Ontario's Regional Economic Development and Innovation Newsletter



Issue #198                                                         September 15, 2009

  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]

Prime Minister Announces a New Federal Economic Development Agency for Southern Ontario

Prime Minister Stephen Harper recently officially launched the Federal Economic Development Agency for Southern Ontario (FedDev Ontario). The launch is the final step in fulfilling a key commitment in the Federal Government’s Economic Action Plan. FedDev Ontario will support restructuring, community and business development, innovation and commercialization initiatives as well as other measures to promote economic diversification. It builds on the significant investments already being implemented through Canada’s Economic Action Plan.

New Book: Innovation System Frontiers: Cluster Networks and Global Value

Brian Wixted
Recent economic transformations in the world economy are progressing in two divergent directions – international production fragmentation and industrial agglomeration. Based on extensive data analysis and using models of interdependencies between key economies, this book analyses innovation systems that cross national borders. It shows that technological complexity is an important factor in the formation of highly specific production networks, and why, for a number of production systems, fragmentation and clustering are two sides of the same coin. By outlining the picture of a world economy structured around networks of clusters and joined together through systems of linkages of components, people and knowledge flows, the author helps to promote a better understanding of recent economic transformations.

EDITOR'S PICK                                                             [Table of Contents]

The Geography of Innovation: The Federal Government and the Growth of Regional Innovation Clusters

Jonathan Sallet, Ed Paisley and Justin Masterman, Science Progress
The United States requires innovation policies for which responsibility is shared between regional leaders and the federal government. Leadership must begin in the clusters themselves—with local understanding of competitive strengths and strategies to increase the shared advantages that economists recognize as “positive externalities.” The federal government, however, can and should assume a vital role in framing critical national challenges and facilitating the flow of information and expertise to and between regions. I should also help finance, in a competitive and leveraged fashion, valuable activities that clusters would otherwise be unable to undertake.

INNOVATION & RELATED POLICY                                  [Table of Contents]

Reverse Knowledge Transfer and its Implications for European Policy

Rajneesh Narula and Julie Michel
There is a growing international dispersion of R&D activities by MNEs for the purposes of maintaining and augmenting their knowledge assets. Firms need to tap into alternative knowledge sources , as home countries are rarely able to meet all their technological needs. However, accessing foreign knowledge implies integration with the host country innovation system that requires considerable time and resources. Although asset-augmenting activities are seen as primarily benefitting the MNE, this paper argues that home country innovation systems can also benefit from reverse knowledge transfer. Policy makers need to promote these linkages and flows, rather than seeing R&D internationalization as a threat to the home economy. New knowledge developed abroad by firms can and should be encouraged to be transferred to the rest of the firm and to the local environment of the home country.

Papers or Patents: Channels of University Effect on Regional Innovation

Robin Cowan and Natalia Zinovyeva, FEDEA
This paper analyzes empirically the channels through which university research affects industry innovation. It examines how the opening of new science, medicine and engineering departments in Italy during 1985-2000 affected regional innovation systems. It finds that creation of a new university department increased regional innovation activity 3-4 years later. On average, an opening of a new department has led to a twenty percent change in the number of patents filed by regional firms. Given that this effect occurs within the first half decade of the appearance of a new department, it cannot be ascribed to improvements in the quality and quantity of graduates. At the same time, traditional measures of academic research activity -publications and patents - can explain at most 50 percent of this effect, of which the lion's share is due to publications.

CITIES, CLUSTERS & REGIONS                                          [Table of Contents]

Improving the Cluster Infrastructure through Policy Actions

CLUNET-European Clustre Alliance
This report considers the issue of improving cluster infrastructure through cluster policy and it has been produced in the true spirit of collaboration by partners in the CLUNET INNO-Net project, together with a number of associate members of the ECA. The report puts forward and tests a cluster support environment model. It is not a “one size fits all” model but one that can be tailored, developed in part or in totality for regions that are either embarking on cluster development for the first time or looking to move forward to a more mature cluster policy.

A Practical Guide and Policy Implications for Developing Cluster Initiatives

The Competitiveness Institute
The cluster-based approach offers a new way of dividing and understanding an economy and complements economy-wide analyses. This toolkit offers a framework and key instruments on clusters for policymakers and practitioners working on competitiveness. This practical guide offers a rationale and a practical approach for using cluster analysis to enhance competitiveness in developing countries. While this document is not meant to be exhaustive, it presents a sound conceptual framework, outlines key instruments that can be used to initiate a cluster-based analyses and dialogues, and offers case studies on good practices and lessons learnt.

STATISTICS & INDICATORS                                                                  [Table of Contents]

The Global Competitiveness Report

World Economic Forum
Switzerland tops the overall ranking released by the World Economic Forum ahead of its Annual Meeting of the New Champions 2009 in Dalian. The United States falls one place to second position, with weakening in its financial markets and macroeconomic stability. Singapore, Sweden and Denmark round out the top five. European economies continue to prevail in the top 10 with Finland, Germany and the Netherlands following suit. The United Kingdom, while remaining very competitive, has continued its fall from last year, moving down one more place this year to 13th, mainly attributable to continuing weakening of its financial markets. The People’s Republic of China continues to lead the way among large developing economies, improving by one place this year, solidifying its position among the top 30. Among the three other large BRIC economies, Brazil and India also improve, while Russia falls by 12 places. Several Asian economies perform strongly with Japan, Hong Kong SAR, Republic of Korea and Taiwan, China also in the top 20. In Latin America, Chile is the highest ranked country, followed by Costa Rica and Brazil. 

Next Cities: The Top Canadian Hotspots for Young, Talented Workers

Next Generation Consulting
Next Cities™ are places with the assets and amenities that attract and keep a young, educated workforce. Think bustling city centres, walkable neighbourhoods, diverse career opportunities, and a vibrant art and music scene. Next Cities™ are places the next gen proudly calls “home.” Across its broad and diverse geography, Canada has a wide menu of urban centres from which to choose. This report classifies Canadian cities as "Super Cities". "Midsized Magnates" and "Mighty Micros". Cities are also grouped by their scores on attributes and attitudes to next generation values.

POLICY DIGEST                                                                  [Table of Contents]

Clusters, Innovation and Entrepreneurship

OECD
This publication explores the success of major innovation and entrepreneurship clusters in OECD countries, the challenges they now face in sustaining their positions and the lessons for other places seeking to build successful clusters.  What are the key factors for cluster success?  What problems are emerging on the horizon? Which is the appropriate role of the public sector in supporting the expansion of  clusters and overcoming the obstacles? The book addresses these and other issues, analyzing seven internationally reputed clusters in depth: Grenoble in France, Vienna in Austria, Waterloo in Canada, Dunedin in New Zealand, Medicon Valley in Scandinavia, Oxfordshire in the United Kingdom, and Madison, Wisconsin, in the United States.  For each cluster, it looks at the factors that have contributed to its growth, the impact of the cluster on local entrepreneurship performance, and the challenges faced for further expansion.  It also puts forward a set of policy recommendations geared to the broader context of cluster development.

Key Factors to Cluster Success

  • Networks, innovation and the supply chain: Clusters are often associaed with a strong fabric of SMEs, which often draw on collaborations with a few key large enterproses and/or universities and research organizations. Such networking provides the opportunities for identifying customers and sharing information, thus building supply chains. Governments could do more to stimulate bottom-up networks.
  • Leading enterprises: The case studies indicate considerable growth in the number of new and small firms and employment. The effect is partly due to the emergence and growth of high-tech and other leading enterprises in the cluster. Often, a few key firms account for the bulk of the expansion of high-tech enterprises in the cluster.
  • Strong universities and research centres: Leading universities and research centres of international repute create knowledge that can be transferrred to other actors in the local economy through spin-out companies, research collaborations, consultancy and informal contacts. They also create a critical mass of human capital, the cornerstone of the development of clusters.
  • Investment by the public sector: Public actors have often played a critical role in defining and implementing programs or initiatives in support of succesful clusters. This works best where there are strong mechanisms for partnership between the state, regional authorities, business support agencies and local firms and research organizations. Public support needs to be sustained over time and responsive to changes in markets and techologies.
  • Quality of life: A strong critical mass of highly skilled and entrepreneurial labour is at the heart of the emergence and development of successful clusters. This is related to the provision of a favourable environment such that human capital stays in the area and grows. Social networks, people-oriented services, communication and infrastructure are just some of the elements that have an impact on the attraction and retention of the highly skilled population.
  • Social capital: Social capital is a key factor in exchanges of ideas and innovation. Social networks and trust bring about the emergence and development of innovation by creating an environment open to exchange of information, capacities and knowledge, which create value within the cluster and thus enhance its size and standing on the international scene,

Obstacles to the Development of Clusters and Innovation

  • Inadequate incentives to the commercialization of public research: Much of the continued successful evolution of established clusters lies in their capacity to create new enterprises based on new technologies, products and markets. However, there are often institutional barriers to researchers and academics in creating new enterprises. Weak entrepreneurial culture and weak public support mechanisms can be strong obstacles to research commercialization.
  • Maintaining a critical mass of qualified labour: Clusters rely on trained qualified staff capable of anticipating and responding to changes in technologies and markets - not just highly skilled researchers but also support staff, lab assistants and the operators of sophisticated machinery. It is necessary to create mechanisms to ensure that human capital constantly adjusts to new needs. This requires both adequate training programs and an infrastructure and quality of life to attract labour from other areas.
  • Lack of seed capital: Most of the cases analysed show a lack of seed and venture capital, especially at the start-up pahse.
  • Lack of a coordinated policy for the cluster: A large number of organizations typically have a role to play in various aspects of the development of the clusters studied. However, often their activities are not well coordinated leading to problems in developing a comprehensive and forward looking strategy bringing to bear the resources of all the available actors in addressing current and future problems in cluster development.
  • Congestion: Rapid economic growth has in some cases led to significant problems of congestion in thier host agglomorations that may impede further growth.
  • Risk of social divisions: Cluster growth may also give rise to an increase in internal social inequalities within agglomorations between high tech employees and other strata of the population. This can stem not only from disparaties in incomes and levels of activity of various groups but also from increases in the costs of living caused by the spending power of new arrivals. These divisions can undermine support for the cluster by local authorities.
  • Ethical objections: Opposititon has been encountered for example to research activities in the fields of nanotechnology and life sciences.

Recommendations

Encouraging entrepreneurship

  • Supporting spin-outs
  • Leading a transition to the entrepreneurial university;
  • Supporting the launch and growth of start-ups.

Stimulating innovation and collaboration

  • Fostering SME-research collaboration;
  • encouraging collaboration: within the cluster and between clusters;
  • Encouraging enterprise networks;
  • Better marketing of products.

Coordinating public policies and regional initiatives

  • Strengthening public-public and public-private partnerships;
  • Encouraging evolution in cluster activities.

Ensuring quality human capital

  • Updating education and training to meet the requirements of the cluster;
  • Ensuring the availability of talent locally;
  • Ensuring the appeal of the area and a good quality of life.

Facilitating access to financing

  • Encouraging private investment;
  • Facilitating access to public funding;
  • Creating forums to seek financing.

Reducing congestion and social divisions

  • Addressing congestion and social inequalities resulting from the emergence of the cluster;
  • Creating mechanisms to inform the community about the activities of the cluster.

 

EVENTS                                                                               [Table of Contents]

Technopolicy - Shaping Science-Based Clusters: Creating a Joint Regional Agenda

Wageningen, The Netherlands, 24-25 September, 2009
Since the cluster concept was introduced, it has rapidly attracted the attention of governments, consultants, and academics. Many governments and industry organizations across the globe have turned to this concept as clusters enhance the capability for innovative conversion of science and technology into products, services and new businesses growth. Nowadays, clusters of existing and emerging science-based activities have been shown to be crucial factors in shaping the economic winners and losers of the first half of the 21st century. This conference asks: how far have we come in turning this paradigm into practice? What models have been developed so far? What is the role of knowledge institutes and other actors in the field? To what extend can public policy influence the different processes?

Creating the Future Through Science and Innovation: Atlanta Conference on Science and Innovation Policy 2009

Atlanta, 2-3 October, 2009
Science and innovation are aimed at change—new knowledge, new techniques, and fresh approaches to addressing the major challenges facing humanity. The 2009 Atlanta Conference on Science and Innovation policy will focus on ways that science and innovation policies can shape the future by setting goals such as safety, economic security, improved health, and environmental quality and by designing programs to reach these goals.

Learning Clusters: 12th TCI Annual Global Conference

Jyvaskyla, Finland, 12-16 October, 2009
Can clusters be learning organizations? How can learning clusters promote competitiveness for businesses and the regional economy in times of constant change? What are the disciplines of successful and dynamic clusters in the knowledge economy and network society? The 12th TCI Annual Global Conference aims to raise awareness and stimulate discussion of these issues in order to inspire sustainable clustering actions and better futures in clusters, businesses and regions.

Cities and Public Policy Conference

Toronto, 24-25 September, 2009
The Institute of Public Administration of Canada and the Public Policy in Municipalities Project are hosting the CITIES AND PUBLIC POLICY conference. Public sector leaders, experts, policy makers, associations and companies will discuss Canadian cities and the public policies that are shaping their future. Major issues for cities and citizens include: opportunities for stimulus package investments; sustainable development and new urban design; how provincial and federal government balance urban-rural tensions; and multilevel governance and cities.

Creative Spaces + Places: The Collaborative City

Toronto, 28-30 October, 2009
Creative Places + Spaces is one of the world's leading forums on creativity. Under the theme of 'The Collaborative City', this year's event will engage global perspectives on collaboration and connect them with local change makers. Come meet some of the most creative thinkers in Toronto's exploration of the art and science of collaboration.

World Class Clusters: An International Innovation Policy

Sophia Antipolis, Turkey, 5-6 November, 2009
Conference themes explore policy thinking in France, Europe and foreign countries, how to cooperate, the objectives of collaborations for innovation, and presentations from the European Cluster Alliance Project and a European Cluster Observatory roundtable.

The Summit on Transforming Service Jobs

Toronto, 16 November, 2009
Please join Mayor David Miller, City of Toronto and Richard Florida, Director, Martin Prosperity Institute, at a summit to explore the challenges and opportunities for workers in our service economy. Attend this summit to learn more about important trends in our workforce and jobs in the creative age, particularly with respect to service occupations. Hear from leaders in business, academia, and organized labour.  Participate in the discussion on how we can develop a service economy agenda with leading organizations from the Toronto region.

8th Annual Incubator Conference & Award: Best Practices in Science-Based Incubation

Stockholm, Sweden, 19-20 November, 2009
The program committee under chairmanship of Mikael Hult from Innovationsbron, Sweden has constructed an inspiring program: a well-balanced mix of international recognized experts, upcoming talent and unknown jewels in the field of business incubation. This year’s conference will be chaired by Peter Harman from UKBI and will have appearances from amongst others Dinah Adkins, NBIA, USA, Wang Rong, Shanghai Technology Business Incubation Association, China, Richard White, New Zealand Trade and Enterprise,  R.M.P. Jawahar, ISBA, India and Heinz Fiedler, SPICE group, Germany. A special appearance this year will be made by Jan-Eric Sundgren, senior vice president of Volvo. The conference has speakers from four continents and more than 20 countries.

InnoWest 2009

Edmonton, 24-25 November, 2009
Innovation is the main driver of economic growth around the world. In western Canada, innovation has created value added opportunities both in the resource sector and by the creation of new high technology enterprises. Increasing globalization has created opportunities and threats for western Canadian based companies. The financial and economic crisis has created insecurity and restructuring. At the same time, environmental issues are becoming more pressing, and innovations will be needed to solve them. But history shows that major innovations often get their start in times of turmoil. This conference will address a number of questions including how the western Canadian economy looks from a global perspective; how collaboration may create wealth; how to make industries in the area more sustainable; how other jurisdictions are addressing these challenges; and what role the government should play in stimulating innovation and sustainability.

Global Recession: Regional Impacts on Housing, Jobs, Health and Wellbeing: Call for Papers

London, UK, 27 November, 2009
In recent years, issues of health and wellbeing have come to the fore in much public debate and policymaking. These related topics appear across a number of agendas and are significant elements in employment, housing, social inclusion, and social policy fields as well as under their own strategic and delivery areas. Not only do health, health service delivery, deprivation, happiness, incomes and wealth vary across countries and national boundaries, but also there are often strong regional and indeed local and neighbourhood differences. Although there is an established and well developed research landscape in these areas, they are often bound within particular disciplines so that other related interests are unaware of their existence and relevance to their own needs. As the global economy has entered a period of prolonged recession and uncertainty, it is timely to ask questions about the implications for people’s lives and livelihoods. The Regional Studies Association Winter Conference 2009 on Health, Housing, Jobs and Wellbeing presents an opportunity to discuss and debate these issues, to establish the research requirements and to address the concerns of practitioners and policymakers. The conference is keen to attract papers and sessions which address a broad active research and policy agenda, including contributions from any discipline which can offer insights at local and regional levels.

Entrepreneurship and Growth: The Role of Policy Reforms

Washington, DC, 19-20 November, 2009
This conference will address several topics such as the causal effects of institutional, regulatory, and fiscal reforms on entrepreneurial activity; the effects of financial, operational, and management constraints on entrepreneurship and policies that help alleviate these constraints; and the role of entrepreneurship in economic growth and development.

Stimulating Recovery: The Role of Innovation Management

New York, 6-9 December, 2009
Organised by ISPIM and hosted by The Fashion Institute of Technology this symposium will bring together academics, business leaders, consultants and other professionals involved in innovation management. The symposium format will include facilitated themed sessions for academic and practitioner presentations together with interactive workshops and discussion panels. Additionally, the symposium will provide excellent networking opportunities together with a taste of local New York culture.

CALL FOR PAPERS - Innovation, Knowledge and Entrepreneurship: DRUID-DIME Academy Winter Conference

Aalborg, Denmark, 21-23 January, 2010
The conference is open for all PhD students working within the broad field of economics and management of innovation and organizational change. We 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 - new partners are always of interest (we of course encourage DRUID Academy PhD students and students connected to the ETIC PhD program to submit an abstract as well). Do not hesitate to apply even if you have not been in contact with DRUID previously.

>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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