Combinatorial innovation modes in SMEs: mechanisms integrating STI processes into DUI mode learning and the role of regional innovation policy

Innovation processes comprise interactive learning mechanisms by combining different knowledge sources. Using a set of 80 exploratory interviews with small and medium-sized enterprises (SMEs) and regional innovation consultants, this paper analyzes the mechanisms through which firms combine an STI (science-technology - innovation) and DUI (learning-by-doing, -using and -interacting) mode of innovation. We show that the innovation mode concept ought to be applied as a continuum of combinations. Thus, SMEs integrate STI-based knowledge into DUI-routines through mechanisms with varying levels of complexity. The described mechanisms differ with respect to their effects on innovativeness, the required absorptive capacities, and costs incurred. Depending on the level of integration, cognitive, organizational and financial barriers impede a combination of innovation modes. At this point, regional innovation consultants can affect a successful combination. We derive implications for innovation policy regarding absorptive capacities in SMEs, showing that policy support extends beyond financial services.