Unravelling innovation transition traps: the imperative of collective action

Peter Wostner, Anže Burger, Iztok Palčič and Sonja Šlander Wostner

Chapter 11 in Research Handbook on Regions and Transformative Innovation Policy, 2026, pp 172-192 from Edward Elgar Publishing

Abstract: The chapter investigates to what extent slow progress towards high income levels may stem from the failure to transition from exploitative innovation based on implementation capabilities to more exploratory innovation based on design-based capabilities. We show, in the case of Slovenia, that firms engaging in the latter indeed tend to be more productive. But, as firms navigate such innovation transition, their performance becomes increasingly reliant on collaboration with other stakeholders. This is because firms become faced with greater complexity and higher risks, and require access to more specialised capabilities while firm-level complementarities grow stronger. Innovation transition therefore requires a cooperative, ecosystem-based strategy as promoted by transformative innovation policies (TIP). Although Slovenia's Smart Specialisation approach has delivered strong results for individual firms, these successes have not translated into widespread impact due to inconsistent application of four essential mechanisms required to scale pilot successes and reach critical mass through collective action.

Keywords: Innovation; Development traps; Transformative policy; Ecosystems; Smart Specialisation; Collective action (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035309924
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