Industrial Diversity and Innovation Spillovers: Dynamic Innovation and Adoption. WWWforEurope Working Paper No. 45

This paper explores the links between open innovation and the emergence of a "phoenix industry" – the low carbon vehicles sector – in the UK traditional automotive heartland, focusing on the West Midlands region. It highlights three major factors in driving the development of this "phoenix industry" at a regional level. Firstly, it highlights the role of "open innovation" approaches in driving the sector and the increased interaction across technologies, up and down supply chains and between larger and smaller firms. Secondly, it points to the role of historic (and relatively immobile) investments in the region and cross-overs with the overlapping motorsport cluster. Finally, it stresses the role of public-private sector cooperation, informing regulation, and supporting development of the UK supply chain, the R&D funding programmes developed with industry input, and the earlier role of the Regional Development Agency. Overall, it points to the possibilities of building smart specialisation strategies and industrial policies which are aligned with "high-road strategies".