Keli Araujo-Rocha (p), Josep-Maria Arauzo-Carod

Gil Avnimelech

This paper investigates the determinants of high-technology and non-high-technology firm location choices in Catalonia, Spain, emphasizing the role of spatial spillovers and industry-specific dynamics. The analysis examines firm entries across high-tech manufacturing, knowledge-intensive services, and non-high-tech sectors by employing spatial econometric models and count data techniques in Catalan municipalities between 2010 and 2019. Results highlight the importance of population density, income levels, and proximity to urban hubs for high-tech sectors as main determinants of location decisions, while non-high-tech firms exhibit a preference for less urbanized regions. Spatial spillovers of income and labor market conditions significantly influence high-tech firm entries, underscoring the interconnected nature of regional economies. The findings reveal sector-specific location patterns and contribute to the literature on industrial location, offering practical recommendations for enhancing Catalonia’s role as a hub for technological innovation and economic growth and providing actionable insights for policymakers.

Gil Avnimelech (p), Assaf Amit

Ramojus Reimeris

This paper examines the transformative role of open innovation (OI) in entrepreneurial ecosystems, highlighting its capacity to shift innovation dynamics from creative destruction to creative construction. While Schumpeterian creative destruction displaces incumbents through disruptive startups, creative construction fosters collaboration, enabling startups and incumbents to co-create value. Open innovation serves as a key mechanism in this shift, facilitating intentional knowledge flows, resource sharing, and partnerships that enhance ecosystem-wide innovation.

We first position open innovation within the broader theoretical framework of entrepreneurial ecosystems, emphasizing its role in enhancing knowledge spillovers and absorptive capacity. Traditionally, knowledge spillovers occur sporadically, but OI structures them into systematic knowledge exchange mechanisms. Through collaborative activities such as joint ventures, R&D partnerships, and licensing agreements, firms can better internalize external knowledge, boosting their innovation potential. Additionally, OI strengthens absorptive capacity by improving firms' ability to recognize, assimilate, and apply external knowledge, particularly through repeated engagements.

At the ecosystem level, we argue that OI functions as an infrastructure facilitating both vertical and horizontal knowledge spillovers. Vertical spillovers occur within industries, while horizontal spillovers extend across sectors, fostering diverse knowledge exchange. This infrastructure includes coworking spaces, accelerators, and innovation hubs that serve as collaboration centers, alongside institutional frameworks and networks that sustain knowledge flows. By lowering collaboration costs and risks, OI democratizes access to innovation resources, enabling smaller firms to benefit from systemic spillovers.

Open innovation also plays a central role in fostering creative construction. Startups contribute disruptive insights, while incumbents provide resources, legitimacy, and complementary assets, creating a synergistic dynamic. This collaboration mitigates innovation risks and enhances R&D returns, driving greater investment and participation. While ecosystems characterized by creative construction still experience disruption, the relationship between startups and incumbents evolves. Instead of purely displacing incumbents, startups often collaborate with them, enabling incumbents to adopt and scale disruptive innovations while startups gain access to critical resources and markets. This interplay accelerates technological progress and market transformation, enriching the entrepreneurial ecosystem.

Finally, we explore policy implications. Traditional R&D-focused policies often overlook OI’s systemic benefits. We propose a shift toward supporting ecosystem-wide OI infrastructures, including shared research facilities, public-private partnerships, and collaborative innovation platforms. Positioning these initiatives as explicit OI support programs strengthens their theoretical foundation and highlights new opportunities to address market and systemic failures.

Ramojus Reimeris (p)

Raphael Bar-El

European Union (EU) is committed to making the twin green and digital transition a success towards a more sustainable and just economy. The priorities of the new European Commission are focused on building a sustainable and competitive Europe by strengthening the internal market, promoting decarbonisation and competitiveness, fostering innovation, increasing security and reducing dependencies.
In May 2022, JRC and Committee of the Regions (CoR) launched a pilot initiative known as Partnerships for Regional Innovation (PRI) with 74 European territories participating on a voluntary basis. Completion of the PRI Pilot initiative in May 2023 highlighted the growing political focus on transformative innovation policies as a driving force for socio-technical system transformation. The lessons learnt from the PRI Pilot initiative led to the co-creation of a practical policy guide “Innovation for Place-Based Transformations. ACTIONbook, practices and tools”. The next step was creation of a learning and experimentation arena, under the EU Preparatory Action (PA) mechanism.
This PA “Innovation for Place-based Transformation” is dedicated to empowering territories – including cities, regions and Member States in the EU, Candidate Countries and Horizon Europe Associated countries – to support policy practitioners in building capacities, designing and implementing transformative approaches. It promotes partnerships in networks or multi-stakeholder settings to address urgent challenges by tackling them with a place-based approach.
With the help of experts, 7 Experimentation Journeys (EJ) will be implemented, each focusing on a different challenge and involving 4-6 selected territories, based on application. The goal is to stimulate transformative innovation policy action and create a shared space for policy learning. PA challenge areas: achieving circularity; climate adaptation; improving healthcare; increasing global food security; mastering the digital transformation; new European Bauhaus; reducing reliance on fossil fuels.
The PA EJ are designed to generate new evidence for transformative innovation policy practice of common European interest. They will facilitate the creation of a shared space for policy learning where participants can advance on their transformative objectives with the help of peers and experts, collectively working on tangible policy-relevant outputs.
With conclusion of the Expression of Interest, we received close to 250 applications with almost 50 of them being for experimentation activities. Together with applicants, we will engage into the creation of EJ, first batch to be launched in Q3 of 2025, continuing with the rest in Q4. At the end of the summer, we will already have all EJ either launched, or almost ready for a launch.

Raphael Bar-El (p), Liran Maymoni

Georgios Fotopoulos

Low-income countries face a persistent challenge: innovation activities tend to concentrate in more developed regions. Existing research offers limited solutions, often emphasizing local advantages or frugal innovation to mitigate widening regional gaps. This study challenges the conventional approach of competing with developed nations for innovative activities and instead explores an "integrative" strategy that recognizes innovation as a multifaceted process encompassing diverse activities.
We build on Capello and Lenzi (2013), who adopted Schumpeter’s distinction between innovation and commercialization, and Bar-El (2023), who identified distinct drivers of knowledge creation and practical implementation. We analyze the dependence of these two innovation types in high-income and low-income countries using regression analysis based on the 2024 Global Innovation Index (GII). Additionally, K-means clustering identifies three primary groups within both income categories.
Our findings first highlight a malfunctioning ecosystem for knowledge creation in low-income countries: policies supporting knowledge creation are relatively inefficient compared to those fostering knowledge implementation. Second, knowledge creation in these countries is predominantly driven by global corporations, resulting in a dual-economy model with limited local economic impact. Third, in low-income as well as in high-income countries, knowledge implementation does not necessarily rely on domestic knowledge creation; instead, these two innovation types function independently. In low-income countries, knowledge implementation is primarily influenced by the availability of skilled labor, high-quality logistics, and the effective adaptation of imported knowledge.
Based on key influencing factors, we classify low-income countries into three clusters: (1) those with significant knowledge implementation and some degree of knowledge creation, (2) those with knowledge creation (mainly by corporations) and less knowledge implementation, and (3) those with minimal activity in both innovation types—comprising the majority of low-income nations.
This analysis yields critical policy implications. Innovation policies in low-income countries should prioritize knowledge implementation by facilitating technology adoption, improving logistics, and enhancing workforce skills. Depending on economic and social structures, this approach can strengthen technological advancements in traditional industries, agriculture, and small to medium enterprises. While knowledge creation should not be neglected, it should align with national economic objectives rather than serve as a standalone goal.

Georgios Fotopoulos (p), Nikolaos Filippopoulos (p)

Keli Araujo-Rocha

Regional innovation is a key driver of economic development, with differences in innovation capabilities contributing to the divergence between leading and lagging regions. This study investigates the mechanisms driving two distinct modes of innovation: the science, technology, and innovation (STI) mode, which relies on formal research and development (R&D), and the doing, using, and interacting (DUI) mode, which emerges from practical, experience-based knowledge, and interactive collaboration. While previous research has explored these modes, limited attention has been given to their temporal evolution and how the mechanisms supporting each mode change over time, particularly in economically lagging regions.
Using fuzzy-set Qualitative Comparative Analysis (fsQCA), we examine a comprehensive sample of European regions, distinguishing between economically and innovation-developed regions and their lagging counterparts. QCA is well-suited for identifying causal configurations, but its atemporal nature poses challenges when analyzing evolving processes. To address this limitation, our study incorporates a temporal dimension, enabling us to observe the dynamic evolution of Regional Innovation Systems (RIS) and identify shifts in the mechanisms underlying both STI and DUI modes over time. This temporal perspective offers new insights into how regions adapt their innovation strategies.
By comparing the temporal trajectories of STI and DUI modes across regional contexts, our study contributes to the broader discussion on the role of alternative innovation pathways in fostering regional development. These insights are particularly relevant for regional innovation policy, as they highlight the importance of supporting both formal R&D activities and experiential learning processes, depending on the context. By recognizing and leveraging diverse innovation mechanisms, policymakers can design more effective interventions that help especially lagging regions close the development gap and enhance their long-term innovation performance.