Massachusetts Governor Proposes US$1 Billion in Funding for Scientific Research

In the most sweeping policy announcement of his new administration, Massachusetts governor Deval Patrick proposed $1 billion in funding for scientific research, a package designed to cement the state's reputation as a global powerhouse of medicine and biotechnology. The 10-year initiative, which has won the endorsement of legislative leaders, would fund academic research and start-up companies, as well as create a stem cell bank at the University of Massachusetts for newly created lines of embryonic stem cells, a controversial arena of research currently barred from federal funding.

US$300 Million Lures Sematech to Albany

A major Texas-based consortium for computer chip development known as Sematech has agreed to locate a key part of its operation in Albany, as long as the state comes up with a $300 million incentive package. As a result, the governor and top lawmakers committed the funds in a capital budget bill for International Sematech. The company would establish its headquarters in Albany, adding about 450 high-paying research and development jobs here to an existing work force of 250.

University of Miami Lures Big Names, Money for Research

A year ago, the Duke University Center for Human Genetics had about 180 researchers working on everything from autism to Alzheimer's. Today, 51 of them are at the University of Miami medical school. Within the past six months, UM's medical school has hired 30 researchers and staff members from the University of Michigan, 20 from the University of California at Los Angeles, 10 from Columbia University and seven from Johns Hopkins University -- all top universities in biotechnical research. The researchers bring with them about $70 million in multiyear grants from the National Institutes of Health, the key funder of medical research in the US.

Ontario Centres of Excellence and the Catalan Institute of Photonic Sciences Collaborate to Commercialize Leading-Edge Photonics Research

Ontario Centres of Excellence (OCE) Inc. has set the stage for joint technical, scientific and technology transfer activities with the Institute for Photonic Sciences (ICFO) in Catalonia, Spain. With members of a delegation from the Catalan region in Toronto recently for OCE's Discovery 2007: TO NEXT conference, OCE and ICFO signed a memorandum of understanding outlining increased partnership in photonics between the two regions. The goal of the MOU is to stimulate innovation and expedite the commercialization of technologies that will make businesses in both regions more competitive globally. Together, the two partners will build industrial R&D collaborations and seek mutually beneficial trade and business opportunities. The two regions will also explore educational opportunities, including the exchange of scientific expertise and personnel.

CPRN Revamps Cities and Communities Website

To help Canada and Canadians make the transition to new economies and politics of place, CPRN is addressing several paths of research including the intersection of social and economic policy in local places, and issues of citizenship and governance in cities and city-regions. CPRN has revised their web site in a way that makes it much easier to find relevant material, in particular the cities and communities web page is highly relevant for any researchers interested in local and regional issues in Canada.

EDITOR'S PICK                                                             [Table of Contents]

Financing Entrepreneurs: Better Canadian Policy for Venture Capital

C.D Howe Institute

Innovation and growth depend in large part on entrepreneurship, which in turn may require financing in the form of venture capital investment. In Canada, Labour-Sponsored Venture Capital Corporations (LSVCCs) have become the dominant source of venture capital. This report from the CD Howe Institute argues that there is reason for concern over this development, because evidence suggests LSVCCs are inefficient investment vehicles, charging high fees and yielding disappointing results: very few funds generate positive returns. Moreover, government tax subsidies to LSVCCs may crowd out private venture investment. The report suggests Canadian policymakers should investigate other ways to facilitate entrepreneurial investment. Potential changes to the legal environment begin with capital gains taxation: evidence shows that a reduction in the capital gains tax rate stimulates venture capital funding. More generous treatment for employee stock options is also an option for Canada. Among the suite of broader policy choices: direct government investment programs, such as the United States’ Small Business Innovation Research Program and Australia’s Innovation Investment Funds. While these programs involve public subsidization of venture capital, the US and Australian examples have generated records indicating effectiveness in fostering innovation and economic development.

CITIES, CLUSTERS & REGIONS                                          [Table of Contents]

Growth, Innovation, Scaling and the Pace of Life in Cities

Luís Bettencourt, José Lobo, Dirk Helbing, Christian Kühnert and Geoffrey West

This paper argues that urban life and metropolitan economies develop according to a predictable pattern, one that closely resembles patterns observed in other types of social organization and in biological organisms. Cities with higher populations tend to experience faster rates of innovation and greater productivity in their urban economy. The authors find that indicators of urban activity tend to fall into three categories. The first involves indicators that relate to the needs of individuals. As a city accumulates new residents, each of those residents requires employment, housing and utilities. Thus, as population increases, these indicators tend to grow linearly. A second group of indicators is affected by economies of scale, though the study indicates that these economies do tend to plateau after a certain scale. The final group of indicators measures the creation of knowledge and innovation. The pace of discovery and innovation in cities accelerates as the city grows and continued growth depends on a constantly increasing rate of knowledge production and distribution. These findings suggest that it may be possible to predict future rates of urban innovation and high-tech economic development as a city's population grows. In addition, expanding urban economies may require increasing investment in innovation and R&D to support their economic and population growth and to avoid economic collapse.

What Determines the Efficiency of Regional Innovation Systems?

Michael Fritsch and Vikto Slavtchev

This paper assesses the efficiency of regional innovation systems (RIS) in Germany by means of a knowledge production function. This function relates private sector research and development (R&D) activity in a region to the number of inventions that have been registered by residents of that region. The paper finds that both spillovers within the private sector as well as from universities and other public research institutions have a positive effect on the efficiency of private sector R&D. It is not the mere presence and size of public research institutions, but rather the intensity of interactions between private and public sector R&D that leads to higher efficiency. The authors find that the relationship between the diversity of a regions' industry structure and the efficiency of its innovation system is inversely u-shaped. Regions dominated by large establishments tend to be less efficient than regions with a lower average establishment size.

Super Cluster: Ideas, Perspectives and Updates from the Massachusetts Life Sciences Industry

PriceWaterhouse CoopersBoston, Massachusetts Technology Collaborative, and the New England Healthcare Institute

This report is both a celebration of the success and potential of the Massachusetts life sciences super cluster as well as a warning against complacency. It contains articles by and interviews with some of the super cluster’s biggest stars, including a Nobel Prize winner, top pharmaceutical, biotechnology and medical device CEOs, and experts from academia, medicine, venture capital and state government. It describes the current state of the life sciences super cluster, the outlook for the future, and critical areas of improvement. It recommends that collaborative efforts for improvement in this area should include a strategic plan to improve school curricula to ensure that demand for high quality workers is addressed; a plan to resolve issues surrounding worker retention (including long commutes and high housing costs); the provision of a consistent tax, licensing and regulatory environment; and developing strategic and innovative policy responses to growing competition.

The Rise of the Sunbelt

Edward L Glaeser and Kristina Tobio, Harvard University

In the last 50 years, population and incomes have increased steadily throughout much of the Sunbelt. This paper assesses the relative contributions of rising productivity, rising demand for Southern amenities and increases in housing supply to the growth of warm areas, using data on income, housing price and population growth. Before 1980, economic productivity increased significantly in warmer areas and drove the population growth in those places. Since 1980, productivity growth has been more modest, but housing supply growth has been enormous. The paper infers that new construction in warm regions represents a growth in supply, rather than demand, from the fact that prices are generally falling relative to the rest of the country. The relatively slow pace of housing price growth in the Sunbelt, relative to the rest of the country and relative to income growth, also implies that there has been no increase in the willingness to pay for sun-related amenities. As such, it seems that the growth of the Sunbelt has little to do with the sun.

STATISTICS & INDICATORS                                                 [Table of Contents]

Competitive Cities: A New Entrepreneurial Paradigm in Spatial Development

OECD

Economic globalization and the subsequent intensification of inter-city competition have caused a profound change in the governance of cities. It is the change in the mode of policy planning from managerialism, which is primarily concerned with effective provision of social welfare services to citizens, to entrepreneurialism, which is strongly characterized by proeconomic-growth strategic approaches, risk-taking, innovation and an orientation toward the private-sector. The change has been most evident in urban spatial development, which has long been preoccupied with the managerial mode of policy making, ultimately aiming at efficiently managing the diverse spatial needs by land-use control and infrastructure provision.

Entrepreneurial Approaches Have Distinct Characeristics:
Pro-active: It aims to foster local economic development through "positive" rather than "passive" approaches with a focus on growth creation rather than management;
Market-led: New approaches are becoming increasingly market driven - public policy makers can use market mechanisms to achieve public goals;
Inventive: policy planning in the new approaches shows strong characteristics once distinctive to private businesses, such as risk-taking, inventiveness, promotional and profit motivation. Many methods employed by policy planners originated in the private sector. Above all, strategic planning forms the backbone of the new approaches, as a means to plan effectively for and manage the future at a time when the future itself appears increasingly uncertain.

Entrepreneurial policy making at the local and regional level has the potential to transform cities. However, there are many pitfalls. Policy should aim to:

Build Unique Local Assets
Too much dependence of planners on a handful of successful cases as “good practices” resulted in an ironic situation that place-marketing, which originally aimed at differentiating a city from others, has in fact seriously undermined the local distinctiveness and uniqueness of many cities, and created “analogous cities”, which refers to the situation where it is difficult to differentiate a city from others both in actual physical forms and place
marketing narratives. Planners’ efforts to appeal to stereotyped images of knowledge workers’ tastes also contributed to the creation of built environments that are strongly characterized by similarities in tastes and their consumption-oriented nature, which favours selected social groups with considerable disposable income.

This clearly points to the necessity to re-construct future policy planning around the notion of
identifying and building up unique local assets rather than focusing too much on image creation. Place promotion without unique local assets would fail to leave long-lasting effects on the local economy.

Plan for the Long-Term
Past policy experience strongly indicates that in order for urban entrepreneurialism to address effectively long-standing urban issues, it is necessary to incorporate policy measures to translate short-term impacts gained by city promotional strategies into long-term effects on local economies. Such a process requires local capacity to assimilate short term economic gains into long-standing economic restructuring.

Thus, policy efforts to build up local economic capacity are essential, and these are precisely what have often been neglected by policy planners who are under pressure to maximize short-term gains by attracting external elements.

Take a Holistic Approach
Urban policy planners are increasingly required to address wider policy objectives; not only economic but also social, environmental and cultural policies are demanding policy planners’ attention. It is also expected to play a positive role in a global policy agenda rather than simply reacting to it.

Hence, urban entrepreneurialism should adopt more holistic approaches by incorporating wider policy objectives into coherent and complementary strategies. For example, market-led approaches, which have become the guiding principle due to their capacity to respond to rapid changes, should aim at achieving wider policy goals by positively interacting with market forces, not simply by following them.

Mobilize and Empower a Variety of Actors
Public-private partnership provided a collaborative framework that is flexible and efficient. However, the narrowness of the scope of stakeholders that participate in the process has often made it difficult for residents to share the strategies coming out of such partnerships. The corporatist mode of decision making sometimes created the image that important decisions were made behind closed doors in an elitist circle to which ordinary citizens did not have proper access. Such criticism suggests that urban entrepreneurialism has often failed to secure citizen support, which is crucial for the long-term viability and effectiveness, as well as the democratic legitimacy, of entrepreneurial strategies.

An entrepreneurial urban economy will only emerge through an active process to nurture entrepreneurial culture among residents. All the actors in the local economy, including residents, business executives and government officials, have to learn how to be entrepreneurial.

A New Role for Local Governments
The widened scope of participants will pose a challenge for local governments. There is a widespread concern about the efficacy of traditional local government structures and practices in planning in the face of the shift from government towards governance. To continue to play a central role, they need to develop new styles of operation which are amenable to contemporary modes of governance. This would require a departure from hierarchical and bureaucratically-determined practices that are driven by rules and regulations and which are slow to respond to new demands that arise.

The essence of urban entrepreneurialism is to apply innovative thinking to policy planning in a strategic way, based on long-term vision. Such attitude is an essential property not only of competitive private enterprises in the global market, but also of competitive cities in inter-city competition on a global scale. Urban entrepreneurialism should manifest itself in identifying and building up unique local assets, in harnessing “old policy tools” with
totally new perspectives, and in mobilizing the collective potential of all the actors in the local economy by motivating and empowering them. The question that a policy planner employing an entrepreneurial approach should always ask himself is just how entrepreneurial his approach is in this sense.

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