Contributions of Living Labs in reducing market based risk

Abstract

Traditionally, the gap between research and innovation has been covered by startups and entrepreneurs who take on the risk and the uncertainty associated with bringing to market novel products or services. Public intervention in innovation has indeed attempted to lower that risk, but his intervention has been commonly associated to increasing the availability of factors that could trigger innovation, such as capital or research potential, rather than reducing the risks associated with the market, such as product/service or business model inadequacy. However, experience shows that are these market risks the main culprits of the failure of new ventures. Recently a new kind of institution called Living Labs, aims to address this area, providing not only help in managing market risks but the kind of entrepreneurial spirit that could push innovation forward while helping in creating an initial demand that might foster its development.