Open Innovation: A Case-study of the Hungarian Wine Sector

An effective innovation system is crucial for food companies to counteract international competitive pressure. An important issue is whether it is more effective to innovate by sharing ideas and resources with other companies, or to innovate in-house. The question is how to arrange external ties without compromising unique knowledge and assets. This is particularly controversial in the wine sector, where innovative marketing strategies have to be combined with ‘exclusive’ and ‘secret’ recipes. We use primary data on the Hungarian wine industry. We find that Hungarian wine companies are actively using ‘open sources’ in their innovation processes, even more than commonly acknowledged in the literature and the policy debate. Furthermore, we find that both regional and company-specific factors affect the openness of innovation processes. Our findings point to the importance of the flow of new ideas that comes from global trends and from dealing with foreign companies and stakeholders. This result is supportive of internationalisation strategies at both company and sector level. Furthermore, our findings are supportive of policies oriented towards the creation of business parks and rural clusters, where farmers, processors and tech-companies can establish networks to create new products and/or processing technologies.