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Public-private innovation (PPI) is often claimed to contribute to societal welfare, to bring positive effects to the public sector and to open new markets to private firms. Engaging in public-private relationships for innovation is, however, also recognised as challenging and problematic. The purpose of this paper is to discuss the managerial and strategic challenges faced by private firms when engaging in public-private relationships for innovation.

This qualitative study presents ten firms’ engagement in public-private relationships. Half of them are experienced in innovation in public-private relationship, the other half are engaging in public-private relationships for the first time. Cross-case analysis brings insight into how these different types of firms strategize for handling relationships with public partners.

Contrary to non-experienced firms, experienced firms deliberately build a long-term strategy for engaging in PPI in expectation of outcome from more than a single project. They not only engage in building an understanding of the public using setting, but also seek to bridge with the public developing and producing setting to a greater extent than less experienced firms. The experienced firms utilise relationships with actors in the wider public network as a device and an asset for overcoming challenges and for reaping benefits from their engagement.

The study outlines the characteristics of strategizing among the most experienced firms and their special ability to embrace the complexity of the public sector network while working simultaneously on developing innovation for specific public counterparts.