Transfer Conference. The main themes of the Conference will revolve around technology transfer and innovation policy, technology commercialization and entrepreneurship (with a focus on universities), and inclusive innovation. Submissions featuring longitudinal and historical studies, ideally using mixed-methods research are particularly encouraged. Submissions based on other methods are also welcome. For more information on how to submit an abstract, visit the Call for Papers page.
Atlanta Conference on Science and Innovation Policy
Atlanta, GA, 14-17 October, 2019
The Atlanta Conference on Science and Innovation Policy provides a showcase for the highest quality scholarship addressing the multidimensional challenges and interrelated characteristics of science and innovation policy and processes.
Florence, Italy, 7-8 November, 2019
The Conference will focus on the paths of regional transformation that emerge as a response to technological and social change. Sustainability issues require regions to face change by trying to balance economic growth with social innovation. We will discuss the role that regional policies can play within such scenarios, by supporting the creation of new assets and resources, as well as favouring multi-level alignments of visions and interests.
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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe