This article was downloaded by: [Temple University Libraries]

On: 04 October 2013, At: 12:59

Publisher: Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered
office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Technology Analysis & Strategic

Management
Publication details, including instructions for authors and
subscription information:
http://www.tandfonline.com/loi/ctas20

Open innovation policy through

intermediaries: the industry incubator
programme in Norway
a b
Tommy Clausen & Einar Rasmussen
a
Nordland Research Institute, Bodø, Norway
b
Bodø Graduate School of Business, Bodø, Norway
Published online: 18 Jan 2011.

To cite this article: Tommy Clausen & Einar Rasmussen (2011) Open innovation policy through
intermediaries: the industry incubator programme in Norway, Technology Analysis & Strategic
Management, 23:1, 75-85, DOI: 10.1080/09537325.2011.537109

To link to this article: http://dx.doi.org/10.1080/09537325.2011.537109

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the
“Content”) contained in the publications on our platform. However, Taylor & Francis,
our agents, and our licensors make no representations or warranties whatsoever as to
the accuracy, completeness, or suitability for any purpose of the Content. Any opinions
and views expressed in this publication are the opinions and views of the authors,
and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content
should not be relied upon and should be independently verified with primary sources
of information. Taylor and Francis shall not be liable for any losses, actions, claims,
proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or
howsoever caused arising directly or indirectly in connection with, in relation to or arising
out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Any
substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,
systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &
Conditions of access and use can be found at http://www.tandfonline.com/page/terms-
and-conditions
 Technology Analysis & Strategic Management
Vol. 23, No. 1, January 2011, 75–85

Open innovation policy through

intermediaries: the industry incubator
programme in Norway
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

Tommy Clausena∗ and Einar Rasmussenb

a Nordland Research Institute, Bodø, Norway; b Bodø Graduate School of Business, Bodø, Norway

In this paper, we discuss whether, and to what extent, open innovation is a relevant perspective
for policymakers seeking to foster innovation and entrepreneurship. Our analysis and discussion
are structured around the authors’ evaluation of a publicly co-sponsored industry incubator
programme that focuses on theoretical ideas from the open innovation model. Based on our
empirical example, we conclude that open innovation policies may be implemented through
a hands-on approach, in which the ultimate goal is to preserve and retain knowledge that has
an economic value to society, but which large corporations choose not to exploit. By acting as
open innovation intermediaries, the publicly supported incubators in our example were able to
transfer knowledge from large firms to society. Most of these activities would not have taken
place without the incubators, suggesting a high degree of additionality.

Keywords: additionality; entrepreneurship; evaluation; incubators; innovation policy; open

innovation

1. Introduction
This paper analyses and discusses whether open innovation is a relevant perspective to analyse
the role of intermediaries in innovation policy and in society. Open innovation has recently been
promoted as a new paradigm for understanding the nature, emergence and diffusion of innova-
tion in industry (Chesbrough 2003). According to Chesbrough who first coined the term, open
innovation is ‘the use of purposive inflows and outflows of knowledge to accelerate internal inno-
vation and expand markets for external use of innovation’ (Chesbrough 2006b, p. 1). The open
innovation model was developed mainly to analyse innovation practices of major US corpora-
tions (Dodgson, Gann and Salter 2006). Therefore, the model has a clear bias toward industry
and management issues. The policy aspects and implications of this innovation model have been
neglected (Chesbrough 2006b). Although this neglect may be expected from an aspiring theory of
innovation (Dodgson, Gann and Salter 2006), it is important to explore the relationship between
open innovation and innovation policy to establish open innovation as a new paradigm for indus-
trial innovation (Chesbrough 2006a). The main aim of this paper is to help develop the policy

∗ Corresponding author. Email: tommy.clausen@nforsk.no

ISSN 0953-7325 print/ISSN 1465-3990 online

© 2011 Taylor & Francis
DOI: 10.1080/09537325.2011.537109
http://www.informaworld.com
 76 T. Clausen and E. Rasmussen

rationale and implications of open innovation policies, including how these differ from ‘closed’
innovation policies. Our aim is theoretical because we want to examine the policy and social
welfare dimensions of the open innovation model (if any).
Our discussion and analysis is structured around the authors’ evaluation of a publicly co-
sponsored industry incubator programme in which theoretical ideas from the open innovation
model are central, but not explicitly expressed. The incubators were established through incumbent
manufacturing companies (henceforth called mother companies) with a goal of commercialising
knowledge in these companies. This commercialisation of knowledge can take three different
forms: (1) employees within the mother companies can spin-off a new firm, (2) incubator man-
agers assist internal innovation projects within the mother companies, and (3) ordinary incubates
(spin-offs or other start-ups) are given access to knowledge and resources within the mother
companies. These three pathways to knowledge commercialisation within established companies
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

shed important light on whether and how innovation policies can stimulate more innovation and
entrepreneurship.
We find that such open innovation policies are characterised by a hands-on approach in which the
incubators take an active role in specific innovation processes. The goal is to ensure that there are
alternative pathways enabling knowledge commercialisation in large corporations that have poten-
tial economic value to society, but which large companies choose not to commercialise. Hence,
these incubators fulfil a role that Chesbrough et al. (2006) described as ‘innovation intermedi-
aries’ that actively match ideas, talent and technology, and which may enable other organisations
to innovate (Winch and Courtney 2007). Such innovation intermediaries may be an important
instrument in public policy (Winch and Courtney 2007), and the societal value of innovation
intermediaries can therefore be far greater than the value they provide for private companies.
Our research adds to the debate on open innovation by helping to develop the policy rationale
behind this newly proposed innovation model. A central element in our discussion is whether, and
to what extent, open innovation policies are different from traditional closed innovation policies
that focus on subsidising innovation and R&D within firms. We also focus on the social welfare
rationale and implications of open innovation policies, as reflected in our case study. In the next
section, we discuss the main differences between the traditional ‘closed’ innovation model of
innovation and the open innovation model. In Section 3, we introduce the industry incubator
programme that serves as the empirical setting for this study and we discuss how this programme
is designed to connect different players and transfer knowledge between them. Section 3 also
examines why public funds may be effectively used to stimulate such processes. In Section 4,
we discuss the term additionality, which is central in assessing the effects of policy initiatives.
The method and data used in this study are presented in Section 5, and we present our findings in
Section 6. Finally, we provide the discussion and conclusions.

2. Models of innovation and their policy implications

Open innovation is the antithesis of a traditional or ‘closed’ model of innovation, in which inter-
nal R&D is the main driver of innovation and value creation for the firm (Chesbrough 2003). In
contrast, open innovation assumes that firms can and should use external ideas, as well as inter-
nal ideas, to advance the pace of industrial innovation (Chesbrough 2006b). Researchers must
address several issues to establish open innovation as a new paradigm for industrial innovation
(Chesbrough 2006a). In this paper, we focus on the relationship between open innovation and
innovation policy. In contrast to the closed innovation model, the policy foundation of the open
innovation paradigm has not been fully developed (Chesbrough, Vanhaverbeke and West 2006).
 Open innovation policy through intermediaries 77

The closed innovation model builds on the premise of ‘market failures’(Arrow 1962; Hall 2002;
Nelson 1959). According to the classical market failure argument, firms will not invest (enough)
in R&D because the benefits of innovative activities cannot be fully reaped owing to incomplete
appropriability and knowledge spillovers between firms (Arrow 1962; Nelson 1959). Theoretical
and empirical literature argue that firms face insufficient incentives to invest in R&D from the
point of view of society (Hall 2002). Thus, the closed innovation model builds on theoretical
literature that provides clear advice to policymakers. In addition, the closed innovation model
highlights that society (not only firms) can benefit from investing in internal R&D. In contrast,
the open innovation model does not offer clear policy advice. It also puts private firms in the centre
of analysis and focuses on how those firms can profit from external technology and knowledge.
Whether and how society can benefit from pursuing open innovation policies has been neglected.
The purpose of this paper is to analyse and discuss whether and how open innovation is a relevant
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

perspective to promote innovation and entrepreneurship. We also aim to analyse what the social
welfare implications of open innovation policies may be (if any). In the next section, we present
our case study, which analyses whether and to what extent policymakers can use open innovation
as a framework for innovation policy.

3. Connect and develop: industry incubators in Norway

Our case is a publicly co-sponsored industry incubator programme that aims to commercialise new
ideas, innovations and spin-off firms from traditional manufacturing firms located in rural regions
and smaller towns in Norway. The industry incubator programme is integrated with industrial
firms operating in traditional industries in 14 rural locations and towns. These industrial firms are
typically major employers in their communities, and no universities or public research activities are
located nearby. These firms are located in areas that have historically offered regional advantages,
such as ship-building, energy-intensive processing, oil and gas, and fisheries. Most firms have
strong engineering divisions and they are the most important knowledge institutions in the region,
although their R&D efforts are relatively limited. Because these firms have employed a high
share of the workforce in their respective regions, these regions have historically had little need
for entrepreneurship. As a result of increasing globalisation, including low-cost competition from
Asia and Eastern Europe, these companies face challenges moving into more ‘upstream’ activities
such as ‘high-tech’ engineering and specialised industrial production that is based on flexibility
and innovation.
The firms are caught in a ‘structural inertia’ trap. On one hand, they need to adapt to more high-
tech specialised production and engineering. This strategy involves cutting employees with large
industrial experience and relevant knowledge who do not fit into the overall corporate strategy.
On the other hand, these companies have little prior history with entrepreneurship and large-
scale organisational change. At the policy level, this ‘structural inertia’ trap has some important
challenges: (1) how to preserve and retain relevant industrial knowledge (embodied in workers
who lose their jobs) within the region; (2) how to transform this relevant industrial knowledge
into new industrial activities; and (3) how to help the mother companies transform themselves.
With the aim of promoting entrepreneurship and industrial development within these firms
and their regions, private–public partnerships in the form of an industry incubator have been
established. The first four of the 14 incubators were established in 2004, and four new incubators
were set up in each of the three following years. The organisation of the industry incubators is
illustrated in Figure 1. The industry incubator is a joint stock company between the Industrial
Development Corporation of Norway (SIVA) (as a minority shareholder) and one or more mother
 78 T. Clausen and E. Rasmussen

Government Mother
programme company/ies
(SIVA)

Ideas from New ventures

mother
company
Industry
incubator Value for mother
company
Ideas from
other sources
Societal value
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

Figure 1. Organising of the industry-incubator programme.

companies as majority owners. Mother companies may, but are not obliged to, locate spin-off
activities in the industry incubators.
The incubator seeks to recruit ideas and entrepreneurs both from within the mother compa-
nies and from other sources. The incubator has three end goals: (1) stimulate innovation and
entrepreneurship in the form of new ventures, either as spin-offs from the mother companies or
as independent start-up firms; (2) stimulate innovation in the mother companies, primarily in the
form of developing internal innovation projects; and (3) stimulate innovation more generally in
society, especially through stimulating innovation and entrepreneurship in the regions where the
industry incubators are located. The two most important aims of the industry incubators are that
they should contribute to innovation within the mother companies and they should contribute to
the development of 10 growth-oriented, new technology-based firms over 5 years. To accomplish
these two aims, the industry incubators identify and help run development projects within the
mother companies, and they admit new firms to the incubator premises. Growth potential of the
new venture is the main criteria for inclusion in the incubator programme.
The industry incubators and their managers pursue a ‘connect and develop’ innovation policy
through which mother companies, spin-offs (and employees with spin-off ideas), and start-up
firms are actively ‘matched’ with each other. For example, some of the start-ups are not spin-
offs from the large manufacturing companies, but they are given access to relevant resources
and knowledge within the mother companies to help advance their competitiveness and market
success. Hence, the incubators in the programme act as ‘innovation intermediaries’ (Chesbrough,
Vanhaverbeke and West 2006) or innovation brokers (Klerkx and Leeuwis 2009) that essentially
match ideas, entrepreneurs, resources and technology to enable innovation in other organisations
(Winch and Courtney 2007). In contrast to ‘neoclassical’ innovation policies, which concentrate
on subsidising internal R&D (because of knowledge spillovers that are seen as negative outcomes
for firms), the open innovation policies with the industry incubators are considered ‘hands-on’.
The goal is to preserve and retain non-commercialised knowledge within large corporations and
to transfer that knowledge to society because it has an economic value to society, although not
necessarily to the corporations.

4. Additionality and open innovation policy

Efficient use of public funds to support innovation and commercialisation of technology in industry
requires that the public resources do not replace the activities that the firms would have financed
 Open innovation policy through intermediaries 79

in absence of the subsidy. Public funds should instead be in addition to what firms would have
spent on innovation without subsidies. Additionality is an important requirement when using
public resources to stimulate technological progress in industry. The concept has traditionally
been defined as the change in industry-financed R&D spending or performance that would not
have occurred without the public programme or subsidy (Buisseret, Cameron and Georghiou
1995). Additionality comes from the classical market failure argument, which argues that firms
will under-invest in innovative activities because the information gained from innovation will
spill over to other firms because of non-appropriability (Arrow 1962; Nelson 1959). Technology
programmes and policymakers can reduce the appropriability problems that prospective R&D-
active firms are facing by subsidising innovative activity. This view of innovation contrasts that
of open innovation. In the open innovation model, innovations do not automatically spill over
to competitors without sufficient costs and effort. In the open model, knowledge spillovers are
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

instead encouraged, relevant external knowledge sources are hard to identify and managing such
knowledge is a key process.

5. Method, data and additionality

To fully understand how the industry incubators contributed to innovation and entrepreneurship,
our study builds on both qualitative and quantitative data. First, we interviewed five incubator
managers, three mother companies and seven start-up firms that were or had been connected to
an industry incubator. Based on these interviews, email surveys were distributed to the CEOs
of all mother companies (N = 22), to the CEOs of all start-up firms in the industry incubators
(N = 101, including development projects within the mother companies), and to the incubator
managers (N = 14). Response rates for CEOs of mother companies, CEOs of start-up firms and
incubator managers were 77%, 47% and 100%, respectively. Our case studies and interviews were
highly valuable because no prior study had attempted to outline how incubators fit within the open
innovation paradigm. We identified additionality of the industry incubator programme by using the
‘counterfactual scenario’ in which respondents were asked to assess ‘what would have happened if
there was no government-sponsored industry incubator programme’. This is a standard procedure
to examine additionality when a relevant control group is hard to identify (Rye 2002).

6. Findings: assessing additionality

The incubators in our study were between 2 and 5 years old. It is still early to assess the output from
the incubators, but the overall figures suggest they are quite successful. In total, the incubators
have vetted 560 business ideas that have resulted in the establishment of 71 new firms. In addition,
they have been involved in assessing 64 ideas within the mother companies that have resulted in 29
firm-internal development projects. The 47 firms and development projects that responded to our
survey reported a total of 405 employees and NOK 255 million in revenue in 2008. These numbers
are relatively high because only one-third of the firms in our sample considered themselves to be in
regular operation or a growth phase, whereas two-thirds are still in the idea or early operation phase.
In our survey, we asked the firms and projects about the role of the incubator in developing
their business. Overall, 10 of 45 respondents claimed that the project or firm would not have
started without the incubator (see Table 1). Most nascent ventures in our sample would not have
been established in the current scale without assistance from the industry incubators. Hence, the
industry incubators have initiated and supported transfer of knowledge and ideas from the mother
companies to society that would not have been possible without the incubators.
 80 T. Clausen and E. Rasmussen

Table 1. Assessment of the role of the industry incubators

Question: What would have happened with your project/firm

if the industry incubator did not exist? Number %

The project/firm would not have been started/ postponed indefinitely 10 22.2
The project/firm would have been accomplished, but in a more limited scale and 3 6.7
at a later time
The project/firm would have been accomplished, but in a more limited scale 15 33.3
The project/firm would have been accomplished by the same scale, but at a later time 10 22.2
The project/firm would have been accomplished by the same scale and time 7 15.6
Total 45 100
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

Some of the mother companies in our sample had internal corporate venture capital programmes
to assist spin-off ventures. Nascent firms in our evaluation did not participate in such corporate
venture capital programmes. Hence, the industry incubators assisted in spinning-off new ventures,
business ideas and knowledge from these mother companies that would not have been spun-off
or transferred to society in absence of the industry incubator programme. A rationale behind open
innovation policies is to preserve, retain and transfer knowledge that has an economic value to
society, but which large corporations choose not to exploit. The empirical data we have collected
(surveys and interviews) suggest that such knowledge transfer does not happen automatically and
that such knowledge transfer processes need to be actively managed.
We sought to investigate the specific contributions of the incubators in more detail. As reported
in Table 2, the same question was asked to both the projects/firms and to the incubator managers to
see whether they had the same views on the incubator’s role. Overall, the incubator was rated to play
a more important role by the incubator managers than by the projects/firms. However, the ranking
of specific contributions were consistent because both reported the contribution to the initiation
of the project/firm as most important, whereas the contribution to technology development was
least important.

Table 2. Role of the incubator assessed by project/start-up and by incubator manager (1–7 Likert scale)

Please assess the role of the incubator for the Project/start-up firms Incubator manager
initiation and further development of your firm/project
(1 = no contribution, 7 = very large contribution) Average SD Average SD

Contributed to the initiation of the project/firm 4.6 2.0 5.4 0.9

Contributed to access critical resources for the 4.6 1.8 5.0 1.3
project/firm
Contributed to increase the development speed of the 4.5 1.7 5.0 1.3
project/firm
Contributed to identify business opportunities for the 4.4 1.9 5.2 0.7
project/firm
Contributed to develop the market aspects of the 3.9 1.7 4.7 1.1
project/firm
Contributed to develop the technological aspects of the 2.9 1.7 3.5 1.1
project/firm
N 45 13
 Open innovation policy through intermediaries 81

The results in Table 2 agree with an open innovation model in which the incubators seemed to
play an important role as innovation intermediaries (Chesbrough, Vanhaverbeke and West 2006)
by initiating processes and accessing resources, whereas their specific contributions to develop the
technological aspects of the idea were more modest. To further assess the specific contributions
from the incubators, we asked the projects/firms to rate their satisfaction with the services. As a
validity check, the mother companies were asked the same questions. From our interviews, we
identified common incubator services. The satisfactions with each are listed in Table 3.
The assessment of incubator services also demonstrated that facilitating networking is an impor-
tant part of the incubators’ role. General roles, such as networking, business development and
follow-up, scored higher than more specific services, such as legal assistance, market development

Table 3. Assessment of the services delivered by the incubator (1–7 Likert scale)
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

Question: How satisfied are you with the services Incubator project/firm Mother company
delivered by the incubator in the following areas
(1 = very unsatisfied, 7 = very satisfied) Average score Average score

Network (e.g. access to researchers, institutes and 5.3 5.4

industry)
Business development (e.g. assistance with business 5.2 5.4
plan, budgeting)
Follow up (e.g. coaching, mentor services, define and 4.9 5.2
reach milestones)
Financing (e.g. contacts to seed- and venture-capital 4.9 4.9
firms, banks, government support schemes)
Equipment and technical assistance (e.g. office space, 4.9 5.0
internet access, technical equipment and advice)
Organisational development (e.g. recruiting, 4.7 5.1
management)
Market development (e.g. customer relations and 4.5 4.5
marketing)
Legal advice (e.g. intellectual property rights assistance) 3.6 4.1
N 17–43 11–17

Table 4. Assessment of the advantages gained from the incubator (1–7 Likert scale)

Question: To what extent has the incubator led to the following advantages
for your project/firm? (1 = totally disagree, 7 = totally agree) Average (1–7)

My project/firm has strengthened its credibility because of the relation to the incubator 5.1
The incubator has helped to developed the business model of my project/firm in a 4.7
positive way
The incubator has provided administrative services of high quality to my project/firm 4.7
The incubator has provided operational advice of high quality to my project/firm 4.7
The incubator constitutes a good development environment for my project/firm 4.4
The incubator has provided access to financing for my project/firm 4.3
The incubator has provided access to management competencies of high quality for my 3.9
project/firm
The incubator has provided access to technical competencies of high quality for my 3.5
project/firm
My project/firm has learned a lot from other incubator projects and firms 2.8
N 45–46
 82 T. Clausen and E. Rasmussen

and organisational development. We also asked the projects/firms to assess the advantages they
gained from the incubator. The average scores are reported in Table 4. Interestingly, the highest
scores were not related to a specific service or resource provided by the incubator, but to a more
symbolic value. Most projects/firms agreed that the incubator had strengthened the credibility of
their venture. This finding underscores the importance of the incubator’s social inputs to its tenant
firms (McAdam et al. 2006).

7. Discussion
Based on an empirical study of an industry incubator programme with public and private funding,
this paper aims to help develop the policy foundation of the open innovation model. The industry
incubators in the programme were actively involved in searching for potential business ideas
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

within large industrial firms, as well as serving as a ‘door-opener’ for external entrepreneurs
seeking access to the resources within these firms. In many cases, the incubators matched ideas
from large industry firms with entrepreneurs and management teams. The firms were in possession
of resources, such as financing, production equipment, market knowledge and legitimacy, that
the nascent incubator ventures were able to access. Hence, most start-ups commercialised the
knowledge and resources contained within the large industrial firms.
Survey evidence suggests that most of the start-up ventures in our sample would not have been
established to the same scale without the industry incubator programme. Incubator managers,
CEOs of start-up firms and CEOs of the mother companies all agreed that the programme had
high additionality regarding entrepreneurship and spin-off activity from the large industry firms.
Even though a minority of the incubator projects were internal development projects within the
industry firms, the incubators and incubator managers provided valuable management expertise
and project leadership. Most of these internal development projects would not have been initiated
without the incubator programme. Because of this, CEOs of the mother companies all deemed
the incubators to have high additionality.
The main economic value for society that we identified in our research was that the industry
incubators helped to preserve, retain and transfer valuable knowledge from large industrial firms
to society. The incubators had an active hands-on approach toward such knowledge transfer pro-
cesses. The incubators and incubator managers connected ideas, entrepreneurs, management teams
and mother companies based on their own knowledge, networks and expertise. They also managed
the process from business idea to (potential) high growth entrepreneurial venture. Our results
clearly suggest that the incubators acted as important innovation intermediaries (Chesbrough,
Vanhaverbeke and West 2006; Winch and Courtney 2007) that facilitated knowledge transfer that
would not have occurred without the incubators and the public programme. Therefore, the social
value of the incubators as innovation intermediaries can be far greater than their value for the
mother companies. This is why it may be effective to use public funds to subsidise the establishment
of such innovation intermediaries.
The interviews with incubator managers and CEOs of the mother companies suggested that
success of the incubator match-making processes were improved when incubator managers had
experience from, and network ties to, industry. This finding suggests that the additionality effects
from pursuing open innovation policies increase when public agents (e.g. incubator managers)
actively facilitate the policy, have experience from industry and actively interact with the supported
firm. Compared with other models of innovation policy (e.g. tax deduction and grants for R&D),
this result implies a hands-on approach, in which policy intervention interacts directly with each
project and firm.
 Open innovation policy through intermediaries 83

The mother companies ranked the incubator contributions more highly in developing networks
to other firms in the region and promoting an innovative culture within their region, rather than in
contributing to specific projects internally in the firm. In several occasions, the incubator played
a key role in developing new ventures that became sub-contractors for the industry firms and
mother companies in the region. These start-ups provided higher-quality services than previously
available and they increased the competitiveness of several firms. The industry incubators served
as regional hubs that provided connections to external resource providers, such as universities and
research institutes, government agencies and policy makers, funding sources and incubators in
other regions. For these small regions, the incubator served as an intermediary facilitating access
to external networks that did not exist locally. The industry incubator concept showcases how
government policy can promote an open innovation approach in industrial firms in low-intensive
R&D regions and it showcases how this approach also benefits other companies and start-ups in
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

the region, as well as the overall regional economy.

A limitation of our study is that the industry incubator programme is specific to Norway and the
industry incubators are connected to mother companies in smaller towns or rural locations. The
practices that we observed may be particular to this setting. Other open innovation policy practices
may be observed from other types of government programmes and public–private partnerships.
Thus, looking at open innovation policies in high technology and urban settings, such as the
commercialisation of university research (Rasmussen 2008), would be an interesting extension
of our study.

8. Conclusion
Our study takes a societal perspective on open innovation, rather than an internal corporate per-
spective. We have identified some distinguishing characteristics of using intermediaries in open
innovation policies. Based on an evaluation of a publicly co-sponsored industry incubator pro-
gramme, we suggest that one central aspect of open innovation policies may be to commercialise
knowledge within corporations that suffer from structural inertia. These corporations may also be
moving toward an exit or be in the process of shutting down. The goal of open innovation policy,
as identified within the context of an industry incubator programme in Norway, is to preserve,
retain and transfer knowledge that has an economic value to society, but which large corporations
choose not to exploit. Our research suggests that economically valuable knowledge within this
context is likely to go unused without public intervention. Innovation intermediaries, such as
publicly supported incubators, can occupy a key role in open innovation policies as they transfer
valuable knowledge and resources to society (e.g. to other firms and entrepreneurs) that otherwise
would not have been transferred. We have also found that the social benefits of such innovation
intermediation activities may be far greater than their private value.
Our findings may also have important implications for the literature on corporate exit strategies
and their impact on society. It is frequently argued that corporate exits are positive because they
untie resources, knowledge and personnel that can be used for new productive means (Aldrich
1999; Schumpeter 1934). Our research suggests that relevant and economically valuable knowl-
edge may be destroyed when large scale industrial firms exit, or are near exiting. Such knowledge
sources do not automatically spill over to other industrial areas. To retain and preserve such knowl-
edge and resources, policymakers must initiate policies and support innovation intermediaries that
can connect and manage the knowledge transfer processes.
Based on an industry incubator programme in Norway and the policy practices identified in this
programme, we found that open innovation policies are characterised by a hands-on approach in
 84 T. Clausen and E. Rasmussen

which different actors are actively connected with each other and knowledge transfer processes
are actively managed by publicly co-sponsored incubators to enable innovation and entrepreneur-
ship. By using an open innovation approach, the publicly supported incubators in our example
transferred knowledge from large firms to society in the form of new start-ups and spin-offs. In
addition, they led and managed innovation projects within large firms. Only a small number of
these activities would have happened in the same capacity without the incubators. Our empirical
example suggests that open innovation policies are associated with high additionality. However,
the additionality effects we identified in the industry incubator programme differ radically from
those prescribed under the closed innovation model. Closed innovation policies focus on the stim-
ulation effects from subsidising internal R&D within firms, whereas open innovation policies, as
identified in our case study, focus on initiating and managing knowledge transfer processes with
an aim of preserving and retaining non-exploited industrial knowledge from large manufacturing
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

companies. More studies should be conducted to pinpoint the characteristics and effects from
open innovation policies because different types of open innovation policies may be associated
with different policy practices and additionality. In this paper, we have taken the first small step
in this direction.

Acknowledgements
The authors would like to thank the Industrial Development Corporation of Norway (SIVA) for supporting this study and
the respondents for sharing their insights with us. The usual disclaimers hold.

Notes on contributors
Tommy Høyvarde Clausen is a Senior Researcher at the Nordland Research Institute and the University of Oslo (both
Norway). He has also been a visiting scholar at the Max Planck Institute of Economics in Jena (Germany) and the Uni-
Merit in Maastricht (the Netherlands). His research interests include evaluation of technology policy, technology based
entrepreneurship and innovation within established firms.

Einar Rasmussen is a Senior Researcher at the Bodø Graduate School of Business, Norway. He has also been working at the
NTNU Entrepreneurship Center and as a visiting scholar at the Nottingham University Business School and the University
of Strathclyde Business School. His main area of research is academic entrepreneurship, in which he has published articles
in journals such as Research Policy, Journal of Management Studies, Technovation, and the International Small Business
Journal.

References
Aldrich, H. 1999. Organizations evolving. Thousand Oaks, CA: Sage.
Arrow, K.J. 1962. Economic welfare and the allocation of resources for invention. In The rate and direction of inventive
activity, ed. R. Nelson, 609–25. Princeton, NJ: Princeton University Press.
Buisseret, T.J., H.M. Cameron, and L. Georghiou. 1995. What difference does it make – additionality in the public support
of R&D in large firms. International Journal of Technology Management 10, nos. 4–6: 587–600.
Chesbrough, H. 2006a. New puzzles and new findings. In Open innovation. Researching a new paradigm, ed. H.
Chesbrough, W. Vanhaverbeke and J. West. Oxford: Oxford University Press.
Chesbrough, H. 2006b. Open innovation: A new paradigm for understanding industrial innovation. In Open innovation.
Researching a new paradigm, ed. H. Chesbrough, W. Vanhaverbeke and J. West. Oxford: Oxford University Press.
Chesbrough, H.W. 2003. Open innovation: The new imperative for creating and profiting from technology. Boston, MA:
Harvard Business School Press.
Chesbrough, H.W., W. Vanhaverbeke, and J. West. 2006. Open innovation: Researching a new paradigm. Oxford: Oxford
University Press.
 Open innovation policy through intermediaries 85

Dodgson, M., D. Gann, and A. Salter. 2006. The role of technology in the shift towards open innovation: the case of
Procter & Gamble. R & D Management 36, no. 3: 333–46.
Hall, B.H. 2002. The financing of research and development. Oxford Review of Economic Policy 18, no. 1: 35–51.
Klerkx, L., and C. Leeuwis. 2009. Establishment and embedding of innovation brokers at different innovation system
levels: Insights from the Dutch agricultural sector. Technological Forecasting and Social Change 76, no. 6: 849–60.
McAdam, M., B. Galbraith, R. McAdam, and P. Humphreys. 2006. Business processes and networks in university
incubators: A review and research agendas. Technology Analysis & Strategic Management 18, no. 5: 451–72.
Nelson, R.R. 1959. The simple economics of basic scientific research. Journal of Political Economy 67: 297–306.
Rasmussen, E. 2008. Government instruments to support the commercialization of university research: Lessons from
Canada. Technovation 28: 506–17.
Rye, M. 2002. Evaluating the impact of public support on commercial research and development projects: Are verbal
reports of additionality reliable? Evaluation 8, no. 2: 227–48.
Schumpeter, J.A. 1934. The theory of economic development. New Brunwick, NJ: Transaction Books.
Winch, G.M., and R. Courtney. 2007. The organization of innovation brokers: An international review. Technology Analysis
Downloaded by [Temple University Libraries] at 12:59 04 October 2013

& Strategic Management 19, no. 6: 747–63.