A taxonomy of competition-based
approaches as innovation policy measures
to foster external knowledge search
Paolo Landoni, Simone Franzò, Davide Viglialoro, Alessandro Laspia and Roberto Verganti
Purpose –This paper aims to provide a comprehensive view of the different competition-based
approaches that policymakers can exploit to foster external knowledge search and their positioning
among innovation policy measures. A growing number of companies haveimplemented initiatives to
access external knowledge to increase their innovativeness, consistently with the open innovation
paradigm. Competition-based approaches have received increasing attention by the private sector
as a way to access external knowledge. However, despite their potential role as innovation policy
measures, a limited attention has been devoted so far to investigate them from the policymakers’
Design/methodology/approach –To this aim, a two-stage empirical analysis has been carried out to
develop a taxonomy of competition-based approaches. The first stage leveraged a multiple case study
methodology including a sample of 20 competition-based approaches, while the second one leveraged
interviews with Italian and European key informants.
Findings –This paper proposes a novel taxonomy including eight competition-based approaches,
which differ among each other in terms of policy strategy, scope breadth and output required. Moreover,
this paper enriches a well-established taxonomy of innovation policy instruments with the identified
Originality/value –This study contributes to the current debate on innovation policy by providing a
taxonomy that includes eight competition-based approaches that can be exploited by policymakers to
foster external knowledge search as well as their positioning among the innovation policy instruments.
The taxonomy will hopefully support policymakers in identifying of the most suitable instruments in the
light of their policy strategy and objectives.
Keywords Competition-based approach, External knowledge search, Open innovation,
Innovation policy, Policymakers
Paper type Research paper
Innovation reflects a firm’s ability to access, understand and exploit knowledge (Zahra and
George, 2002;Tseng et al., 2011). Accordingly, the capability to search and recombine existing
knowledge components in novel ways to generate innovations is becoming highly important for
companies (Lanzolla et al., 2021), as it enables them to expand the knowledge basis upon which
they innovate, thus affecting their innovativeness (Stuart and Podolny, 1996;Mele et al., 2022).
To enhance their innovativeness, companies can leverage externally generated
knowledge as well as the internally generated one (Ritala and Stefan, 2021). Indeed, a
growing number of companies have already implemented initiatives to access external
knowledge (Pollok et al., 2019), consistently with the open innovation paradigm
(Chesbrough, 2006;Laursen and Salter, 2006). Open innovation refers to “a distributed
innovation process that involves purposively managed knowledge flows across the
authors can be found at the
end of this article.)
Received 30 October 2022
Revised 31 December 2022
12 February 2023
Accepted 17 March 2023
©Paolo Landoni, Simone
`, Davide Viglialoro,
Alessandro Laspia and Roberto
Verganti. Published by Emerald
Publishing Limited. This article
is published under the Creative
Commons Attribution (CC BY
4.0) licence. Anyone may
reproduce, distribute, translate
and create derivative works of
this article (for both commercial
purposes), subject to full
attribution to the original
publication and authors. The
full terms of this licence may be
seen at http://creativecom-
PAGE 136 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023, pp. 136-156, Emerald Publishing Limited, ISSN 1367-3270 DOI 10.1108/JKM-10-2022-0854
organisational boundary” (Chesbrough and Bogers, 2014, p. 4). In this domain,
knowledge assumes a pivotal role as a key resource to establish and sustain the
competitive advantage of firms by nurturing their innovation processes (Grant, 1996;
Matricano et al., 2019). Nevertheless, there are only few attempts within the extant
literature pointing out how to properly manage knowledge in an open innovation context
(Natalicchio et al., 2017).
Competition-based approaches have received increasing attention by innovation
management scholars and practitioners as a way for companies to advance research and
technology as well as acquire externally generated knowledge to address unsolved
innovation issues (Adamczyk et al.,2012;Murray et al., 2012;Letina and Schmutzler, 2019).
These approaches are intended as open calls in which different actors such as firms or
individuals compete to develop a solution to solve an innovation problem (West and
Lakhani, 2008). Among them, a specific attention has been devoted to innovation contests
(Terwiesch and Xu, 2008;Jeppesen and Lakhani, 2010;Boudreau et al.,2011;Adamczyk
;Ferradas et al., 2017), that is, “competition of innovators who use their skills,
experience and creativity to provide a solution for a particular contest challenge defined by
an organizer” (Bullinger et al.,2010, p. 291).
At public level, competition-based approaches have been recognised as valuable policy
instruments to support innovation (Kay, 2012;Williams, 2012;Burstein and Murray, 2016;
Liotard and Revest, 2018). Indeed, extant literature on innovation policies –that is, those
having a relevant impact on innovation (Edler and Fagerberg, 2017)–has pointed out the
role of competition-based approaches in fostering innovation as well as increasing public
and sectoral awareness on specific issues affecting the society (Kay, 2011), the latter being
particularly relevant in the light of COVID-19 crisis (Patrucco et al., 2022). For instance, a
few contributions have investigated the role of inducement prizes as a competition-based
approach through which policymakers can accelerate the identification of new solutions to
tackle technological or societal issues (e.g. health crises and natural disasters) (Schroeder,
2004;Kay, 2011;Liotard and Revest, 2018), thus impacting on the society as a whole
(Adamczyk et al.,2012;Murray et al.,2012). Nevertheless, a limited attention has been
devoted so far to the competition-based approaches that policymakers can exploit to
stimulate innovation by fostering external knowledge search. In particular, to the best
knowledge of the authors, there is a lack of contributions providing a comprehensive view of
the different competition-based approaches that can be exploited by policymakers as well
as their peculiarities with respect to those exploited by the private sector. Moreover, a
proper contextualisation of such approaches within the broader domain of innovation policy
instruments is lacking too (Kay, 2011). Therefore, the paper aims to answer the following
RQ1. Which competition-based approaches can be exploited by policymakers as
innovation policy instruments to stimulate innovation by fostering external knowledge
To address this research question, the present study leverages a multi-stage empirical
analysis that involved a set of 23 cases of competition-based approaches as well as a set of
relevant Italian and European key informants.
The present study contributes to the existing literature by proposing a taxonomy that includes
eight competition-based approaches that are suitable for policymakers to stimulate innovation
by fostering external knowledge search. In particular, only four competition-based approaches
included in the proposed taxonomy have been already addressed within the extant literature.
Moreover, the study contextualises such approaches among the innovation policy instruments
by enriching a well-established taxonomy of such instruments. Therefore, policymakers could
benefit from the study to identify the most suitable instruments to foster innovation via external
knowledge search, consistently with their innovation policy strategies and objectives.
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 137
The remainder of the paper is organised as follows. Section 2 illustrates the relevant literature
on the topic as well as the existing gaps, also presenting the research question of the study.
Then, the research methodology is presented in Section 3. Finally, results are presented and
discussed in Section 4, while Section 5 discusses the implications of the study as well as its
limitations and avenues for future research.
2. Literature review
2.1 Competition-based approaches exploited by policymakers
Competition-based approaches refer to open calls in which different actors such as firms or
individuals compete to develop a solution to a specific innovation problem (Terwiesch and
Xu, 2008;Jeppesen and Lakhani, 2010;Boudreau et al., 2011). Such approaches have
received an increasing attention by scholars and practitioners as instruments to support
companies in the private sector in leveraging external knowledge search (West and
Lakhani, 2008;Adamczyk et al.,2012;Letina and Schmutzler, 2019). Accordingly, they
have spread in this sector, primarily in the form of innovation contests (Jeppesen and
Lakhani, 2010). Within these contests, actors involved (known as solvers) submit ideas,
proposals or prototypes to address a specific innovation challenge shared by a firm that
promotes the contest itself (known as seeker). At the end of the process, the seeker selects
and awards the best submission (Terwiesch and Xu, 2008;Jeppesen and Lakhani, 2010).
Innovation contests have proven to be very effective in stimulating innovation (Ferradas
et al., 2017;Liotard and Revest, 2018), because of their ability to attract unknown solutions
from different sectors and knowledge domains (Boudreau et al.,2011). As a matter of fact,
Jeppesen and Lakhani (2010) show that approximately one third of the unsolved technical
problems within the R&D departments of large firms have been solved through innovation
contests. Accordingly, innovation intermediaries have spread over the past decade to
support their customers in searching for external knowledge by exploiting competition-
based approaches (Howells, 2006;Terwiesch and Xu, 2008;Jeppesen and Lakhani, 2010;
Randhawa et al.,2017). Among them, online innovation intermediaries, such as Wazoku or
NineSigma, make competition-based approaches such as innovation contests available as-
a-service (Huston and Sakkab, 2006;Lichtenthaler and Ernst, 2008b;Chesbrough, 2009;
Lichtenthaler, 2013;Lauritzen, 2017;Randhawa et al.,2018;Schenk et al.,2019;Vignieri,
2020). Furthermore, recent contributions show how innovation contests may be effective in
supporting external knowledge search by small and medium enterprises (SMEs) (Leckel
et al., 2020), through an ad hoc design that address the idiosyncratic characteristics of
such companies (Franzo
`et al.,2023). In this vein, extant literature points out a set of design
elements to be addressed when designing an innovation contest, such as the above-
mentioned solvers, seekers and expected output (Bullinger et al.,2010;Adamczyk et al.,
2012; Rodriguez Ferradas et al., 2017). For instance, Doppio et al. (2020) identify a set of 14
design elements for innovation contests, which are summarised in Table 1.
More recently, competition-based approaches have gained an increasing attention by
policymakers, which can exploit them to achieve technological leaps, address major
societal challenges, develop generic technologies and increase public and sectoral
awareness on specific issues affecting the society (Masters and Delbecq, 2008;Herstad
andez-Esquinas and Ramos-Vielba, 2011;Kay, 2011;Adamczyk et al.,
2012;Kokshagina et al.,2017). Liotard and Revest (2018) argue that competition-based
approaches launched by public institutions (known as inducement prizes) may display a
strong incentive effect ex ante and during the contest, produce favourable spillovers after
the contest at innovation and economic levels in specific sectors and play a beneficial
societal role. In addition, these approaches are considered very useful when problems to
be solved are complex or novel, as well as when creativity is fundamental (Boudreau and
Lakhani, 2013). For these reasons, policymakers can tackle complex issues that need to be
PAGE 138 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023
solved through innovative solutions by exploiting competition-based approaches (Mergel
and Desouza, 2013).
Among the competition-based approaches that can be exploited by policymakers,
inducement prizes are “designed and organised as competitions with rules to achieve pre-
specified technological challenges or targets before a deadline” (Kay, 2011, p. 361). These
prizes have supported the development of advanced technical solutions for a long time. For
instance, Letina and Schmutzler (2019) report the case of the EU Vaccine Prize, that is, the
first inducement prize promoted by the European Commission to improve the knowledge
about the cold-chain vaccine technology. The increasing attention devoted to these prizes
relies on the fact that they drive innovations over and above the level that would have
occurred without them. Furthermore, similarly to competition-based approaches in the
private sector, they motivate unconventional players to tackle a specific technological issue
because of the monetary reward offered as well as the non-monetary incentives such as
publicity and networking (Brunt et al.,2008;Kay, 2011).
However, despite the relevance of competition-based approaches to stimulate innovation
by policymakers, there is a lack of studies characterising the peculiarities of competition-
based approaches suitable for policymakers with respect to those exploited by the private
sector, as well as positioning them among innovation policy instruments (Kay, 2011).
Therefore, additional studies that may inform the development of innovation policies based
on competition-based approaches to stimulate innovation are necessary (Jugend et al.,
2.2 Competition-based approaches and the other innovation policy instruments
Innovation policy refers to “public intervention to support the generation and diffusion of
innovation, whereby an innovation is a new product, service, process or business model
that is to be put to use, commercially or non-commercially” (Edler et al.,2016, p. 3). Thus,
innovation policy –which have been recently addressed within the literature by using the
term “public support for innovation” (Jugend et al., 2020)–embraces the production of
knowledge, artefacts and practices that are needed to generate innovations as well as to
favour the subsequent adoption. The three main reasons that can justify the involvement of
public actors within this process refer to:
1. overcoming market failure, that is, a suboptimal level of knowledge and innovation
generation because related benefits can be appropriated not only by the knowledge
generator but also by other actors, thus acting as a disincentive to generate knowledge
Table 1 Design elements of an innovation contest
Design elements Definition
Goal The overall strategic reason why the contest is organised
Seekers Organisation seeking innovation
Challenge The problem or opportunity that the Seeker wishes to tackle regarding a product, process, technology or business
Solvers Individuals or organisations executing the Activities
Activities Actions capable of delivering Solutions by means of problem-solving work, specific methodologies and know-how
Timeline The duration,milestones, stages and events required to set up and carry out the entire contest
IPR Intellectual Property Rights (IPR) policy for Solutions
Regulations The formal and legal framework regulating all aspects of the contest
Incentives The motivational elements for Solvers and/or Seekers, including prizes
Business model Costs and revenues generated by the contest
Solutions Overall outcomes that the contest achieves and its foreseen impacts
Governance How the contest is managed and governed
Source: Adapted from Doppio et al. (2020)
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 139
2. overcoming system failure, that is, a failure in the cooperation among the different
actors involved in the generation of knowledge and innovation (Klein Woolthuis et al.,
3. contributing to address societal challenges, that is, to steer innovation initiatives to
satisfy citizenry needs (e.g. defence and health) and favour the creation of societally
preferable markets (Mazzucato, 2011).
Extant literature has identified different policy instruments to foster innovation, such as tax
incentives for R&D investments (Billings et al., 2001), policies aimed at fostering
collaborations and technology transfer from research centres (Van Looy et al.,2011),
incentives for the mobility of researchers (Baruffaldi and Landoni, 2012) and voucher
schemes (Caragliu et al.,2022). A common classification of such instruments is based on
their orientation, that is, distinguishing between supply-side and demand-side instruments
(Rothwell and Zegveld, 1981;Edler and Georghiou, 2007;Edler and Fagerberg, 2017).
Supply-side instruments are “instruments providing additional inputs for private innovation
process” (Aschhoff and Sofka, 2009; p. 1236), such as R&D funding or tax credit. Such
instruments include financial ones and service ones. The former refers to financial resources
given to firms to stimulate their innovation activities, which can take the form of R&D grants,
fiscal measures, support for training and mobility, support for public sector research and
equity support. The latter refers to measures that address the environment in which firms
exert their innovation effort, which can take the form of networking measures or information
and brokering support (Edler and Georghiou, 2007). Demand-side instruments include “all
public measures to induce innovations and/or speed up diffusion of innovations through
increasing the demand for innovations, defining new functional requirement for products
and services or better articulating demand” (Edler and Georghiou, 2007, p. 952). Such
instruments can take the form of systemic policies, regulations, public procurement and
tools to support demand.
Furthermore, other contributions classify innovation policy measures based on their goals
(Edler et al., 2016). For example, supply-side instruments may support the creation of new
knowledge and innovation through financial support to R&D and innovation activities,
support the development of capabilities and skills required to innovate or support various
forms of interaction and learning (Edler and Fagerberg, 2017). Figure 1 shows a well-known
taxonomy of innovation policy instruments proposed by Edler and Georghiou (2007).
Figure 1 Taxonomy of innovation policy instruments
PAGE 140 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023
Despite the presence of taxonomies of innovation policy instruments within the extant
literature (Edler and Georghiou, 2007;Borr
as and Edquist, 2013;Go
¨ket al., 2016;Edler
et al., 2016;Edler and Fagerberg, 2017), to the best knowledge of the authors, existing
taxonomies do not include all the different competition-based approaches among the
available innovation policy instruments. For instance, within the taxonomy proposed by
Edler and Georghiou (2007), only three competition-based approaches are included, that
is, Grants for industrial R&D, Information and brokerage support and public procurement
(Rolfstam, 2009). This could hinder the policymakers’ ability to select the most effective
policy instruments (such as competition-based approaches) to foster innovation, according
to the peculiarities characterising each of them (Jugend et al.,2020). Hence, to fill the
above-mentioned literature gaps and shed light on the role of competition-based
approaches as innovation policy instruments, the paper aims to answer the following
RQ2. Which competition-based approaches can be exploited by policymakers as
innovation policy instruments to stimulate innovation by fostering external
3. Research methodology
The research process included two stages. The first stage aimed at identifying a preliminary
set of variables to characterise the different policy-driven competition-based approaches.
In this stage, the case study methodology was deemed appropriate, as case studies are a
useful method for building a rich understanding of complex and contemporary phenomena
and identifying the relevant variables that should be considered (Eisenhardt, 1989;
Eisenhardt and Graebner, 2007). In particular, to develop a taxonomy of competition-based
approaches that policymakers can exploit to foster innovation, we built a sample including
both policy-driven cases and for-profit ones, given the rather limited diffusion of the policy-driven
cases. Regarding for-profit ones, we focused our analysis on innovation intermediaries that
leverage competition-based approaches to support innovation, as they represent an
increasingly relevant enabler for companies to streamline innovation by exploiting competition-
based approaches (Jeppesen and Lakhani, 2010;Colombo et al., 2013). The overall sample
was built according to theoretical replication logic, that is, “the logic of treating a series of cases
as a series of experiments with each case serving to confirm or disconfirm the hypotheses”
(Eisenhardt, 1989, p. 542). Following this logic, we selected examples of innovation policy
instruments that fit with the taxonomy proposed by Edler and Georghiou (2007) and are
consistent with the definition of competition-based approach proposed by West and Lakhani
(2008). In this way, cases that overlap with already existing innovation policy instruments
improved confidence in the validity of the extant taxonomy. On the contrary, other cases allowed
us to extend this taxonomy by identifying new innovation policy instruments. A preliminary list of
potentially relevant cases was built by leveraging two different sources of information: scientific
literature search, which illustrates relevant examples of intermediaries that leverage competition-
based approaches to support innovation (Chesbrough, 2006;Lichtenthaler and Ernst, 2008a,
2008b;Boudreau and Lakhani, 2009); and web search, by using keywords such as
“competition-based intermediaries”, “prizes”, “prize intermediaries”, “innovation marketplaces”,
“open innovation platforms” and “crowd-sourcing”. The preliminary list included 46 potentially
relevant cases. Then, the final sample was obtained by selecting the most relevant cases, that
is, those for which the variables that characterise the competition-based approaches were easily
observable (Eisenhardt, 1989), while excluding those referred to collaborative communities
rather than to competition-based approaches, consistently with the aim of the research. The final
list consisted of 23 cases, summarised in Table 2.
As far as data collection is concerned, we collected data related to each selected case
from different sources, such as company websites, prize-participant blogs, scientific
literature and publicly available documents. Both external validity (i.e. authenticity) and
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 141
Table 2 Cases examined
No. Name Nature Website Brief description
1#EuvsVirus Policy-driven www.euvsvirus.org European Commission’s
hackathon and innovation
platform for solutions to fight
2Crowdspring For-profit www.crowdspring.com Commercial platform for
organisations’ design contests
3DesignCrowd For-profit www.designcrowd.com Commercial platform for
organisations’ design contests
4Digital Learning Challenge (XPrize) Policy-driven www.xprize.org/challenge/
Not-for-profit Open Innovation
competition to test the efficacy
of educational interventions
5Eupartnersearch Policy-driven www.eupartnersearch.
Platform to foster the
exchange of ideas and
partnership among European
entities as well as the
development of new practice
for training and education
6Homegrown Innovation Challenge Policy-driven homegrownchallenge.ca Foundation-sponsored
challenge to allow farmers to
sustainably and competitively
grow berries out of season in
7Horizon prize for better use of
European Commission’s prize
for developing a rapid test to
identify respiratory tract
8Hydropower Operations Optimisation
prize to help clean energy
transition by improving the
grid’s reliability and resiliency
9Longitude Prize on Dementia Policy-driven dementia.longitudeprize.
Not-for-profit challenge for
technological solutions to help
people affected by dementia
10 L-Prize Policy-driven www.energy.gov/eere/ssl/
technology competition to
innovate common light bulb
11 Ninesigma For-profit www.ninesigma.com Commercial service designing
prize challenges for
companies’ Open Innovation
12 Open Innovation Call in Copenhagen
targeting Air Quality and Urban Heat
Call for ideas aims to reduce
the negative impacts of urban
air pollution and the heat
island effect in Copenhagen
13 Open Innovation platform Policy-driven www.openinnovation.
Platform created by Lombardy
region (Italy) to strengthen
governance capacity and to
improve the competitiveness
of the regional system of
14 Perovskite Start-up Prize Policy-driven www.herox.com/
US Government’s prize to
accelerate the growth of the
domestic perovskite industry
PAGE 142 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023
internal reliability (i.e. credibility and biases) were checked (Danto, 2008). To identify the set
of variables characterising the different competition-based approaches, we leveraged the
set of design elements for innovation contests proposed by Doppio et al. (2020) as a
reference framework for data collection (Table 1).
Data was then analysed by adopting a structured coding process. First, all cases was
separately analysed by two authors of the paper. The few different interpretations from two
researchers were crosschecked by another researcher. Second, a cross-case analysis was
performed to compare data from policy-driven cases with those from for-profit initiatives.
The analysis of such data enabled us to identify a preliminary set of variables to
characterise the different policy-driven competition-based approaches.
The second stage enabled to identify the most appropriate variables to characterise the
policy-driven competition-based approaches (among those that emerged in the first stage),
to develop a taxonomy of such approaches. To this aim, we engaged relevant Italian key
informants in the Lombardy region. Lombardy has been chosen as empirical setting, being
one of the most advanced and innovative regions in Europe, also accounting for more than
20% of the Italian gross domestic product . In particular, interviews were conducted with
public policy and legal experts working in the regional administration or government and in
other regional agencies. Furthermore, to further strengthen the analysis, we also involved
venture capitalists and entrepreneurs that are active in the Lombardy region, to gain an
No. Name Nature Website Brief description
15 ProcuraþAwards Policy-driven procuraplus.org/awards/ Award to highlight
sustainable, circular and
innovation procurements by
innovative public authorities
16 Prometheus Policy-driven hei-prometheus.eu/
start-up competition for digital
17 Qmarkets For-profit www.qmarkets.net/ Private platform helping firms
to improve intrapreneurship
and open innovation initiatives
18 The Big Hack Policy-driven 2022.thebighack.
Not-for-profit hackathon to
develop prototypes for
hardware and software
19 The Sunny Awards Policy-driven www.herox.com/
US Government’s award for
community solar projects that
increase equitable access to
20 Wazoku For-profit www.wazoku.com Commercial service designing
prize challenges for
companies’ Open Innovation
21 XPrize Carbon Removal Policy-driven www.xprize.org/prizes/
challenge to create and
demonstrate solutions for
22 Yet2.com For-profit www.yet2.com Commercial service creating
Open Innovation platforms for
23 Zillion Designs For-profit www.zilliondesigns.com Commercial platform for
organisations’ design contests
Source: Authors’ elaboration
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 143
understanding of the point of view of the potential users of such public policy instruments.
Overall, we performed more than 20 semi-structured interviews, each one lasted at least
one hour and was taped and transcribed. During the interviews, the variables identified in
the first stage of the research were discussed and refined until a taxonomy emerged, which
includes a set of competition-based approaches that policymakers may adopt to foster
innovation. The results of the analysis were presented for validation to all the actors
previously interviewed. Finally, we developed a small survey on the variables included
within the taxonomy to be delivered to European public policy experts, to further strengthen
the findings as well as to conduct a preliminary test of the applicability of the taxonomy in
other contexts. We submitted the questionnaire via email to a sample of 105 European
public policy experts and received 22 complete answers, thus obtaining a 21% response
rate. Information on the public policy experts that answered to the survey is reported in
4. Results and discussion
4.1 Cross-case analysis
The cross-case analysis of competition-based approaches has been carried out with the
support of interviewed key informants. Such analysis brought into light some recurring
differences among the analysed cases. It is worth mentioning that such differences are not
affected by the nature of the case studies analysed (i.e. policy-driven and for-profit). In
particular, the cross-case analysis did not bring into light specific patterns characterising
policy-driven and for-profit competition-based approaches. On the contrary, it revealed
some common patterns among all the cases analysed, which led the identification of the
three variables to cluster the different competition-based approaches. The three identified
variables are reported in Figure 2 and further described in the following sub-sections.
4.1.1 Scope breadth. The scope breadth variable refers to how broad or narrow the
information in the brief is, ranging from “broad brief” to “precise brief”. Indeed, some of the
Table 3 Information on the survey respondents
Survey respondent Nationality Role Type of institution
1 Slovenian Head of Department Public foundation
2 Latvian Head of Department Government agency
3 Greek Head of Department Public research centre
4 Finnish Head of Department Public foundation
5 Finnish Senior Advisor Government agency
6 Latvian Head of Department Public research centre
7 Hungarian Vice Director Public research centre
8 Icelandic Professor Public university
9 Danish Head of Department Government agency
10 Cypriot Head of Department Public foundation
11 Belgian Director Government agency
12 German Director Public foundation
13 Latvian Director Government agency
14 Slovenian Head of Department Government agency
15 Latvian Head of Department Government agency
16 Hungarian Vice President Government agency
17 Slovakian President Government agency
18 Belgian Head of Department Public foundation
19 Polish Vice Director Government agency
20 Romanian Professor Public university
21 English Head of Department Government agency
22 Belgian Director Government agency
Source: Authors’ elaboration
PAGE 144 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023
analysed competition-based approaches focus on tackling specific problems (i.e. a precise
brief). For instance, Ninesigma supports its clients by offering “A structured service to find
technology solutions, partners or experts to address a short-term, pressing technology
gap”. In contrast, other competition-based approaches focus on tackling broader
innovation problems in which the solvers are free to work on the issues that they consider
more interesting and valuable (i.e. a broad brief). For instance, Yet2.com has created a type
of electronic showcase to enable every firm or person in the world to show and advertise
new and interesting technologies: “yet2.com’s TechPak listings enable companies to
showcase their technology to the global community”.
The cross-case analysis and the subsequent interviews with key informants showed that this
variable is useful for helping policymakers customise their instruments for different targets
and innovation purposes. Indeed, the choice of the scope breadth characterising the
instrument does affect the degrees of freedom that participants can enjoy by joining the
competition, as well as the possibility for the proponent to obtain valuable outputs. As
stated by one regional government official: “When we think about a new set of regional
grants, we always face some trade-offs. We need to decide how broad the call will be. A
very broad brief will enable the participants to ideate and maybe propose very innovative
solutions/approaches. On the contrary, a very precise brief will focus the effort of the
participants toward the specific solutions we need”.
4.1.2 Output required. The output required variable refers to the type of output required by
the solver, which ranges from “proposal” to “solution”. In some of the competition-based
approaches analysed, participants (solvers) are asked to develop working solutions that
address a specific need of a seeker. Once the seeker has selected the best solution, the
process ends. For instance, Wazoku (former Innocentive) enables “Solvers to submit
solutions to the challenge. The Seeker pays an award to the solver who best meets the solution
requirements as outlined in the challenge”. In other competition-based approaches, participants
are asked to develop a proposal describing how they could address the innovation needs of the
seeker. For instance, Ninesigma requires the participants in its competition-based approaches
to deliver a Request for Proposal. As stated on the corporate website: “Request for Proposal
(RFP) includes an outline of a proposed project in terms of timing, investment, and evaluation
criteria. If NineSigma’s client is interested in your proposal, you will negotiate the full scope of
work, budget, duration, and other details directly with the client”.
From the policymaker’s perspective, the importance of the choice between proposal and
solution lies in the effort required to solvers to deliver the requested output, which can
hinder the participation of solvers that are endowed with limited resources. As a regional
government official stated, “We could ask for working solutions. However, many potential
participants, mainly SMEs, could lack the resources to enter this kind of project. On the
contrary, we could ask for proposals and fund the execution of the project as described in
Figure 2 Framework drivers
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 145
the proposal. But in this case, the approach would be riskier for the Region since we could
finance projects that will not bring to the expected results”.
4.1.3 Policy strategy. The policy strategy variable refers to the approaches that
policymakers can adopt to exploit a competition-based approach as innovation policy
instrument. Two different strategies emerge, whose main differences are summarised in
Public institutions may directly play the seeker role (i.e. implementing a direct strategy) or
enable other organisations to launch their own competitions to streamline innovation
activities (i.e. implementing an indirect strategy).
On the one hand, through a direct strategy, a public institution can directly fund innovation
activities through competition-based approaches that, for example, may impact the
territory’s economic and social development. The regional actors involved during the
interviews have widely cited this strategy. For instance, a manager of a regional institution
stated: “Lombardy is already playing an important role in the innovation landscape by
directly funding innovation projects, for example, by exploiting public calls for proposals. It
would be interesting to complement this approach with new policy instruments. The Region
could choose the topics of the calls or of the prizes according to the social problems it has
to tackle”. On the other hand, through an indirect strategy, a public institution can play an
enabling role by providing other organisations with ad hoc instruments that support them in
exploiting the potential of competition-based approaches to foster their innovation activities.
For example, a public institution can make a Web platform available to other organisations,
which enables them to search for working solutions to their innovation problems, thus
connecting the supply and demand for innovation.
Interestingly, the role played by the public institution affects the other characteristics of both
strategies, that is, the actor in charge for the definition of the innovation topic to be
addressed and the type of innovation topic addressed, as reported in Table 4.
In general, the policy strategy has been identified as the first variable to be defined by the
policymakers while exploiting a competition-based innovation policy instrument. As stated
by the Chief of Lombardy innovation office, “We have to decide first how the Region wants
to foster innovation in terms of active (direct) or enabling (indirect) role, and then we can
discuss the other aspects accordingly”. In other words, policymakers must first choose the
strategy to follow and then select the best approach (i.e. by properly addressing the other
two variables), consistently with the chosen strategy).
4.2 A taxonomy of competition-based approaches
The ability of the three above-mentioned variables to discriminate among the different
competition-based approaches was further confirmed by the answers obtained from the
Table 4 Main characteristics of direct and indirect strategies
Characteristics Direct strategy Indirect strategy
Role of the policymaker It plays a “direct” role (i.e. as seeker) by
defining how the firms are involved in the
It plays an “indirect” role by developing an
initiative to support innovation activities by
firms (that work as seekers) and defining its
Actor in charge for the definition of the
The policymaker (operating as seeker)
defines the innovation topics on which the
participants (operating as solvers) must work
The seeker (e.g. a firm) defines the innovation
topic on which the participants (operating as
solvers) must work
Type of innovation topic addressed Participants are typically asked to solve
Participants are typically asked to solve
problems that are useful for the seeker
Source: Authors’ elaboration
PAGE 146 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023
European policy experts involved through an ad hoc survey. Indeed, they fully agree that
the three variables identified are relevant for clustering the different competition-based
approaches. Moreover, the majority of respondents (62%) state that no other relevant
variables should be considered to classify different competition-based policy instruments.
Interestingly, some experts suggested a few additional variables that could be considered
to further enrich the taxonomy of competition-based approaches. Such variables are
primarily related to operative aspects, such as intellectual property rights considerations or
how a firm can use the prize received. Regarding the latter, such evidence is consistent
with the one collected by some of the interviewed key informants. As stated by a manager
of a regional institution: “When talking about prizes, you should differentiate between prizes
that are awarded without conditions (i.e., cash prizes that have no conditions on how the
money can be spent or can be used for the general improvement of the winner –e.g.,
Queensland Tourism Innovation Awards –and “competitions”). In other words, is the
competition a grant program whereby the funding must be used to support specific
activities associated with the competition, or can the funding be used for purposes not
associated with the competition itself?”.
By leveraging the empirical analysis, a taxonomy including eight competition-based
approaches to foster innovation by policymakers is proposed, as illustrated in Figure 3. The
taxonomy was developed by first addressing the Policy Strategy (i.e. direct or indirect),
which in turn affects the other characteristics of the related competition-based approaches.
Therefore, two clusters of approaches are encompassed in the taxonomy, each one related
to one of the two policy strategies identified. Each cluster includes four approaches, as a
function of the features of the two other variables (i.e. Scope breadth and Output Required).
4.2.1 Direct strategy. Through a direct strategy, policymakers play an active role by
operating as seeker as well as defining the topics on which the actors involved must work
(usually addressing a societal problem) and rewarding them. In this domain, four different
competition-based approaches are identified: Award, Prize, Call for grants and Public
188.8.131.52 Call for grants. A call for grants is an innovation policy instrument through which a
policymaker defines the innovation problem to be solved or the scientific and technological
field it wants to address via a broad brief. The firms (or researchers) answer the call by
submitting a proposal that describes the project they would put in place to solve the
innovation problem. Then, the public institution selects the best proposal(s) and finances or
co-finances the execution of the project(s). Examples of Calls for Grants are the Seventh
Framework program of the European Community or the calls for projects by the US National
Figure 3 Taxonomy of competition-based approaches to foster innovation by
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 147
Science Foundation. Calls for grants are particularly useful in reducing the cost of specific
innovation projects, for example, those related to environmental issues, which firms would
not otherwise pursue.
184.108.40.206 Prize. A prize is an innovation policy instrument through which a policymaker offers a
reward to the actor who is able to provide the best solution to a detailed innovation problem,
which is shared via a precise brief. The (inducement) prize pushes several actors to
compete to develop a solution to a specific innovation problem, and usually, the cumulative
investments made by the participants in the prize are larger than the prize itself (Liotard and
Revest, 2018). In other words, by increasing the demand for innovation, the prize stimulates
the development of different solutions characterised by different development paths. A
relevant example of this instrument is the L-Prize initiative promoted by the US Department
220.127.116.11 Award. An award is an innovation policy instrument that targets a specific solution to
be developed. Unlike a Prize, the solution is not developed starting from a precise brief but
from considerations related to a broad field or a wide social problem (i.e. a broad brief). A
relevant example is the #EuvsVirus, which awards the efforts carried out by multi-disciplinary
and multi-nationality teams with innovative solutions to fight against the social, economic and
health consequences of coronavirus pandemic. In this vein, a public institution can support
research and innovation by offering, even on a recurrent basis (e.g. annual basis), an award
related to different disciplines or social problems (e.g. sustainability and health care).
18.104.22.168 Public procurement. A public procurement is an innovation policy instrument that
requires participants (e.g. firms) to submit a proposal to solve an innovation problem
defined by a public institution, which is shared via a detailed brief. Participants should be
able to demonstrate the feasibility of the proposed solution. For instance, in 2011, the
Lombardy region launched a Public procurement initiative to promote the development of
energy-efficient components for its public transportation system. Within the proposal,
participants were asked to prove the technical feasibility of the developed solution.
4.2.2 Indirect strategies. Through an indirect strategy, policymakers play an enabling role
by providing ad hoc services (especially Web-based ones) to support other actors (e.g. firms) in
exploiting competition-based approaches to foster their innovation activities. Hence, such actors
define the problems, and their main benefits in exploiting such mechanisms refer to the
possibility of tackling their innovation problems, developing new expertise and interacting with
solvers. Four different competition-based approaches are identified in this domain: Competition,
Development platform, Knowledge repository and Partner searching.
22.214.171.124 Competition. A competition is an innovation policy instrument that requires the
public institution to make a Web platform available to other actors (e.g. firms) that enables
them to search for working solutions to their innovation problems, which are shared via a
precise brief. Firms can organise a contest involving potential solvers through the Web
platform. This approach resembles the innovation contest adopted by innovation intermediaries,
such as Qmarkets and Wazoku, in the private sector. An interesting example refers to the Open
Innovation platform created by the Lombardy Region. Through such instruments, policymakers
can build innovation contest systems for specific fields, co-finance the monetary rewards for
projects of interest for the territory or even post their own briefs to tackle specific territorial
problems. Hence, this approach may be useful for a Region to increase the demand for
innovation by creating a market for innovation.
126.96.36.199 Development platform. A development platform is an innovation policy instrument
through which a policymaker provides a Web platform that makes it easier to connect the
demand and offer for innovation. Moreover, other complementary assets that can be offered
by policymaker refer to facilities and/or public spaces, as well as data and other
infrastructures that could be made available for actors (e.g. firms) interested in leveraging
them to develop innovative products or services. This instrument enables firms to create
PAGE 148 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023
and sell working solutions to a specific market without following a precise brief. In the
private sector, one of the most famous examples of this approach is represented by the
Apple Store, where developers sell working applications (i.e. solutions) they develop for the
iPhone or iPad without following a precise brief and advertise them through the store.
Similarly, the US Government exploited this approach via the US National Innovation
Marketplace. By leveraging this platform, “your invention might be found by a buyer
searching the marketplace”.
188.8.131.52 Knowledge repository. A knowledge repository is an innovation policy instrument
that requires the public institution to make a Web platform available to other actors (e.g.
firms) that can advertise their expertise or propose innovation projects without sharing a
precise brief. This instrument supports innovation by making it easier for such actors to
understand the expertise that can be found in a territory. The innovation effort is left to these
actors in terms of identifying the innovation problem on which to work, as well as
determining the effort to develop the solution. A relevant example of this instrument
developed in the Lombardy region refers to QuESTIO (Quality Evaluation in Science and
Technology for Innovation Opportunity), that is, a tool designed by the Lombardy region to
promote the innovation ecosystem through the mapping of Research and innovation
centres, productive activities and technology clusters in the Lombardy region. The tool aims to
offer visibility to registered subjects, mapping skills, infrastructures, networks and collaborations
of productive activities active in the field of innovation, as well as promote the exchange of
knowledge between innovation centres and production activities, the development of
collaborations and networks, both within the technical-scientific community and towards the
business world and the innovation services offered by individuals.
184.108.40.206 Partner searching. Partner searching is an innovation policy instrument through
which a public institution may support other actors (e.g. firms) in finding the right partners to
collaborate with to solve specific innovation problems. The public institution makes a Web
tool available to actors having a specific innovation problem to be solved, to support them
in searching for the most appropriate innovation partner. Example of this innovation policy
instrument is Eupartnersearch. This platform allows organisations and people to not only
disseminate their projects and related progresses for free to accelerate and make easier
the finding of experienced partners but also find project ideas to support. In particular, this
platform fosters the exchange of ideas and the establishment of partnership among
European entities as well as the development of new practice for training and education. In
the private sector, many platforms that offer similar services do exist. For instance,
Crowdspring allows firms to publish a precise brief that describes the innovation problem to
be addressed (i.e. a design issue such as logos, websites, product packaging or product
designs). Then potential solvers (i.e. designers) communicate their interest in the innovation
problem by sharing a concept based on the brief and receive feedback from the firm to
improve it. Finally, the firm chooses the best proposal and manage price negotiation to
close the agreement with the selected solver.
4.3 The positioning of competition-based approaches among innovation policy
The eight competition-based approaches identified are then discussed against the taxonomy
of innovation policy instruments proposed by Edler and Georghiou (2007) introduced in
Regarding the direct strategy, two of the identified competition-based approaches were
already included in this taxonomy, that is, Call for grants (as “Grant for Industrial R&D”) as
supply-side measure and Public procurement (as “Public Procurement Policies” within the
above-mentioned taxonomy) as demand-side measure. Instead, Award and Prize represent
two additional innovation policy instruments based on competition-based approaches that
were not included in the taxonomy. In particular, both instruments offer a reward for the
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 149
achievement of a predefined innovation objective, thus creating or reinforcing the demand for
innovation. Therefore, such measures can be mainly considered as demand-side measures.
Considering the indirect strategy, Knowledge repository and Partner searching –which favour
innovation by making it easier for actors such as firms to access external partners and
expertise (i.e. supply-side measures), thus improving the environment (i.e. the innovation
system) in which they exert their innovation effort –were already included in the taxonomy, as
“Information & Brokerage Support”. Instead, Competition and Development platform were not
included in the taxonomy. These measures stimulate innovations by providing platforms
through which firms can foster their innovation activities, therefore being supply-side
measures. Thus, similarly to the service measures that Edler and Georghiou (2007) have
identified, Competition and Development Platforms can be conceived of as service supply-
side measures, as they represent a platform-based service offered by a public institution to
make the market for innovations more effective. Table 5 summarises the relationships between
the existing taxonomy and the competition-based policy measures identified in the study.
Finally, Figure 4 shows how the competition-based approaches identified are integrated
within the Edler and Georghiou (2007) taxonomy of innovation policy instruments to obtain a
more comprehensive taxonomy of such instruments.
In the past years, competition-based approaches have gained increasing attention by
innovation management scholars and practitioners (Letina and Schmutzler, 2019), as they can
have a pivotal role in supporting companies in advancing research and technology and
acquiring externally generated knowledge to address unsolved innovation issues, as well as
increasing public and sectoral awareness on specific issues affecting the society (Kay, 2011).
However, despite they have been recognised as valuable policy instruments that policymakers
can exploit to support innovation and in particular external knowledge search, a limited attention
has been devoted so far to such approaches from the policymakers’ perspective. In particular,
there is a lack of studies characterising the peculiarities of competition-based approaches
suitable for policymakers with respect to those exploited by the private sector, as well as
positioning them among innovation policy instruments (Kay, 2011). Therefore, this study
explored the crucial and under-researched topic of which competition-based approaches can
be exploited by policymakers as innovation policy instruments to foster external knowledge
search by developing a novel taxonomy including eight competition-based approaches.
Moreover, the identified competition-based approaches are contextualised among the
innovation policy instruments by enriching a well-established taxonomy of such instruments.
Our study provides different theoretical contributions. First, we add to the current innovation
policy literature, by identifying a set of (eight) competition-based approaches that policymakers
Table 5 Relationship between the identiﬁed competition-based approaches and the innovation policy instruments
proposed by Edler and Georghiou (2007)
Competition-based approaches Innovation policy instrument proposed by Edler and Georghiou (2007)
Direct strategy Call for Grants Grant for Industrial R&D
Public Procurement Public Procurement
Prize New category
Award New category
Indirect strategy Knowledge repository Information & Brokerage support
Partner searching Information & Brokerage support
Development Platform New category (Services)
Competition New category (Services)
Source: Authors’ elaboration
PAGE 150 jJOURNAL OF KNOWLEDGE MANAGEMENT jVOL. 27 NO.11 2023
can implement to stimulate innovation; only four of these approaches were already addressed
within the extant literature (Edler and Georghiou, 2007). Accordingly, the study contributes to the
extant literature by filling the gap on the lack of a comprehensive categorisation of the different
competition-based approaches that can be exploited by policymakers to stimulate innovation
and their positioning among the broader innovation policy instruments, thus providing
policymakers with a reference framework to develop innovation policies based on competition-
based approaches to stimulate innovation by policymakers, consistently with their strategies and
objectives (Jugend et al., 2020). Second, the study adds to the sparkling debate on open
innovation by proposing specific (innovation policy) instruments that may help policymakers and
practitioners to promote innovation projects consistently with open innovation principles
(Chesbrough, 2006,2009). Such instruments have been recognised as a critical aspect to
stimulate a higher diffusion of open innovation, even among SMEs (Vanhaverbeke et al.,2018).
Third, our study shows how a policymaker may foster innovation by designing and implementing
different types of competition-based approaches. Therefore, we contribute to the innovation
policy literature by discussing on how policy strategies, as well as the scope breadth and output
required, do affect the specific competition-based approach to be chosen (Adamczyk et al.,
2012;Kokshagina et al., 2017). For these reasons, the present study also contributes to the
extant literature on knowledge management by unveiling the features of different types of
competition-based approaches that can be exploited by policymakers, which may affect the
most suitable knowledge management approaches and tools to be adopted to manage them in
an effective way (Natalicchio et al., 2017).
Our study provides a number of practical contributions too, especially for policymakers.
First, policymakers can support their innovation policy decisions by considering the full
array of alternatives (i.e. innovation policy instruments) included in the enriched taxonomy.
This is particularly useful to identify the most suitable policy instruments consistently with
policy strategies and objectives, also in the light of resource constraints catheterising the
public sector. Second, the research indicates a new set of instruments that policymakers
can use to stimulate innovations on the demand side, in addition to supply side. In
particular, policymakers can increase the demand for innovations by creating specific
Figure 4 Innovation policy measures framework considering competition-based
VOL. 27 NO. 11 2023 jJOURNAL OF KNOWLEDGE MANAGEMENT jPAGE 151
platforms in which firms can exchange innovations among themselves, without a direct
financial support from the public institution. Third, public institutions may consider adopting
some of the identified and presented instruments related to a competition-based approach
to accelerate the discovery and implementation of innovative solutions to tackle the
emerging crisis and the subsequent recovery.
This study is not exempt from limitations. First, the paper has an exploratory intent, and the
sample of analysed cases is quite small. To address this limitation, we aimed to maximise the
generalizability of our study by reviewing the most diffused competition-based experiences
involving policymakers and other key informants in one of the most advanced regions in
Europe such as Lombardy and by further involving European experts through a survey.
Interestingly, the result of the survey supports the findings of previous empirical investigations.
Nevertheless, given the qualitative nature of the data as well as the sample size, future
confirmatory quantitative research could be useful to further increase the generalizability of our
findings (Yin, 1984). Moreover, given that the empirical investigation is based on the
involvement of key informants based in Italy (and especially in Lombardy) as well as in Europe,
further studies may test the applicability of the different competition-based approaches
proposed in different cultural contexts to bring into light similarities and differences and, thus,
potentially increasing the generalizability of results.
Second, a discussion on the applicability and effectiveness of the proposed instruments with
reference to different types of actors involved (e.g. SMEs vs large corporations) is missing, also
in the light of firms’ capabilities in accessing such instruments (Fiorentin et al., 2021). We hope
that our work will inspire other researchers to engage in such an effort, which we consider highly
relevant for informing policymakers interested in promoting innovation policies. For instance, it
would be very interesting to analyse the problem from the SMEs’ perspective. Indeed, extant
literature recognises that the external knowledge search may be risky (Fleming, 2001)and
require dedicated resources that SMEs not always own (Leckel et al.,2020;Hervas-Oliver et al.,
2021). Interestingly, from discussions with the key informants in the Lombardy region, it
emerged that SMEs could encounter difficulties in benefitting from some competition-based
approaches, such as public prizes because, because of the related costs they must sustain up-
front, without being sure of winning the competition. Another related issue that opens up
interesting avenues for future research refers to the identification of knowledge management
approaches and tools that must be adopted to manage the different competition-based in an
effective way, whose identification could require more fine-grained analyses that deeply explore
the features of different types of competition-based approach (e.g. by using the design
elements proposed by Doppio et al.,2020).
Finally, we acknowledge that the different competition-based approaches for policymakers
to foster innovation that we propose are presented and discussed as single approaches. It
would be interesting to investigate how to combine different approaches in a structured way
to obtain a higher effect on specific innovation problems (Borr
as and Edquist, 2013).
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Paolo Landoni is based at the Department of Management and Production Engineering,
Politecnico di Torino, Turin, Italy.
`is based at the Department of Management, Economics and Industrial
Engineering, Politecnico di Milano, Milan, Italy.
Davide Viglialoro is based at the Norwich Business School, University of East Anglia (UEA),
Norwich, UK and the Department of Management and Production Engineering, Politecnico di
Torino, Turin, Italy.
Alessandro Laspia is based at the Department of Management and Production Engineering,
Politecnico di Torino, Turin, Italy.
Roberto Verganti is based at the House of Innovation, Stockholm School of Economics, Stockholm,
Sweden and the Department of Management, Economics and Industrial Engineering, Politecnico
di Milano, Milan, Italy.
`can be contacted at: email@example.com
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