Innovation Partnerships – Find Your Role in the Innovation Union

By: Irene Martinnsson

The Innovation Union is a strategic approach to innovation, driven at the highest political level, and will focus Europe’s future efforts on challenges like climate change, energy and food security, health and an aging population, using public sector intervention to stimulate the private sector and remove bottlenecks that stop ideas from reaching the market. Despite the focus on simulating the private sector little attention has been given to describe individual firms’ roles in so-called “innovation partnerships”. Irene Martinsson outlines a way forward.

The EU needs a richer framework and more comprehensive understanding of the important stakeholders, and their role, in the new “Innovation Partnerships”. It needs a new conceptual model that describes favorable partnerships that leverage the transformative capacity of services and creates competitive advantage. It should consist of three major parts.

1. Identify and maximize the contributions of the many stakeholders that deliver new services

The European Commission’s new strategic approach to innovation ”the Innovation Union” states that Europe’s competitiveness depends on our ability to drive innovation in products, services, business and social processes as well as business models.

The Commission presents innovation as the best means of successfully tackling major societal challenges such as climate change, energy and resource scarcity, health and ageing. The “Innovation Union” aims to improve conditions and access to finance for research and innovation in Europe, to ensure that innovative ideas can be turned into products and services that create growth and jobs.

To achieve this the European Commission states that so called “Innovation Partnerships” should be launched to accelerate research, development and market deployment of innovations to tackle major societal challenges, pool expertise and resources and boost the competitiveness of EU industry.

Services are the driving force in European economies, accounting for at least 70% of GNP in many countries. However, the potential contribution of service innovation may be hampered if the policy environment is not designed to support the key stakeholders that deliver new services.

I propose that it is services that will catalyze the drive towards market deployment of innovations and boost the competitiveness of EU industry. Both OECD and the Expert Panel on Service Innovation in the EU support the idea that services are transformational as their innovations not only improve the performance of their own sectors, but also significantly improve the innovative potential of other sectors in the economy.

My view is that the issue of identifying the key stakeholders in “Innovation Partnerships” in order to pool expertise and resources has been neglected. There are serious consequences if this neglect continues; efforts to accelerate research, development and market deployment of innovations will suffer if the important stakeholders are not identified and mobilized as a partners to drive innovation.

My suggestion is that a favorable “Innovation Partnership” that leverages the transformative capacity of services should include the following interconnected stakeholders:

• Academic institutions/research institutions, with the role of creating high performance knowledge foundations (content) that will deliver innovation capacity

• Intermediaries with the role of demonstrating and exemplifying innovation capacity

• Companies/ Entrepreneurs with the role of transforming the knowledge oundations into new services/products

• Venture capitalist with the role of investing in the commercial development of good ideas i.e. start-up and growth finance

• European Commission as well as national and local government with the role of improving the public support to the transformative     capacity of services

• User/employees/customers with the role of actively participate in new service development thus highlighting co-production and value and creation.

I suggest that the linkages between the stakeholders described above enable efficient creation, diffusion and reuse of economically useful knowledge. Innovation is complex though so the mere presence of these stakeholders is not enough. It is more important that each of these stakeholders mutually reinforce each other by playing their specific role simultaneously and efficiently, which requires coordination in order to function effectively.

2. Governance structures

If we accept that a broad group of stakeholders needs to be interacting if the Innovation Union is to succeed, and that EU money will be dispensed to these groups, we also need to think about appropriate Governance structures to supervise that process – both the interaction and the funding.

That governance structure needs to be based on a network approach making sure that research is actively connected to companies/entrepreneurs that can transform new knowledge into novel service concepts these partnerships require.

In addition greater attention has to be given to develop governance practices that support innovation across ministerial boundaries and thus redefine innovation policy horizontally in line with a dynamic, market-driven economy.

Finally, governance arrangements should balance the need of technology push and market pull and take a systemic approach in opposition to a linear-approach. The characteristics of the innovation process as a non-linear process require intensive interaction between the key stakeholders.

Framework and instrument suggestions:

• Ensuring framework conditions improve the     coordination, interaction and links between the stakeholders by     mobilizing the actors and fund support activities based on     inter-connectedness between the key stakeholders

• Encouraging policy for innovation with a market pull and a systemic approach in opposition to a linear-approach as research and development ought to be based on market needs in order     to support economic growth and create jobs

• Highlight innovation policy instruments as an     interconnected issue i.e. as a horizontal issue encompassing the movement in policy focus from several stand-alone policies to one catch-all policy that may include a variety of policies such as R&D policy, technology policy, policies aimed at building infrastructure, regional policy and educational policy, as well as     policies stimulating the demand side, for example, through public     procurement science and technology.

My view is that the vision in European Commission’s new strategic approach to innovation may require a system transformation in almost all areas of the economy.

Still, I could not find any research or reports that translate the idea of partnerships onto the key stakeholders in my focus area i.e. service innovation.

Having identified this gap in existing literature the present paper seeks to make a contribution by developing a conceptual framework to illustrate the roles of the key stakeholders that deliver new services. Furthermore, I show that the cooperation between the stakeholders leverages innovative capacity and ensures that good ideas can be turned into products and services that create growth and jobs. Given the right partnerships and the right degree of cooperation I believe that European service production is capable of delivering the envisaged transformation.

3. The need for information initiatives

My view is that the issue of informing private sector stakeholders of the European Commission’s new strategic approach to innovation has so far been somewhat neglected. There are serious consequences if this neglect continues as private sector stakeholders will be unaware of their role in the innovation partnerships. Currently little efforts have been made to circulate information so that private sector stakeholder know what is going on and can be mobilized.

In conclusion I believe it is important to address this issue as I believe that a properly functioning information market is vital if innovative ideas are to be turned into products and services that create growth and jobs throughout Europe.

By Irene Martinsson