Promoting cooperation in innovation ecosystems: evidence from European traditional manufacturing SMEs

We investigate whether public support for innovation increases the propensity of SMEs in traditional manufacturing industries to cooperate for innovation with other firms and external knowledge providers. Using data from seven EU regions, we report positive yet heterogeneous impacts: support programmes do not promote cooperation with competitors, marginally promote cooperation with customers and suppliers, and strongly promote cooperation with private and public knowledge providers. Across all size categories of SMEs, we find a more systematic impact of public support on cooperation with knowledge providers than on inter-firm cooperation. Regarding funding, national sources promote cooperation with public research centres while both national and EU sources promote cooperation with consultants and universities. The evidence suggests that public support may be particularly effective in promoting cooperation in the context of incremental innovation. Finally, we argue that public support promoting firms’ cooperation for innovation contributes to the wider innovation ecosystem.