Innovation in agriculture: An analysis of Swedish agricultural and non-agricultural firms

Abstract

This paper contributes to the literature on innovation in agri-food sectors. It presents a quantitative analysis of how innovation and innovation capacities differ between agricultural firms and firms in other sectors. With unique survey data on Swedish firms, we show that one-third of the firms in the agriculture sector are innovation creators. Moreover, incremental innovations in the form of firm-level technology adoption are not more prevalent in agriculture than in other sectors. These results indicate that agriculture does not appear as a special case concerning innovation output, besides their higher incidence of process innovations. The peculiarity of the sector rather seems to be related to firm-level innovation capacities. Our results suggest that agriculture is different in how they source relevant knowledge, which is a finding that could question the design of innovation support policies that emphasize collaborative research. Our findings rather point to a need of strengthening in-house knowledge capacities in agricultural firms. That would improve their capacity to participate in and benefit from collaborations with partners operating at higher levels in the knowledge system.