Abstract
ABSTRACT The Open Innovation (OI) concept has pervaded the academic and policy debate due to its potential to further stimulate the circulation of knowledge between business partners and institutions and, consequently, to increase their innovation potential. This paper studies the relationships between OI and innovation and economic returns at the ‘aggregate’ level, i.e. at the country and industry levels. It exploits three waves of the Community Innovation Survey to conduct an empirical analysis on sectoral data for 16 EU countries. Results confirm the role of OI in stimulating – even at the aggregate level – innovation, with returns increasing at diminishing rates. OI also has an indirect impact on value added by strengthening the positive effect exerted on aggregate economic performance by R&D expenditure. The mutual reinforcement of R&D intensity and collaborations between companies and business partners is coherent with the principles underlying ‘smart specialization' policies of the European Union.
Highlights
In following the ‘Open Innovation’ (OI) literature (Chesbrough 2003, 2006; Huggins et al 2010) firms are becoming increasingly open in order to achieve and sustain their innovations: returns of internal R&D are decreasing while the capability of exploiting knowledge originating from external sources means firms capture more opportunities that ‘unlock their potential’
This paper presents findings on the innovative and economic returns of having an open innovative strategy at the aggregate sectoral level for 16 European Union (EU) countries
The analysis supports the presence of positive returns of OI on innovative outcomes, that is, on both overall innovation and, on product and process innovations
Summary
In following the ‘Open Innovation’ (OI) literature (Chesbrough 2003, 2006; Huggins et al 2010) firms are becoming increasingly open in order to achieve and sustain their innovations: returns of internal R&D are decreasing while the capability of exploiting knowledge originating from external sources means firms capture more opportunities that ‘unlock their potential’. As the Reflections of the EU Research, Innovation and Science Policy Experts (RISE) High Level Group points out, a longer-term, strategic vision is required to govern innovation activities in order to address the productivity growth slowdown observed in the EU in recent years and for which the creation of a more open and dynamic innovation environment is crucial (EC 2017). This presents a double challenge that involves both the need to open up to external (including foreign) knowledge sources, and to strengthen absorptive capacity by investing in research and innovation. The final section presents the conclusions and main implications for future research
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