The role of sectoral and regional innovation systems in supporting innovations in forestry Klaus Kubeczko a, * , Ewald Rametsteiner b , Gerhard Weiss b a ARC systems research, Department of Technology Policy, Seibersdorf - Vienna, Austria b European Forest Institute Project Centre INNOFORCE and University of Natural Resources and Applied Life Sciences (BOKU), Vienna, Austria Abstract This paper asks to what extent sectoral or other innovation systems support the innovation performance of forest holdings. Special focus is put on product and service innovations, as these tend to create new income and employment in forestry and therefore contribute to rural development. In the course of a joint, coordinated research project by research institutions from Central European countries, the innovation behaviour of forest holdings, innovation systems and cases of successful innovations were investigated in these countries. Analysis shows that the sectoral innovation systems in forestry, as is typical for innovation systems in traditional sectors, are focused mainly on process innovations. Support of product and service innovations by the forestry institutional system is limited to diffusion programmes for selected topics. The development of product and service innovations — as studied using the examples of nature conservation and bio-energy — is typically supported in cross-sectoral regional innovation arenas rather than in well-developed sectoral or regional innovation systems. Only the diffusion of these innovations is supported by forestry sectoral innovation systems. It is concluded that for the purpose of fostering product and service innovations in forestry, more systematic cross-sectoral interaction by the forestry institutional system with other sectors and support of innovations at an earlier stage would probably increase the rate of innovation in the sector. D 2005 Elsevier B.V. All rights reserved. Keywords: Product and service innovations; Innovation systems; Bio-energy; Nature conservation; Central Europe 1. Background and research questions Due to the expansion of the European Union and ongoing globalisation, profound political, social and economic transitions are taking place in Europe. These transitions affect the economic, ecological and social spheres. Most innovation research presupposes that innovation is a remedy to a set of economic and social problems. In the main innovation literature (Edquist, 1997; Fagerberg, 2004; Malerba, 2004), innovation is assumed to support economic growth, make a country more competitive and provide more 1389-9341/$ - see front matter D 2005 Elsevier B.V. All rights reserved. doi:10.1016/j.forpol.2005.06.011 * Corresponding author. E-mail address: klaus.kubeczko@arcs.ac.at (K. Kubeczko). Forest Policy and Economics 8 (2006) 704 – 715 www.elsevier.com/locate/forpol