Disentangling innovation in small food firms : The role of external knowledge, support, and collaboration

This paper applies unique survey data on innovation and external interaction of small food producers in Sweden.The overall purpose is to test if firms that are more engaged in external interaction are more innovative. To disentangle innovativeness beyond new goods and services, innovation is measured as new processes, new markets, new suppliers, new ways of organization, and new distributors. Findings point to a positive relationship between firm innovation and external interaction, both in terms of collaboration, external knowledge and support from regional actors. In particular, collaboration regarding transports and sales is shown to enhance most types of innovation. Product and process innovation benefit from external knowledge from extra-regional firms as well as regional support from the largest firm. Findings suggest that current innovation policies can improve their efficiency by increasing their flexibility to enable tailor-made innovation policies at the local level.This paper has been produced within the EU-RURAGRI project “Towards a smart rural Europe” (TASTE), of which the Swedish part is financed by the research council Formas, grant 2013-276.