What are the challenges to small regions
innovating in global production networks?
Yves Bourgeois, PhD
Director, Urban and Community Studies Instituite
Directeur, Institut d’études urbaines et communautaires
DCU innovation and entrepreneurship policy lecture series
2016-03-21
1. How we keep busy
UCSI highlights 2012-2016
Launched in 2012, UNB’s Urban and community studies
institute brings a small-city lens to big social issues
• Economic and community development:
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growing tech startups (SSHRC)
renewable energy industries (SSHRC)
emerging digital economy (SSHRC)
digital skills to compete in the 21st century (SSHRC)
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Smart mobility, increase the participation, lessen car burden
• Sustainable transportation in small cities & rural areas
• Urbanization patterns and regional governance
• Immigration retention
• Smart, sustainable, connected communities.
UCSI’s Smart community school – ideas to actions
Our biggest challenge is not coming up with the ideas but the tools to implement them
What
How
When
Community leaders propose
Community leaders
Selected participants attend 4
idea.
work on tools and
Community leaders
from high school to implementation plan Participants learn best practices, weekend workshops during
year: Think (Sep), Plan (Dec),
develop tools and
to help smart
retirement
Equip (Mar), Share (Jun)
community project implementation plan from peers,
Why
Interspaced with mentor
local mentors and global experts
succeed and
Challenges from
feedback.
maximize impact
climate change, austere
Themes
public finances
Smart communities:
Opportunities to share
energy, mobility, services
export brilliant
Sustainable design
initiatives and
Source:
…and as proposed by
technologies.
ieee
applicants
Ideas are abundant;
tools scarce.
Benefits
Who
Assets
individual empowerment, degree credit
SSHRC digital economy, bioeconomy, digital skills
Community sustainability, resilience
UCSI smart city networks: NRC, DAAD
UNB global leadership, faculty engagement, student enrollment
DELG sustainable design, ESIC transpo
Provincial economy, community viability, climate change +
SPRN, BioNB, PiM, AMANB
objectives
2. Some New Brunswick context
2.1 Geography
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2.1 Geography
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Space, low density
Late urbanization
Car-heavy, parking
47% NB live rural;
80% + work urban,
many in 3 cities 100k
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2.2 History
• Atlantic Canada long a staples economy (fish, timber, agriculture)
• French co-existed with First Nations, fought with British; struggles for
rights remain
• Atlantic Canada marginal after Quebec and New England expansion
(Canada marginal after end of 17th c ice age
• Main social cleavage = religion after 19th century Irish migration;
...
language in 20th as Catholics given rights and Irish integrate
• Industrialization / urbanization largely passes by Atlantic Canada:
1850-1900s exodus to New England; 1900-1950s to Central Canada
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2.3 Economy
New Brunswick...
• 1961-1971 Ag, fisheries, forestry... from 20% to 7% of labour force
• Still out migration, but mostly infra-prov, rural to suburbs of 3 cities
• Late industrialization, small mfg base (8%) but heavier LF participation
in service sector (70%), particularly trade (14%), civil service (7%)...
Challenges
• 3/4 of national income
• 10% unemployment (vs 7% nationally), cities Ok but rural up to 25%
• Remote: limited access to global markets, air via Montreal, Toronto
• Rural and minority language businesses access productivity-enhancing
web-technologies less (Bourgeois et al 2016)
• Scale: physical and knowledge infrastructure, labour pool
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2.3 Economy
Crossroads: competing trajectories and visions
• Bilingualism as a cost or opportunity (eg insurance) ?
• Provincial gov banks heavily on uncertain megaprojects (shale gas,
pipeline, hydroelectric dam)
• Large company/ies export oil, lumber. Captured state?
• ...yet we market province as knowledge economy, specifically ICT
(gaming, cybersecurity)
• Very slow to recognize role of tech in sustaining competitiveness in
broader sectors (cleantech, fintech, healthtech, logistics)
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3. Some research on innovation and skills
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3.1 Digital skills, youth integration, SME
productivity
UdeM/UNB/Sherbrooke Digital skills SSHRC PDG (2014-17)
Q: How are digital skills linked to youth employability and SME productivity?
Literatures: skills mismatches, digital divides
Relevance: from occupational to skills mismatches, innovative capacity
2016-17 case studies; OECD PIAAC PSTRE data with NB PETL
H: SMEs have poor capacity to assess DS, provide job-specific training, or couple
with vintage technology
Findings
• Co-existence of $15 and $25/hr jobs in same sector
• Co-existence of "analog" and digital skills within same company
• NB PSec and labour market disjointed; innovators take training in their own
hands
• DS used as worker and youth retention strategy
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3.2 Scaling startups in global production networks
Q: How do we grow (tech) companies and talent in NB?
Canada’s Position in the emerging digital economy (SSHRC 2015-20)
Literature: GPNs and GINs
H: We are getting good at startups, but we may have ceilings beyond
which they cannot grow. …from startups to grownups.
• Anecdote: Yarmouth twins
SubQs: How (M&As?), when (stage?), where (FDI, relocate) do IP
and talent become mobile?
• Do our successful IT in small towns and cities more likely to
relocate as they scale?
• Growth & recycling of talent & investments? (Recapture metrics?)
Methods: Ecosystem mapping 2016 + Interviews 2016-18
Relevance: local embed vs GPNs, Public startup R.o.I.
Findings
• Geog exit strategies, matchmakers indiv > inst
• Gov clueless (?), but entrepreneurs cognizant of recapturing talent
from implosions, tag VC
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3. Integration of IT by resource companies in developing bioenergy
Is there a dichotomy between resource sectors and high technology?
• SSHRC-funding, German government scholarship
• Resource-based companies sourcing ICT to develop new revenue
streams (bioenergy)
• Comparative study of tech cluster growth around regional large-scale
adoption of renewable energy: Austria, France, Nederlands, California
• Great potential in rural areas – local sourcing, more value from resource,
job-intensive, retention, GHG targets, opportunity to develop tech
• Using resource no guarantee of VA (NB vs NED)
• Policy / Supply gap (NBIF) vs Demand (AcFor)
• If we keep pursuing the same policies and directions, we will get
same results, and probably worse. Moving target; losing ground.
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3.3 Bioenergy innovation ecosystems
Q: What role have local ICT providers played in the dynamic evolution
of bioenergy clusters?
Austria, Germany, Netherlands, France
Relevance
• Demand-driven innovation, GHG tragets, green jobs, LT growth
Initial findings
• Policy / Supply gap (NBIF) vs Demand (AcFor)
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4. Conclusion
Exemplar on NB innovation policy pickle
Hydroelectric dam vs biomass
• $5b 700MW hydroelectric dam refurbishment
• ...or 350 2MW CHP biomass facilities in 100+ communities ?
• $0.11kw vs 0.14 ...Energy utility not giv econ dev mandate
• But LT technology costs?
• Renewable biomass abundant, local, value. ...increased local
revenue could potentially cover $ 0.03 shortfall
• More cleantech companies than dam building
• Policy capacity limit energy options being debated, and
consequently opportunities for spinoffs and tech exports
• Ex. Gussing using local feedstock, (local revenue), exporting
50% electricity production to metro markets, exporting
biomass tech, working on nextgen fuel cells
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Six (6) policy questions
...with respect to innovation and small geographies
1. How do GPNs fit in city-network theories (Camagni et al 2015) ?
Can small city-regions even capture and affect global trade flows?
2. How do you overcome scale to achieve higher VA in GVCs?
Access ...talent? ...equity fin? ...distrib networks? ...policy capacity?
3. Can you run econ dev as digital breadbaskets to larger cities?
Is being a feeder / farm system a viable biz model for a small region?
4. Does it matter how region is connected to larger urban networks?
Different policies if loose urban networks or tight hierarchy?
5. How important are anchor firms, including FDI ?
Does having an anchor firm facilitate spin offs or undermine resilience?
Manna or potatoes?
6. How important is alignment with traditional sectors?
When are traditional strengths velcro (ex cleantech, fintech, healthtech,
logistics) and when are they a drag?
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