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Changes in innovation processes call for new policies

Industrial Innovation in Transition project provides new ways to understand how companies manage and organize innovation processes in practice.

Innovation is a continuously changing process and innovation policy instruments must be adapted to reflect the changing patterns of industrial innovation, according to a European Commission funded Horizon 2020 project led by Aalto University in 2015–2107. The project Industrial Innovation in Transition (IIT) examined nearly 700 companies, across five industry sectors, in eleven countries and found that innovation processes have changed during the last five years.

‘Innovation processes increasingly take place in ecosystems and policy mechanisms need to be modernized to meet the demands of today’s innovation activities’, explains IIT Director, Professor of Practice Erkki Ormala, the School of Business. ‘Customers continue to be the most important partners, but an interesting finding of our study is that public research institutions are second most important’.

In the ecosystem environment, innovation is dependent on the companies’ ability to find and collaborate with the key ecosystem partners. It also requires that companies have enough competence to agree upon the rules of the game in such a way that every partner in the ecosystem can benefit from the collaboration.

‘The innovation ecosystem poses important policy challenges. Policy must ensure that the innovation environment can provide all the required elements such as identification of the ecosystem integrator, financing institution and regulatory authority‘, says Ormala. ‘If these issues are not considered, the competitiveness of industry may decline and, hence, the economic growth and employment in Europe would suffer.’

Best practices and open data available for wider use

The IIT project provides new ways to understand how companies manage and organize innovation processes in practice. An online Innovation Best Practices Report has been published to share insights gained during the study.

‘The need for companies to innovate has never been more important. Practical tools to improve flexibility and to speed-up the innovation process include new independent business units for innovation, innovation boards, as well as customer involvement right from the beginning of the innovation process’, says Ormala.

In addition, the project has also created an open database where the coded interview data is freely available. The open data enables other countries as well as scientists to replicate the study and compare innovation performance with the European experience. The European Commission organized an internal workshop to understand how to improve the European innovation landscape based on the IIT project findings.

‘Our 694 interviews were complemented by 10 case studies and 400 survey responses. From this perspective, the IIT study is the largest and most comprehensive study of these issues conducted in Europe and provides valuable insight regarding the key challenges in both industry and public policy’, notes Ormala.

More information:
Professor Erkki Ormala, School of Business
[email protected]
tel. +358 40 749 279

IIT Industrial Innovation in Transition (iit-project.eu/

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