Ontario's Regional Economic Development and Innovation Newsletter



Issue #157                                                           October 1, 2007

  Studies & Publications: Announcements | Editor's Pick | Innovation Policy |Cities and Regions | Statistics and Indicators| Policy Digest | Events
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This newsletter is published by ONRIS at the Centre for International Studies, 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                                                          [Table of Contents]


TRRA Launches Online Regional Fact Base

The Toronto Region Research Alliance (TRRA) is pleased to launch the Map and Regional FactBase section of its website. The Regional FactBase contains a wealth of information about the Toronto Region - its world-renowned institutions, diverse and multi-faceted industries, and all-round prominence on the international stage. Data files, fact sheets, reports, links, and other resources are available to view and to download. The Toronto Region consists of Durham, Halton, Hamilton, Peel, Toronto, Waterloo, Wellington, and York regions. The FactBase features a map of the Toronto Region with facts about the region's communities and institutions. The map transitions between municipal- and community-level information and highlights larger education and research institutions.

EDITOR'S PICK                                                             [Table of Contents]


National Systems of Innovation and the Role of Demand: A Cross Country Comparison

M. Abraham Garcia-Torres, UNU-MERIT
This article focuses on the role of demand in the National System of Innovations: why it is so important, and how does it affect the dynamics of the system and the flow of inventions and innovations. To study the evolution and the dynamics of the different systems a series of composite indicators is constructed. In the paper it will be argued that the system of innovation can be defined by four different dimensions: Social and Human Capital, Knowledge Creation, Innovation capacity of the Supply and Innovation from the Demand. The evolution of these dimensions is studied over a period of fifteen years and compared across fourteen European countries. This structure allows to study different dynamics, and evolution over time of different systems. The study highlights the weak links of the system, comparing each national system with the performance of the rest of the states considered. The
identification of the weakness and the evolution of the weakness over the time provides interesting policy conclusions. The aim of the paper is also to contribute to the theory of composite indicators by offering a new approach to selecting effective indicators.

INNOVATION & RELATED POLICY                                  [Table of Contents]


Innovation Through Global Collaboration: A New Source of Competitive Advantage

Alan MacCormack, Theodore Forbath, Peter Brooks, and Patrick Kalaher, Harvard Business School
Collaboration is becoming a new and important source of competitive advantage. No longer is the creation and pursuit of new ideas the bastion of large, central R&D departments within vertically integrated organizations. Instead, innovations are increasingly brought to the market by networks of firms, selected according to their comparative advantages, and operating in a coordinated manner. This paper reports on a study of the strategies and practices used by firms that achieve greater success in terms of business value in their collaborative innovation efforts. The paper’s basic finding is that firms should not just build international alliances that are based on costs. Overseas collaborators should not be treated as suppliers, but as real partners. Effective firms also reorganize and restructure their operations to help support international R&D alliances. If firms hope to build new innovations via global partnerships, they will need to move away from a traditional “outsourcing” mindset to a new approach that fosters real collaboration across borders.

OECD Reviews of Innovation Policy: China - A Synthesis Report

OECD
This study assesses China’s current innovation policy framework. The report recognizes China’s impressive achievements, and especially highlights the Chinese government’s capacity to mobilize investment resources for science and technology. China ranks No. 2 in the world (behind the US) in the number of employed researchers, and has sustained a 19% annual R&D spending increase for more than ten years. While the input side is impressive, the output performance has lagged. China’s performance still lags in many critical areas, such as patent applications, funding for basic research, and the quality and productivity of research personnel and scientists. The report concludes with suggestions for how China can improve its support for innovation. These recommendations include strengthening of China’s weak intellectual property regime, improving corporate governance practices, using state procurement to help stimulate innovation, and shifting investment away from its current emphasis on building research infrastructure to providing more support to nurture human capital.

Experiences of the US Knowledge Transfer and Innovation System

ProTon Europe
This report is based on the insight gained during a visit of European Union and Member States officials and the chair of ProTon Europe to the United States. The visit consisted in a seminar on the US innovation system held in Washington DC, 26 March 2007 followed by meetings with university staff at four selected US universities with an outstanding record in successfully transferring knowledge and technology to industry. This report outlines the US model of innovation and draws some important lessons for European countries regarding the roles of philanthropy, institutional culture and investment for successful technology transfer and commercialization.

CITIES, CLUSTERS & REGIONS                                          [Table of Contents]


Silicon Valley in the Polder? Entrepreneurial Dynamics, Virtuous Clusters and Vicious Firms in the Netherlands and Flanders

L. Hulsink, H. Bouwman, T Elfring, Erasmus University

High-technology start upsdo not operate in a vacuum and innovation is not a solitary activity. The activities of technology-based firms are embedded in socio-economic networks with other companies, investors, universities, vocational institutions, etc. The geographical proximity of those institutions and infrastructural hubs play a role in determine the locational decisions of ICT firms. Furthermore, many high-tech companies shape clusters around areas where their major customers are located. The topic of this paper is regional clustering within the context of Internet and ICT technology. A dynamic model previously developed for the analysis of ICT-entrepreneurship and networking is applied to a critical analysis of five ICT-clusters in the Netherlands and Flanders (Northern part of Belgium): the Louvain Technology Corridor, Flanders Language Valley, Amsterdam Alley, Dommel Valley, and Twente.

Gatekeepers in Regional Networks of Innovators

Holger Graf
The internal density of a local network is said to increase the region-specific knowledge stock and might lead to a comparative advantage. However, it might also lead to a lock-in situation, if local trajectories are directed towards inferior solutions. Accordingly it is argued that successful clusters are characterized by the existence of gatekeepers, i.e. actors that generate novelty by drawing on local and external knowledge. This paper attempts to answer questions related to the role and characteristics of gatekeepers within regional innovation systems by applying social network analysis based on patent data for four East-German regions. The regional
networks appear to be significantly different with respect to the overall degree of interaction and with respect to their relative outward orientation. Concerning the characteristics of gatekeepers, size does not play the major role for being a gatekeeper. It is rather absorptive capacity that matters for gatekeepers. It also shows that public research organizations serve the functions of a gatekeeper to a higher degree than private actors.

STATISTICS & INDICATORS                                                 [Table of Contents]


Michigan's University Research Corridor

Anderson Economic Group
The release of an independent analysis of the economic impact of the Michigan ’s three research universities, collectively known as the University Research Corridor (URC), provides timely support for the argument to sustain or increase state investments in its higher education establishment. Findings of the analysis indicate the URC is a major asset to the state’s economy, with contributions of $12.8 billion in 2006. The URC helped create 68,803 jobs in the state and produced 54 percent of the state’s science and engineering degrees, according to the analysis. This analysis is the first in a series of annual reports that measures the Research Corridor universities against six comparable university research cluster regions in California, Illinois, Massachusetts, North Carolina and Pennsylvania. Comparisons are measured within student enrollment, academic R&D spending and technology transfer.

Key Indicators of the Labour Market

ILO
A new International Labor Organization (ILO) report finds that the US still leads the world in labor productivity. The US workforce provides by far the greatest value added per worker ($63,885) than any other economy in the world. The next closest competitor, Ireland, generates $55,986 value added per person employed. America’s productivity edge has many causes, but one key factor is that Americans work longer hours. If hours worked are taken into account, Norway slightly outperforms the US. Not surprisingly, East Asia has shown the greatest recent increases in labor productivity. In that region, the value added per worker has doubled over the past decade. Yet, this strong performance has still only moved East Asia’s labor productivity up to 1/5 (up from 1/8 in 1996) of the level found in developed economies.

POLICY DIGEST                                                                  [Table of Contents]

Higher Education and Regions: Globally Competitive, Locally Engaged

OECD
T his publication explores a range of helpful policy measures and institutional reforms. Drawing from an extensive review of 14 regions across 12 countries as well as OECD territorial reviews, it considers the regional engagement of higher education regarding teaching, research and service to the community. It offers answers to the following questions: What is higher education’s regional engagement all about? What are its drivers and barriers? What does regional engagement mean for the governance and management of higher education institutions, for regions and for nations? And how does regional engagement fit in with the pursuit of world class academic excellence?

In the past, neither public policy nor the higher education institutions (HEIs) themselves have tended to focus strategically on the contribution that they can make to the development of the regions where they are located. Particularly for older, traditional HEIs, the emphasis has often been on serving national goals or on the pursuit of knowledge with little regard for the surrounding environment. This is now changing. To be able to play their regional role, HEIs must do more than simply educate and research – they must engage with others in their regions, provide opportunities for lifelong learning and contribute to the development of knowledge-intensive jobs which will enable graduates to find local employment and remain in their communities. This has implications for all aspects of these institutions’ activities – teaching, research and service to the community and for the policy and regulatory framework in which they operate.

In the regions involved in the OECD study, partnerships are being developed between HEIs and the public and private sector to mobilize higher education in support of regional development. While the case for engagement is patchy, it is becoming acknowledged across a wide range of HEIs in most regions. The partnerships, which are in most cases at early stages, are often bottom-up initiatives with limited support from central governments. The early stages are characterized by numerous small scale and short term projects championed by key individuals. The environment for higher education to engage in regional development across OECD countries remains highly variable.

There are a number of key barriers identified by this report that need to be overcome in the implementation of effective regional eduction policy:

Overcoming b arriers to promoting innovation with a regional focus:
Despite the existing constraints, the new tasks of HEIs have increased as countries have reinforced the HEI apparatus in relation to firms and regional economies. The policies have had a common goal: to transform each HEI into an engine for growth. The efforts have often been indirect i.e. granting enhanced autonomy to HEIs and improving framework conditions and incentives to co-operate with the private sector. Two prominent approaches have been: enhancing the role of tertiary education within regional innovation
systems and enhancing the participation of HEIs in cluster type initiatives. Temporary incentives have been developed in the form of grants, calls for projects or joint programmes. Policies have often prioritized the uptake and development of high technologies, while mechanisms to support social entrepreneurship and innovation for wider needs of excluded groups in rural areas and inner cities have been limited. There has also been less emphasis on services, which account for 70% of the workforce in the OECD countries.

Overcoming barriers to developing human capital within regions
Higher education can contribute to human capital development in the region through educating a wider range of individuals in the local area, ensuring that they are employable when they leave education, helping local employers by responding to new skills requirements, ensuring that employees go on learning by supporting continuous professional development, and helping attract talent from outside. Widening access to higher education is a national as well as a regional task, but the regional dimension is particularly significant in countries with wide disparities. Some countries, for example Australia, have introduced a specific regional dimension to the higher education equity initiatives. Given that one-third of working age adults in the OECD countries have low skills, up-skilling and lifelong learning are particular challenges. HEIs can also improve the balance between labour market supply and
demand. This requires labour market intelligence and sustained links with local businesses, communities and authorities.

Overcoming barriers to promoting the social, cultural and environmental development of regions
Regional development is not only about helping business thrive: wider forms of development both serve economic goals and are ends in themselves. HEIs have long seen service to the community as part of their role, yet this function is often underdeveloped. Few OECD countries have encouraged this type of activity through legislation and incentives. The mandatory social service for higher education students in Mexico provides an interesting model for countries seeking to mobilize higher education towards social goals.

In regional engagement much depends on the institutional leadership and entrepreneurialism of HEIs. Mainstreaming the regional agenda and scaling up the institutional capacity from individual good practice cases to a welldeveloped system requires senior management teams able to deliver the corporate response expected by regional stakeholders, modern management and administration systems (human resources management system and financial management system underpinned by modern ICT systems), transversal mechanisms that link teaching, research and third task activities and cut across disciplinary boundaries, permanent structures that enhance regional engagement. There is also a need to ensure that units established to link the HEIs to the region, such as science parks, centres of continuing education and knowledge transfer centres do not act as barriers to the academic heartland or provide an excuse for detachment. Finally, there is a need to acknowledge that regional engagement can enhance the core missions of teaching and research and that the region can be seen as a laboratory for research projects, a provider of work experience for students and a source of financial resources to enhance the global competitiveness of the institution.

EVENTS                                                                               [Table of Contents]


Working Lunch: Global Futures for Canada's Global Cities

Toronto, 1 October, 2007
The ongoing fiscal crisis in Toronto has become a hot-button municipal issue that is front and centre in the Ontario provincial election.  Faced with a budget shortfall in excess of $500 million, mayor David Miller has been forced to cut services and search for new revenue sources, and despite recent pre-election promises of new dollars from the McGuinty government, long-term municipal funding remains tenuous. Please join IRPP President Mel Cappe, author Thomas J. Courchene (IRPP and Queen’s University) and commentator Joe Berridge (Urban Strategies Inc.) for a stimulating discussion of Toronto’s fiscal weakness, how it limits the city’s global competitiveness, and the implications for intergovernmental relations. 

The Ecology of a Creative Community - 6th Annual Conference of the Creative City Network of Canada

Edmonton, 10-13 October, 2007
This conference will bring together municipal cultural planning and development staff from communities across Canada for professional development sessions, dialogue, keynote speakers, and networking opportunities. While the conference is primarily tailored to the needs of our members, registration is open to anyone wishing to expand their knowledge in the cultural planning and development sector.

The Role of Universities in Regional Development and Growth

Cambridge, UK, 12 October, 2007
Over the past six years, Cambridge University and the Massachusetts Institute of Technology have explored new ways in which universities, working with industry and other stakeholders, might help to enhance the productivity, competitiveness and entrepreneurship of the UK. In the coming months, The Cambridge-MIT Institute is running a series of workshops presenting CMI case studies alongside examples from other organisations, in order to share lessons learned and provide insight into effective practices that successfully impact productivity, competitiveness and entrepreneurship. The purpose of this workshop is to understand how information and knowledge is diffused within the business community and transferred between universities and firms, and how these processes might be supported and enhanced. The workshop will bring together specialists from the business, policy and academic communities to provide insights on how regional knowledge exchange initiatives work and the role of universities in different spatial and economic contexts.

4th Annual Canadian Business Leadership Forum

Toronto, 18 October, 2007
Join Canadian Business Leaders and speakers at this forum. Speakers include: 'Great ideas are a dime a dozen. It’s What You do With them that Counts' by Bill Buxton, Principal Researcher, Microsoft Corp; Keeping the golden arches shining by Louie Mele, President, McDonald’s, and many others.

Transforming Regional Economies - SSTI Annual Conference

Baltimore, 18-19 October, 2007
SSTIs annual conference offers exposure to some of the best state and regional approaches for a brighter economic future, unrivaled networking opportunities with those in the TBED community, thoughtful exchange with peers from across the U.S. The SSTI annual conference promises quality. With more than 20 carefully planned sessions, conference participants are ensured access to the latest thinking and best practices in tech-based economic development. Limited attendance further affords one the opportunity to engage in open, creative dialogue, and registration fees are kept reasonable so you can send your entire leadership team. All added up, SSTI’s annual conference is the field's most stimulating and rewarding professional development investment of the year.

Atlanta Conference on Science, Technology, and Innovation Policy 2007

Atlanta, October 19-20, 2007
The landscape of global innovation is shifting, with new problems and actors emerging on the scene. National governments are looking for new strategies, and they are turning to the science, technology, and innovation (STI) policy research community for models and research results to tell them what works and what doesn’t, under what circumstances. The Atlanta Conference provides an opportunity for the global STI policy research and user communities to test models of innovation, explore emerging STI policy issues, and share research results.

Turning Knowledge into Practice: Getting More out of Public Investment in Innovation

Berlin, Germany, 23-24 October, 2007
The main focus of this conference is on the need to measure and improve the effectiveness of publicly-funded programs, in particular with regard to research and innovation. The conference will provide policy makers, program owners and managers as well as companies and innovation experts with concrete information about the state of the art of the evaluation and impact assessment of publicly-funded programs.

3rd International Conference on Services and Innovation

Dublin, Ireland, 7-8 November, 2007
The objective of this conference is to increase awareness and understanding of services innovation in a business environment and to: provide businesses (large and small), with practical steps and examples to develop innovation in services; help inform investors, researchers and policy makers about services innovation and learn about national and global developments and share practical experiences through case studies from established businesses.

Creativity, Entrepreneurship, and Organizations of the Future

Cambridge, MA, 7-8 December, 2007
Creativity is an essential element of success in contemporary organizations, yet much remains to be discovered about how creativity happens in the minds of individuals, in group processes and in entrepreneurial organizations. The conference will draw on scholarly work from multiple disciplines to deepen our understanding of creativity and entrepreneurship, and the ways in which their intersection might impact organizations of the future.

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.

>SUBSCRIPTIONS & COMMENTS                                                 [Table of Contents]

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This newsletter is prepared by Jen Nelles.
Project manager is David A. Wolfe.

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