The Geography of Innovation:What have we learned so far?

Meric S. GertlerUniversity of Toronto

Presented to the AIM Conference on ‘Social Science and Innovation’, 11 February 2009, Royal Society of Arts, London

The Geography of Innovation

• Recent evidence: – innovation-generating activity highly clustered in a

relatively small number of places– Esp. evident in more knowledge-intensive

industries– Becoming more pronounced over time, not less– Examples: life sciences, financial services

• Question: what forces responsible?

ISRN Canada: Core Questions

• To what extent – and in what ways – do local extra-firm relationships and interaction enable firms to become more innovative and successful?

• Relative importance/role of local vs non-local (national, continental, global) knowledge flows in spurring development of local clusters?

Case Studies• ICT/photonics/wireless (Vancouver, Calgary,

Waterloo, Ottawa, Quebec City, Moncton)• Life science (Montreal, Toronto, Vancouver,

London, Saskatoon, Halifax)• Mechanical engineering Aerospace (Montreal);

Steel, Auto parts (Southern Ontario)• Digital media (Toronto, Montreal, Vancouver)• Food & wine Specialty foods (Toronto); Wine

(Niagara, Okanagan)• Resource industries Wood products (BC); Mining

(Sudbury)

Leading innovators

• ICT/wireless Research in Motion (BlackBerry)• Life science QLT (Visudyne)• Mechanical engineering CAE, Bombardier,

Magna• Digital media Soft Image, Alias, EA, IBM• Food & wine Vincor• Resources Inco

1. Markets and Competition

• Literature:– Importance of strong local market (‘sophisticated

and demanding customers’) and strong local competition

• Our findings:– Neither is universally true– In many cases, the most important customers are

continental or global, not local (ICT, bio, aero, auto)– Nor are local competitors more important than non-

local competition (often less important)

2. Knowledge-producing organizations

• Literature:– Stresses key role of local universities, PROs,

private research labs; local flows of knowledge between economic actors

• Our findings:– Non-local sources, flows complement local ones– ‘buzz/pipeline’ geographies: local learning

dynamics important, but most productive when economic actors, organizations are linked to other non-local nodes of knowledge-generating activity

3. Role of local universities• Literature:– IP from local research-intensive universities drives

cluster formation, development

• Our findings:– (with a few notable exceptions) universities play

more of a supporting role than a leading one– (even in case of exceptions) role considerably more

complex, multidimensional than first thought – Beyond tech transfer, ‘commercialization’, spin-outs– Highly educated grads, co-op, consulting (2-way)

4. Role of business leaders• Literature:– Emphasizes role of business leaders, lead firms in

stimulating emergence of successful clusters

• Our findings:– Support this, but also point to importance of strongly

aligned social networks at city-region scale– New institutions of civic governance

– broadly based, multi-stakeholder organizations– identify problems, align interests, resources, support for

strategies

– Size matters, but in surprising ways (mid-size advantages)

Implications for innovation policy• ‘Payoff’ from universities: have realistic

expectations, objectives– Not standalone, self-sufficient generators of

knowledge for local industry (more like portals to globally extensive networks)

– Equally important to develop ‘absorptive capacity’ of local firms

– Need for independent intermediaries to broker industry-university relationships

Implications for innovation policy

• Well-educated labour force: – Single most important attractor to employers in

knowledge-intensive, creative industries– Transcends individual clusters

• Importance of quality of place in attracting and retaining well-educated workers– Urban policy, sustainability closely

complementary to ‘innovation’ policy

Thank you

• meric.gertler@utoronto.ca• www.utoronto.ca/isrn