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Digitalization is the great global challenge of the twenty-first century including technologies, like, Internet-of-Things, Big Data and block-chain. New digital innovation can play a crucial role for the competitiveness and sustainability of agro-food small and medium-size enterprises (SMEs) but in Europe it has been adopted by only 25% of farmers. Joined participation in EU R&D projects can boost SME's digital innovation. The paper aims to analyze how business networking, within a R&D project, affects the digital innovation of agro-food SMEs.

The paper investigates a single longitudinal case study focused on the local development phase of the EU Horizon 2020 project “Eugenius”, which aims to develop a European business network able to provide Earth observation services for natural resources management in agriculture. The focus is on the dyadic relationship between two firms, the winery Tormaresca and the digital innovation provider Planetek.

Results highlight that the process of commercialization of Planetek's innovative services significantly passes through a multifaceted process of development and adaptation of technology to the specific needs of the user company, allowed by the research project with no expense for both companies during the experimentation phase.

The paper deals with a new underexplored topic thus giving interesting insights into how the R&D project participation affects agro-food SMEs in adopting digital innovations, which are difficult to acquire directly, and how this influences the value creation process and their organizational structure.