PurposeThis study analyses development of research-related innovation activities in a University of Applied Sciences (UAS) in Finland. Focus on production of innovations in relation to academization challenges the traditions of applied research in UAS, which has always relied on collaboration with local stakeholders.Design/methodology/approachDrawing on the approach of cultural-historical activity theory, the study conceptualizes development of innovation activities as a movement across multiple intertwined developmental lines. The authors ground these conceptualizations in the data, coming from interviews with key researchers in a multidisciplinary research project on smart bioeconomy at a Finnish UAS.FindingsDevelopment of research-related innovation activities in the UAS happened along six lines: development of researcher's expertise, development of project, development of organization, development of research, development of field and development of funding models and policies. The developmental tensions between the lines were essential for promotion of innovation activities.Originality/valueThe study reveals the complex multilayered nature of research-related innovation activities in the specific context of UAS, where it creates challenges and opportunities for developing the traditions of applied research. The results encourage UAS to critically evaluate their changing role as research institutions in regional, national and international innovation systems.