Ontario Network on the Regional Innovation System

Minister of Industry Appoints Members of Science and Innovation Council

The Honourable Jim Prentice, Minister of Industry, recently announced the appointment of 17 members to the new Science, Technology and Innovation Council. Canada's Science and Technology Strategy, Mobilizing Science and Technology to Canada's Advantage, committed the Government of Canada to consolidate external science and technology advisory bodies and launch the Science, Technology and Innovation Council. The Council will provide the government with policy advice on science and technology issues and will produce regular national reports that measure Canada's science and technology performance against international standards of excellence. It will play a vital role in providing science and technology advice on issues, identified by government, which are critical to Canada's economic development and social well-being.

Canadian Government Funds Seven Centres of Excellence

The Honourable Jim Prentice, Minister of Industry, and the Honourable Jim Flaherty, Minister of Finance, recently announced $105 million to seven centres of excellence focused on priority areas in research and commercialization for Canada. The seven centres of excellence focusing on research and commercialization are as follows: the Li Ka Shing Knowledge Institute at St. Michael's Hospital, affiliated with the University of Toronto; the Brain Research Centre at the University of British Columbia; the Canada School of Energy and the Environment at the University of Alberta, the University of Calgary and the University of Lethbridge; the Heart and Stroke Foundation Centre for Stroke Recovery, affiliated with the University of Toronto and the University of Ottawa; the Montreal Neurological Institute at McGill University; the National Optics Institute in Québec; and the Life Sciences Research Institute in Halifax, affiliated with Dalhousie University

EU Blue Card to Attrach Highly Skilled Workers to the European Union

Europe is experiencing an increasing shortage of highly-skilled workers, especially in the field of engineering and informatics. At the same time, the European Union's population is ageing rapidly. The EU Blue Card proposal aims at attracting these immigrants to the EU and is supposed to make the EU more attractive as a destination in the global competition for talent and skills. On October 23rd the European Commission adopted two long-awaited legislative proposals on economic migration: A draft Framework Directive on the admission of highly-qualified migrants to the EU (the so-called EU Blue Card proposal); and A draft Directive establishing a single application procedure for a single residency and work permit and a common set of rights for third-country workers legally residing in the EU.

EDITOR'S PICK                                                             [Table of Contents]

Knowledge Flows Through Social Networks in a Cluster: Interfirm Vesus University-Industry Contacts

Christian R Ostergaard, DRUID
Knowledge spillovers from a university to the local industry play an important role in clusters, but we know little about these spillovers. This paper examines empirically the extent of university-industry informal contacts. Furthermore, it analyzes the characteristics of an engineer that acquires knowledge from informal contacts with university researchers. The university-industry contacts are compared with results for interfirm contacts. The research shows that the interfirm informal contacts are more numerous than university informal contacts. Likewise, knowledge is more frequently acquired from other firms than through university-industry contacts. Engineers that have participated in formal projects with university researchers and engineers that are educated at the university have a higher likelihood of acquiring knowledge from informal contacts with university researchers.

Developing Photonics Clusters: Commonalities, Contrasts and Contradictions

Jorg Sydow et al., AIM Research
This paper reports a comparative case study of four major photonics clusters in the United States, Great Britain and Germany, focusing on how they have emerged and have been deliberately developed. The authors look more deeply into governmental issues and micro-processes of clusters that are not usually the focus of attention in studies based upon industrial economics or regional sciences perspectives.

STATISTICS & INDICATORS                                                 [Table of Contents]

A Race to the Top: A Review of Government's Science and Innovation Policies

Lord Sainsbury of Turville
A country’s innovation rate depends on inter-linked activities which include: industrial research; publicly funded basic research; user-driven research; knowledge transfer; institutions governing intellectual property and standards; supply of venture capital; education and training of scientists and engineers; innovation policies of government departments; science and innovation policies of Regional Development Agencies (RDAs); and international scientific and technological collaboration. The two most commonly used measures of innovation performance are the quantity of industrial research and the volume of patenting. The UK’s performance is unimpressive on both counts. However, performance is greatly affected by the structure of industry. UK companies spend similar proportions of their sales on R&D as their competitors within a sector, but have a stronger presence in successful sectors where little, if any, R&D investment as a percentage of sales (e.g. oil and gas, financial services) is reported. This suggests that rather than seeking to raise the amount of research performed by all industries policies should focus on the four major goals developed by the TSB:
• to help leading sectors and businesses to maintain their position in the face of global competition;
• to stimulate those sectors and businesses with the capacity to be among the best in the world to fulfil their potential;
• to ensure that the emerging technologies of today become the growth sectors of tomorrow;
• to combine all these elements in such a way that the UK becomes a centre for investment by world-leading companies.

Trends in publicly funded R&D show that there has been a steady increase in the amount of money spent by the Research Councils, but a decline in government department funding of R&D as a percentage of GDP, mainly accounted for by a decline in MOD spending. This is of concern for the quality of public policy-making, and the stimulation of innovation in the companies with which government departments interact. Research outputs from publicly funded R&D remain, however, of a very high standard. On the
latest data (2004), the UK was ranked second in the world to the USA in its share of world publications (9 per cent) and world citations (12 per cent). The UK is a more consistent performer across the range of research disciplines than most other countries, ranking second in the world in seven of the ten disciplines.

The policy response to the UK’s innovation performance needs to consider two crosscutting issues:

1. The different requirements of manufacturing and services: we need to build up skills in the management of fragmented manufacturing chains, and to focus research efforts and skills development on the complex, high-value production activities likely to be successful in high-cost economies. A better understanding of how innovation takes place in the very different industries which make up the services sector is required, so that the Departments for Innovation, Universities and Skills (DIUS) and for Business, Enterprise and Regulatory Reform (DBERR) can apply their current policy initiatives more effectively.

2. The role of Higher Education Institutions (HEIs) in the knowledge economy: HEIs play an increasing role in the economy and the UK, with its world-class universities, is well placed. A diversity of excellence is required, with research universities focusing on curiosity-driven research, teaching and knowledge transfer, and business-facing universities focusing on the equally important economic mission of professional teaching, user-driven research and problem-solving with local and regional companies. Research, teaching and knowledge transfer are fundamental roles for any HEI. But the way these are done will be very different and some students will be attracted by one type of educational experience and some by the other.

POLICY RECOMMENDATIONS

A new leadership role for the TSB. The TSB has a key role to play in addressing the fragmented technology and innovation landscape in the UK. Chapter 3 describes how its transformation into a business-driven Executive Non-Departmental Public Body in July 2007 has the potential substantially to improve the UK’s innovation performance. The Review recommends that the TSB
be given a new leadership role, working with the RDAs, the Research Councils, government departments and the economic regulators to co-ordinate public sector technological innovation activity, leverage public sector resources and simplify access to funds for business. With increased resources the TSB should extend into new areas, such as the services sectors (including the creative industries) in which technological innovation is important. It should develop an international strategy, and it should work more closely with UK Trade and Industry (UKTI) to enhance the UK’s position as a centre for investment by world-leading companies.

Building on success in knowledge transfer. The translation of university research into commercial goods and services has significantly increased in the past decade. The number of spinoff companies, the number of patents, the income from licensing agreements and the income from business consultancy have all increased (see Chapter 4). The performance of universities in this
area is now comparable with US universities. There are also significant clusters of high technology businesses growing up around these world-class research universities (see Chapter 9). Chapter 4 outlines the four main areas in which the UK can strengthen its knowledge transfer.

Using intellectual property rights, standards and metrology to improve knowledge transfer. Effective knowledge transfer requires specific institutional arrangements to pass knowledge from research establishments into wealth-creation and public policy-making, and an infrastructure of intellectual property rights, standards and metrology. Historically, the information contained in patent databases has not been fully exploited, with estimates that up to 30 per cent of worldwide R&D projects are merely a duplication of existing technology. Chapter 5 recommends that more effective use be made of the UK Intellectual Property Office (UKIPO) patent registration database, through open access and electronic searching.

Targeted support for early-stage high-technology companies. Venture capital forms an integral part of the innovation system by providing a vital early-stage source of finance and management and market experience. However, Chapter 6 shows that early-stage high-technology start-ups have experienced some difficulties in attracting equity finance, due to the specific risks involved in these investments. The Review recommends that, subject to the BSSP, a nationally-agreed specification for proof-of-concept funding should be developed to provide initial funding to entrepreneurs. Together with other recommendations, such as reforms to the Small Business Research Initiative, the new formula for HEIF and the support of RDAs for incubators, high-technology clusters and business-readiness services, this should provide a significant boost for investment in early-stage high-technology companies.

A major campaign to enhance the teaching of science and technology. Demand for science, technology, engineering and mathematics (STEM) skills will continue to grow. The UK has a reasonable stock of STEM graduates, but potential problems lie ahead. There has been a 20-year decline in the number of pupils taking A-level physics. The Review recommends a major campaign to address the STEM issues in schools. This will raise the numbers of qualified STEM teachers by introducing, for example, new sources of recruitment, financial incentives for conversion courses, and mentoring for newly qualified teachers.

A key role for government departments. Government departments can play an important role in stimulating innovation in the companies with which they interact, but in the absence of a clear directive and adequate resources, they are failing to meet the challenge. Innovation should be embedded in Departmental Strategic Objectives and the Director of Innovation at DIUS should produce an annual Innovation Report on the innovation activities of the DIUS, including the TSB, other government departments and the RDAs. Chief Scientific Advisors should work more effectively with their departments and with the Treasury spending teams to agree and manage their R&D budgets, and together to identify and act on cross-cutting areas of research.

Increasing regional focus and resource on science and innovation. National policies create a framework for innovation but the locus of much innovation is at the regional level where employees, companies, universities, research institutions and government interface more directly. There is increasing recognition of the potential of RDA science and innovation polices to drive regional economic growth.

Linking up with centres of excellence around the world. International collaboration is important if the UK is to stay at the leading edge of world science and innovation and benefit from the 90 per cent of the world’s scientific output that is produced elsewhere. The UK needs to make this collaboration a core part of its strategy, and to improve co-ordination of the UK bodies involved. The Review recommends that a number of the Global Science and Innovation Forum (GSIF) proposals be put into immediate effect: Research Councils should focus resources into single points of contact in key countries; a new fellowship scheme and alumni network should be set up by the Royal Society, with support from the other academies; the TSB should develop an international strategy; the Science Bridges scheme, establishing formal links with universities overseas, should be extended; and the Director-General of Science and Innovation should work with the USA to solve “the double jeopardy” issue for scientists.

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