The success of the Norwegian salmon farming industry has been based on innovations that have increased productivity. These innovations in biology, technology, organization, products, and marketing were supported by collaborative and open R&D efforts, mainly funded with public funds.
Selective breeding allowed salmon to grow faster; more effective vaccines solved major problems, and improved feed and selective breeding accelerated growth and improved feed utilization efficiency.
The early years of the salmon farming industry relied on trial and error but also on cooperation and knowledge sharing. However, in recent years, there has been a shift towards a growing proportion of privately funded R&D, leading to more closed innovation processes.
Researchers from Nofima and the University of Oslo published a study exploring the importance of open innovation in the success of salmon farming and the potential consequences of more closed innovation processes in the Norwegian salmon farming industry.
Innovation and Productivity in the Salmon Farming Industry
Salmon farming in Norway experienced strong and sustained growth from its inception in the 1970s until 2012. Since 2012, the production volume has remained relatively stable, with moderate changes from year to year but with some recent increases.
According to the researchers, “The growth in industry productivity indicates that innovation has been high in salmon farming, but also that with declining productivity in recent years, the need for innovation remains high, particularly to address environmental challenges such as sea lice and diseases.”
Environmental challenges are issues that the entire industry must address through innovation that is disseminated to all members of the salmon farming industry.
Closed Innovation in the Industry
“Some suppliers to fish farmers tend to keep their innovation processes and challenges closed, as demonstrated by feed companies, pharmaceutical companies providing vaccines and treatments for sea lice, and equipment providers. These suppliers offer alternative solutions, leading to intense competition,” report the researchers.
In the marine phase of salmon farming, which is generally more open, the researchers identified some areas that could be closed to competitors, such as certain parameters influencing production and productivity, for example, feed content and feeding practices.
According to the study results, while the general perception of aquaculture is that it is an industry characterized by openness, a closer examination reveals important areas of closure.
“A series of competitive parameters are decided internally, as, for example, production methods (such as feeding regimes) are quite well hidden from competitors,” they highlighted.
They also described that although all reports of publicly funded projects are available, the information may be challenging to find; thus, being part of a research and innovation project means having access to knowledge before the project concludes.
Finally, the researchers found that salmon companies acquire knowledge from knowledgeable companies when solutions are commercially available or gain knowledge through cooperation by joining common projects.
The researchers report that actors in the salmon industry’s value chain have different openness policies. They also found that companies had exit strategies, as it was evident that openness would have limits.
According to the researchers, “When new common knowledge is achieved, discussions on how to implement or adapt it to the company’s strategy would be kept within the company, closed to competition.“
“The degree of openness also seems to depend on the role or position in the organization. Different attitudes towards sharing can be found within companies; while top management may emphasize the strategic benefits of owning information or be concerned that sharing information could lead to a loss of competitive advantage, lower-level workers, site managers, and operators still openly exchange information with neighboring companies,” they reported.
An important aspect identified by the researchers is that veterinarians and fish health experts working with several companies play a significant role in creating a common knowledge set, spreading both formal and experience-based knowledge.
Openness in Innovation Processes
“We found that openness and the exchange of information and knowledge have been common among producers in the industry, while less so among industry suppliers. Common R&D projects funded by public funds, along with the need to address common challenges, keep innovation processes open,” they emphasized.
According to the researchers, common challenges are characterized by requiring open and collaborative solutions among all involved actors, often among actors from all parts of the value chain or all actors involved in a regional area.
“When exploring how openness to innovation occurs among actors in the aquaculture industry, we find common solutions, which is our main contribution to the theory. Common solutions are different from closed, incoming, and outgoing innovation and strategy, as they involve collective search and networking through collaboration and follow-up,” they indicated.
As the researchers warn, open innovation has been vital for the salmon farming industry, while now, we are witnessing more closed innovation processes, which could severely hinder the industry’s long-term innovation capacity.
“Closing innovation processes will affect the long-term innovation capacity of the aquaculture industry,” they concluded.
According to the study results, a series of innovations have materialized in salmon farming, such as significant genetic progress, efficient vaccines against major diseases, more efficient feeding, and improved technical solutions. However, several common problems still need to be addressed, such as parasites, diseases, and escapes.
“Innovation in salmon farming tends to become more closed as the industry consolidates, with larger companies and innovation occurring closer to the market,” the researchers concluded.
However, they warn that the study’s findings suggest that openness in innovation processes will remain vital for continued progress in the salmon farming industry.
The study was funded by the Norwegian fisheries and aquaculture research financing, FHF.
NOFIMA, Tromso, Norway
Reference (open access)
Audun Iversen & Katja Maria Hydle (2023) High innovation intensity in fish farming: The role of openness in innovation and strategy, Aquaculture Economics & Management, DOI: 10.1080/13657305.2023.2193161