Open Innovation: Implications for Corporate Strategies, Government Policy and International R&D Spillovers

The paper analyzes the contribution of public policy to the open innovation process. Innovation processes are dynamic and global. Actors must adapt their strategies to new contexts, including the increasingly knowledge-based global competition. They must reconcile the need for speed in commercial exploitation of new products in order to ensure continuous investments with long lead-time in the development of radical innovation capabilities. For the world leaders in their industries, suppliers are becoming ever more important not only as sources but also contributors to innovation, which requires complementary and open interaction between the private sector and public research. The trend is toward open innovation processes, that make possible the overcoming of geographic, institutional and disciplinary barriers. It discusses new approaches to innovation management in the framework of the open innovation paradigm," which include the following: an output-, or result-, orientation regardless of the place of generation and origin of inputs to innovation; the optimization of all aspects of innovation processes; synchronization of company's internal innovation strategies with that of external partners; and knowledge sharing through partnerships. The open innovation model is aimed at seizing benefits from networking by all collaborators, irrespective of their size and activity. The authors provide general recommendations on the policy mix to foster innovation in the commercial sector and the public research. These include strengthening the connection between basic and applied research, promotion of networking and strategic collaborative projects, and special emphasis on supporting small and medium enterprises.