Exploring a theoretical framework to structure the public policy implications of open innovation

Open innovation is increasingly popular among practitioners and scholars, but its implications for public policy making have not yet been analysed in detail. This paper explores a theoretical framework to structure the debate about public policy making that facilitates open innovation. We first define open innovation in terms of firms’ open innovation practices and external conditions that encourage enterprises to practice open innovation. We show that policies for open innovation are legitimate as traditional arguments like market and system failures continue to apply. Next, we identify several guidelines for policymaking. Rather than just offering R&D and interaction-oriented policies, we conclude that open innovation warrants attention in a broader range of policy areas, including entrepreneurship, education, science, labour markets and competition. Developing truly horizontal policies is a major challenge to facilitate open innovation in developed economies.