Open Innovation as a tool for economic competitiveness for businesses in the agrifood sector

The challenges of the agrifood sector in the European Union

The European Food industry is the largest manufacturing sector of the EU (14.9% of total turnover and 12.9% of added value) as well as its largest employer with 4.2 million people being directly employed. It has a diverse product range with bakery, meat and meat products, dairy products and drinks being the top four sectors. This sector is also critical to meeting the societal challenges of sustainable farming, food security, food safety and healthy nutrition, now and in the future. These are important priorities for the European Commission and for the member States and Regions.

Today the agrifood sector faces three major challenges:

· Winning back the consumer: there is a severance of the mutual trust between consumers and producers. The sector needs to become consumer centric to regain this trust,

· Meeting consumers’ dietary needs and food preferences related to lifestyle and life stage, empowering them to lead healthier and more active lives and

· Future-proofing farming and food production and distribution: about one third of the food produced is currently lost or wasted; the way we produce foods today will be less and less competitive and sustainable in the future. These pressures will increasingly place a strain on agricultural supply and encourage investments in innovations that can help increase yield and reduce input and environmental costs[1].

Agricultural science and technology, known as ‘agritech’ can help offer a solution to the above challenges. However, major barriers to innovation appear to exist for SMEs in the agrifood sector with the primary of them being: a) Lack of business skills: There are major deficiencies right across the range of business skills that are necessary for successful innovation, b) Difficulties in accessing scientific knowledge: It is also clear that the lack of scientific expertise in this sector inhibits its ability to innovate and c) Need for enhanced training and development units at a local level, equipped with a range of mediators that will guide SMEs through the innovation process. Economic restraints as well as the large number of micro SMEs within the food sector may prevent the delivery of the aforementioned solutions.

Open innovation as a tool for economic competitiveness

Open Innovation (OI) is broadly defined as the shift from a traditional closed and controlled R&D and innovation environment towards open and flexible models[2]. A number of research projects have so far been funded by financing instruments such as H2020, that prove the need for the adoption of OI by European SMEs or the need for academic research to enter the market. OI, defined as “the use of purposive inflows and outflows of knowledge to accelerate internal innovation and to expand the markets for external use of innovation”[3] .

OI can reduce costs, accelerate time to market, open up new markets and create new revenue streams for the company. Unfortunately, knowledge is missing regarding how companies, especially SMEs, can successfully make use of OI.

University — Industry collaboration

University generated knowledge can be seen as a form of inbound organizational innovation that enables SMEs to improve their innovation activities[4] . Participation in large R&D networks and strong engagement in academic ecosystems help SMEs (and especially science-based companies) to gain visibility and reputation, foster expertise exchange, and gather new knowledge and information on research and development (R&D) priority setting. Collaboration with universities and Research Centres is a very strong driver for “academic” companies. It helps SMEs to overcome the main barriers to entering into science-based industries (e.g. reaching the scale benefits of large R&D investments, sharing the risk of scientific knowledge revealing and basic research exploitation)[5] .

Europe enjoys an excellent standing in pioneering research but this reputation for excellence does not always carry through from research to commercialization. The antagonists to technology transfer range from funding issues and intellectual patent nightmares to a cultural aversion to risk-taking. The open science literature has focused on ways to increase the openness of research data at universities, while links with industry in the context of OI have received less attention.

European universities and other research institutions are realizing their changing role in the globalized economy.

In order to remain attractive, they need to open up to business and international collaboration, which may also help leverage new funds Sharing knowledge in particular through R&D collaborations with business — while a potential source of income for research institutions — may well give an important boost to both quantity and quality of the research undertaken. In today’s rapidly changing innovation eco-systems identifying, qualifying and negotiating OI partnerships in a timely manner has proved problematic for SME’s.

Collaboration obstacles and benefits

Universities and research centres, generally have problems in creating links to industry for the purposes of commercializing the technologies they conceive and at the same time, are often unaware of the available technologies that universities and research centres around the world make available for licensing opportunities. At the same time, most SMEs often do not have the time, capacity or funds to partner with universities or research and technology organisations (RTOs). In addition, they are usually not aware of what’s possible or what’s on offer, so they don’t think it would be worth the effort of trying.

The value of OI however lies in the principle of co-creation and the driving of structural changes far beyond the scope of what any organization or person could do alone. For this transformation to take place, universities, RTOs, industry and other stakeholders involved in the innovation process need not only to be encouraged to open up and collaborate, but also to be given practical guidance of how to interface effectively in OI programmes for the benefit of the actors and the society as a whole9 . Co-creation is also becoming more important due to OI and the intense collaboration between various actors. Universities can play a unique role in this regard.

The growing world population, the changing climate, the reducing biodiversity and geopolitical and social tensions put pressure on the availability of agro resources and their safe transformation in food for all. Hence, food and nutritional security and sustainable food systems are key topics for the coming decennia. All creativity, knowledge, entrepreneurial spirit and sustainable innovation pathways should be mobilised to guarantee availability and access to food for the coming generations. But financial considerations as well as the large number of micro SMEs in the sector will prevent the aforementioned from being delivered in person. Consequently, solutions which effectively utilise ICT will be key in the frame of supporting the innovation endeavours of agrifood SMEs.

[1] Satellite Applications Catapult “Agricultural Technology — Market Review” Marullo, Andrea Piccaluga, Elena Casprini, Maral Mahdad, Andrea Paraboschi (2016)

[2] Chesbrough 2003, Chesbrough and Crowther, 2006; Gassman and Enkel, 2004; Enkel et al. 2009.

[3] Chesbrough H. (2006), “Open Innovation: A New Paradigm for Understanding Industrial Innovation”, in Chesbrough et al., 2006, Open Innovation: Researching a New Paradigm, Oxford: Oxford University Press, pp 1–12.

[4] Farrukh, C., Athanassopoulou, N., & Ilevbare, I. How inbound open innovation helps SMEs learn and improve: knowledge transfer from university to industry through direct coaching. https://doi.org/10.17863/CAM.35688

[5] Alberto Di Minin, Chiara Eleonora De Marco, Cristina Marullo, Andrea Piccaluga, Elena Casprini, Maral Mahdad, Andrea Paraboschi (2016). JRC Science for policy report, Case studies on open innovation in ICT

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