Knowledge in Motion: Knowledge Spillovers from Innovation Grants through Employee Mobility

Abstract

Governments widely use public innovation grants to support innovation, yet research on such support has focused mainly on direct effects on recipient firms. This article examines how such grants may, under certain conditions, generate indirect knowledge effects through employee mobility. The study is based on a qualitative single-case study of Marorka, a firm that received repeated public innovation grants between 2000 and 2016, and on semi-structured interviews with former employees. The findings suggest that repeated grants supported continued development work and the accumulation of knowledge within the firm. When employees move to other firms, they seem primarily to carry general technical and market knowledge, relationships, and experience-based innovation capabilities, whereas more specialized knowledge appears to have been most useful when new firms were established in related contexts. The article thus contributes by identifying a plausible causal mechanism through which innovation grants may support knowledge creation in recipient firms that later travels onward through employee mobility and offers insight into one underexplored channel of indirect effects of innovation policy.