Ontario Network on the Regional Innovation System

Government of Canada Launches Competition for Business-Led Centres of Excellence

The Government of Canada recently took the next step in its efforts to support private sector competitiveness by calling for applicants for the Business-led Networks of Centres of Excellence (NCE) program. This $46 million initiative, announced in Budget 2007, is established to fund large-scale, collaborative networks that support private sector innovation. The money will create up to five new Business-led NCEs and support them for four years, starting in 2009. The networks will be proposed and led by private sector consortia and will focus on research in five priority areas.

Ontario Government Announces $165 Million Venture Capital Fund

A new $165-million Ontario Venture Capital Fund will help create the jobs of the future by boosting cutting-edge companies here in the province. The McGuinty government has signed a letter of intent with leading Canadian institutional investors — including OMERS Administration Corporation, RBC Capital Partners, Business Development Bank of Canada and Manulife Financial — to create the new fund.

EDITOR'S PICK                                                             [Table of Contents]

Innovation Clusters: A Statistical Analysis and Overview of Current Policy Support

EU Directorate General of Enterprise and Industry
Clusters can be powerful engines of regional economic development and drivers of innovation. They enable companies to integrate in clusters where they can collaborate with and learn from research institutions, suppliers, customers and competitors. This report offers an overview of the main statistical findings obtained so far by the European Cluster Observatory. The report also describes the main Community instruments in support of cluster development giving particular emphasis on the aspects of trans-national cooperation. it puts into a framework the different EU activities carried out in support of clusters and cluster policy development such as the on-going projects of Europe INNOVA and PRO INNO Europe initiatives, the European Cluster Observatory , the European Cluster Alliance and the European Cluster Memorandum.

Entrepreneurship and the American City

Edward Glaeser, Harvard Institute of Economic Research
Why do levels of entrepreneurship differ across America’s cities? This paper presents basic facts on two measures of entrepreneurship: the self-employment rate and the number of small firms. Both of these measures are correlated with urban success, suggesting that more entrepreneurial cities are more successful. There is considerable variation in the self-employment rate across metropolitan areas, but about one-half of this heterogeneity can be explained by demographic and industrial variation. Self-employment is particularly associated with abundant, older citizens and with the presence of input suppliers. Conversely, small firm size and employment growth due to unaffiliated new establishments is associated most strongly with the presence of input
suppliers and an appropriate labor force. The paper also finds support for the Chinitz (1961) hypothesis that entrepreneurship is linked to a large number of small firms in supplying industries. Finally, there is a strong connection between area-level education and entrepreneurship.

STATISTICS & INDICATORS                                                 [Table of Contents]

MetroNation: How US Metropolitan Areas Fuel Prosperity

Brookings Institution
The stakes are high as the United States approaches the 2008 Presidential election. Often unsettling forces are rapidly transforming the world and the rules that govern how families and communities thrive. These forces pose a series of historic challenges and opportunities for the U.S.: How does the American economy maintain its edge in the face of quickening competition abroad, and continued restructuring at home? How can the education and skills of workers grow, and secure more broadly shared gains from economic growth? How will the nation combat the threat from global climate change and achieve greater energy independence, given continued U.S. population growth? In short, the effort to secure American prosperity in the 21st century confronts a series of new realities.

This report argues that the ability of the U.S. to meet the great economic, social, and environmental imperatives of our time rests largely on the health and vitality of metropolitan areas. Yet U.S. metropolitan areas, for all their economic might, face a series of troubling challenges that hold back the country’s prosperity. Local and regional leaders across the U.S. confront a legacy of federal government policy maladapted to dynamic metropolitan realities. Along these lines, MetroNation draws the following conclusions:

1. New challenges to American prosperity have emerged. Profound changes in the global and domestic
economy present America with a series of historic challenges:

·         The U.S. economic powerhouse faces expanded global competition. Economic liberalization throughout the world, skills upgrades in developing countries and massive technological advances mean that the United States faces expanded competition for jobs and investment. China and India alone accounted for more than 40 percent of global economic growth from 2000 to 2005.

·         The domestic economy continues to restructure. The share of U.S. jobs in manufacturing has fallen from 31 percent to 10 percent over the past half century. Meanwhile, services employment has risen to two-thirds of all U.S. jobs. Accelerated offshoring in both sectors threatens to bring about economic dislocation or American workers and firms in the future.

·         The U.S. labor market has become more economically polarized. Wages for highly educated workers have risen considerably over the past 30 years, while those for less educated workers have stagnated or fallen. In part due to this polarization, the typical American family has not benefited from recent economic growth to the same degree as in previous
generations.

·         Demographic shifts portend new economic challenges. An aging workforce, combined with projected population increases among historically less educated groups, will test the nation’s ability to sustain its economic leadership, achieve rising standards of living for all, and provide for a growing retired population in the future.

2. America’s metropolitan areas are the engines of national prosperity. In a global economy marked by a highly competitive, interlinked network of major city regions, America’s efforts to extend prosperity depend more than ever on the success of its metropolitan areas:

·         True prosperity requires productive, inclusive, and sustainable growth. The U.S. must aspire and act to maintain its economic leadership, foster a strong and diverse middle class, and advance efforts to address climate change and achieve energy independence. These three growth goals are not mutually exclusive, and can actually reinforce one another.

·         Investments in innovation, human capital, and infrastructure help drive American prosperity. Strategic public and private investments in these core assets and in the quality places where they come together most forcefully contribute to productive, inclusive, and sustainable national growth.

·         America’s metropolitan areas aggregate its key drivers of prosperity. The 100 largest U.S. metropolitan areas contain 65 percent of the nation’s population and 68 percent of its jobs, but gather even larger shares of innovative activity (78 percent of U.S. patent activity), educated workers (75 percent of graduate degree holders), and critical infrastructure (79 percent of U.S. air cargo). As such, they generate three-quarters of U.S. gross domestic product. Their successes, and those of the nation’s smaller metro and rural areas, are inextricably linked.

·         Major metro areas strengthen key prosperity drivers. These metro areas possess agglomeration economies -- geographic clusters of related firms and large pools of workers -- that enhance productive growth. What is more, these economies foster the quality places -- vibrant downtowns, attractive town centers, and historic older suburbs -- that by virtue of their density and diversity help speed the acquisition of human capital, and contribute to resource-efficient sustainable growth.

3. To achieve American prosperity, a new federal partnership to promote metropolitan prosperity is needed. For all their aggregate strength, America’s metropolitan areas face a series of troubling challenges that hold back their collective prosperity. Their collective productivity growth rate has begun to slip, their college degree-earning pace has slowed, and their sprawling development patterns continue to fuel elevated greenhouse gas emissions. Yet our metropolitan leaders find our national government absent and adrift, largely unaware of the new economic, social, and environmental realities enveloping metropolitan America. A new partnership between federal, state, local, and private-sector leaders, a Blueprint for American Prosperity, is needed to help metropolitan areas innovate and prosper in a fast-moving, unpredictable world.

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