Upgrading the DUI mode: Human Resources Practices for the Targeted Promotion of firm Internal DUI Innovation

Abstract Over the last twenty or so years, research on the Doing, Using and Interacting (DUI) mode of innovation and learning has shown the importance of corporate innovation processes outside traditional research and development (R&D). However, it has concentrated on DUI innovation processes with external actors at the expense of considering firms’ internal DUI processes. Based on 59 semi-structured interviews with key individuals in small- and medium-sized enterprises (SMEs) in six economically lagging regions of Germany, this qualitative study analyses these internal innovation processes. It investigates how these processes can be promoted through human resource management (HRM) practices, specifically. These regions facilitate the analysis of internal innovation processes, as innovative firms there have to focus on internal innovation capacities in a structurally weak environment. The analytical framework builds for the first time a coherent model of firms’ internal DUI innovation culture. It identifies four different building blocks by integrating DUI literature with research literature about learning organisations, cooperation culture and HRM practices. The empirical findings formulate four fields of action for DUI-oriented HRM practices, each of which addresses a building block of a DUI innovation culture. They are: financial and non-financial incentive systems; team-building measures across departments; practices for establishing employee-driven governance; and internal and external training measures. Each of these four fields of action – and thus, indirectly, SMEs’ internal DUI activities – are influenced by the regional environment. These environmental aspects are the employees’ roots in the region, the regional culture, and the proximity to counselling service providers and training providers.