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R$ Conference Halifax 11/2007 Niosi1 Towards competitive clusters in the Maritimes Jorge Niosi Canada Research Chair on the management of technology Université

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Presentation on theme: "R$ Conference Halifax 11/2007 Niosi1 Towards competitive clusters in the Maritimes Jorge Niosi Canada Research Chair on the management of technology Université"— Presentation transcript:

1 R$ Conference Halifax 11/2007 Niosi1 Towards competitive clusters in the Maritimes Jorge Niosi Canada Research Chair on the management of technology Université du Québec à Montréal

2 R$ Conference Halifax 11/2007 Niosi2 This presentation The Atlantic and Canadian clusters How to build competitive clusters: attracting and creating human capital Knowledge production: University research, public and non-profit laboratories Attracting or nurturing private users of knowledge: innovative firms and spin-offs Knowledge localization: technology parks Regional advisory bodies: City committee for STI Picking sectors and locations How to do it?

3 R$ Conference Halifax 11/2007 Niosi3 Canadian and provincial STI policy Canada has developed an array of STI policies nurturing the development of many new industries (aerospace, ICT, biotechnology, and others): tax credits for R&D, R&D subsidies for SMEs, university research councils, Technology Partnerships... But, in spite of these policies being national, those new industries agglomerate in a few large metropolitan areas. These Canadian regions are privileged by immigration, population and provincial policy

4 R$ Conference Halifax 11/2007 Niosi4 The present situation in Canada Canada is one of the most cost-effective countries to conduct R&D, coast to coast Yet, most innovation is concentrated in the nine largest metropolitan areas: the 9 largest CMAs represent 50% of the countrys population, but 77% of industrial R&D expenditures, and 72% of scientist and engineers working in industrial R&D Two methods are used to measure innovation: industrial R&D and patents Both indicators point towards the dominance of Toronto, Montreal, Ottawa and Vancouver.

5 R$ Conference Halifax 11/2007 Niosi5 The present situation in Canada Also, regions are not converging: increasing differences in income and productivity, as well as population and R&D efforts are evident. Between 1988 and 1999, Ontarios productivity increased by 1.2%, by 0.4% in Quebec, 0.3% in Western Canada, and 0.2% in Atlantic Canada (according to Statistics Canada, 2006) The four provinces of Atlantic Canada had in 2001 several thousand dollars in income below the Canadian average.

6 R$ Conference Halifax 11/2007 Niosi6 Population in Canadian CMAs

7 R$ Conference Halifax 11/2007 Niosi7 Industrial R&D in 2002 R&D activity in Canada is geographically concentrated

8 R$ Conference Halifax 11/2007 Niosi8 BERD is concentrating outside the Maritimes 1994200319942003 $ M % of GDP ON4,1127,0661.321.43 QC2,0564,1151.211.62 BC5911,0750.590.74 AB5097790.580.46 MN-SK1722090.340.28 Atlantic1251470.270.20 Canada7,56413,3500.991.10

9 R$ Conference Halifax 11/2007 Niosi9 Industrial R&D in 2002 R&D activity in Canada is also industrially concentrated

10 R$ Conference Halifax 11/2007 Niosi10 Large CMAs host many sectors: Toronto

11 R$ Conference Halifax 11/2007 Niosi11 …and Montreal

12 R$ Conference Halifax 11/2007 Niosi12 Smaller CMAs host few sectors: Quebec

13 R$ Conference Halifax 11/2007 Niosi13 …and Calgary

14 R$ Conference Halifax 11/2007 Niosi14 Patents are granted to the largest CMAs

15 R$ Conference Halifax 11/2007 Niosi15 Population in Atlantic CMAs Census Metropolitan Area2006 Population Halifax, NS372,679 St Johns, Newfoundland181,113 Moncton, NB126,424 Saint John, NB122,389

16 R$ Conference Halifax 11/2007 Niosi16 US patents invented in Halifax (2002-4) Patent holderNb Dalhousie University4 Individual inventors4 Foreign companies subcontracting local skills7 Canadian companies based in ROC2 Canadian companies based in Halifax9 Canadian companies based in NS, not Halifax1 Other (Defence Canada, U. of Pittsburgh)2 Total29

17 R$ Conference Halifax 11/2007 Niosi17 Private patent holders of Halifax Immunovaccine Technologies, a Dalhousie University spin-off (1) Neocon International: plastic prods. (1) Darmos Toys (4) Algoplus Consulting: aviation safety software (1) Blue Sky Entertainment (1) Ocean Nutrition: neutraceuticals (1)

18 R$ Conference Halifax 11/2007 Niosi18 What to do: Increase skills and knowledge production Investing in university research to create local spin-off firms And attracting public, private and non profit laboratories Also luring human capital from abroad and ROC Putting mechanisms in place to incorporate new human capital in the labour pool.

19 R$ Conference Halifax 11/2007 Niosi19 Increasing human capital supply and demand Supply (public sector)Demand (private sector) University fellowshipsTax credits for R&D Grant loans for studentsR&D subsidies Selective immigrationPublic laboratories Academic salariesExpatriate R&D labs Tax exemptions for foreign researchers University-Industry corporations

20 R$ Conference Halifax 11/2007 Niosi20 Higher education R&D expenditures by province

21 R$ Conference Halifax 11/2007 Niosi21 Attracting industrial R&D Four factors are key in the decision to locate corporate R&D: - Output market potential - Intellectual property protection - Quality of R&D personnel (Route 128, Silicon Valley, N. Carolina Research Triangle…) - University collaboration with industry (new science, expertise of academic faculty, ease of collaboration) (Thursby and Thursby, 2006)

22 R$ Conference Halifax 11/2007 Niosi22 The role of anchor tenants In all high-tech industries, some organizations play the role of anchor tenants or attractors. - In biotechnology and nanotechnology, universities play that role: they conduct key research and create the labour pool, and spin-off new companies - In ICT and aerospace, large companies play that role I.e.: Canadair (now Bombardier) in Montreal aerospace, Nortel in Ottawa telecom cluster, and IBM Canada in Torontos software agglomeration. They contribute to the labour pool and spin-off companies.

23 R$ Conference Halifax 11/2007 Niosi23 BERD by province

24 R$ Conference Halifax 11/2007 Niosi24 Picking locations Larger cities are the places where the action is, in Canada, the US and the European Union. Also, the vast majority of landed immigrants go to the larger cities (Toronto, Montreal and Vancouver). A new set of incentives is required to attract more skilled immigrants to the larger Atlantic metropolitan areas (I.e. faster recognition of academic degrees, faster entry in the labour market, acquisition of complementary skills).

25 R$ Conference Halifax 11/2007 Niosi25 Picking locations The best bets for the Atlantic Provinces are its CMAs (population as of 2006): Halifax (Nova Scotia) (372,000) (Canadas 13th) St John (Newfoundland) (181,000)(Canadas 20th) Moncton (New Brunswick )(126,000)(Canadas 27th) Rationale: larger cities create more externalities than small ones, thus usually attract more immigrants and knowledge circulate faster than in small cities Rationale: universities are located in CMAs, spin-offs from universities, and attracted R&D labs, will locate in them because skilled people tend to settle in CMAs

26 R$ Conference Halifax 11/2007 Niosi26 Virtuous circles of growth in larger CMAs

27 R$ Conference Halifax 11/2007 Niosi27 Vicious circles of stagnation in skilled labour

28 R$ Conference Halifax 11/2007 Niosi28 Policy opportunity Increase the production of college and university graduates in the Atlantic provinces through grants, scholarships, increased academic personnel, more research. Increase the attraction of skilled immigrants (faster recognition of degrees, faster admission by professional organizations, better upgrading programs in local universities). Then attract anchor tenants

29 R$ Conference Halifax 11/2007 Niosi29 Conclusion Human capital is unanimously considered the main factor behind economic development Thanks to the oil boom, Atlantic Canada has the means required to attract skilled labour and high technology industry and enter into a virtuous circle of sustained growth. The main policy opportunity is in the area of the creation and attraction of human capital, a precondition to lure R&D-intensive firms.

30 R$ Conference Halifax 11/2007 Niosi30 Conclusion For this purpose, two main and one minor set of policy measures appear adequate: - Increase the production of university research and graduates in science and technology intensive areas. Nurture spin-offs and lure venture capital - Increase the attraction of skilled immigrants from rest of Canada and abroad by facilitating their insertion in the labour market - Pick sectors: R&D in oil, gas and related activities; high-tech services (I.e. software). But be alert to other sectors growing spontaneously

31 R$ Conference Halifax 11/2007 Niosi31 Bibliography Niosi, J. (2000): Canadas national system of innovation, Montreal & Kingston, McGill-Queens University Press. Niosi, J. (2005): Canadas regional systems of innovation, Montreal & Kingston, McGill-Queens University Press. Niosi, J. and M. Bourassa (2007): Canadas inventive cities, a presentation to the Annual Statistical Conference of Statistics Canada, Ottawa, May. Thursby, J. and M. Thursby (2006): Here or there? A survey of factors in multinational R&D location. Report to the Government- Industry-University Research Roundtable, Washington, National Academies Press.

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