Interactive resource development: implications for innovation policy

Purpose - Previous studies of innovation policy claim that there is a mismatch between the underlying assumptions of these policies and the reality of how firms involved in innovation operate. The purpose of this paper is to deepen the knowledge of actual innovation processes in order to contribute to the modification of innovation policies. Design/methodology/approach - The paper is based on: a literature study focusing on the criticism and suggestions for revision of mainstream policy; and two empirical illustrations of innovation through interactive resource development. The framework is rooted in the industrial marketing and purchasing (IMP) approach to innovation, implying that a potential innovation needs to be embedded in three network settings - the developing, the producing and the using settings. Findings - The study shows that effective policy requires a modified perspective on the basic mechanisms behind innovation. First, the paper emphasises the central role of inter-organisational interaction for the outcome of innovation processes. Second, it shows that the embedding of an innovation in its business context requires the joint efforts of several organisations. Third, implementation of a potential innovation is a time-demanding process. Practical implications - The implementation of a potential innovation requires close connections in relationships and networks. Policy practitioners therefore increasingly need to take these constellations into account. Furthermore, time frames must be extended to take long-term effects into consideration. Originality/value - The framing of innovation as "interactive resource development" reflects the criticism of innovation policy identified in the literature study. The IMP approach applied in the empirical illustrations of these phenomena was useful for providing suggestions for modifications of current innovation policy.