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Abstract
This paper examines two models of interaction between private and public institutions in respect
to the process of innovation. While private firms adopt proactive strategies and public institutions
follow it is considered that, under certain conditions, public institutions are the
innovator and private firms are the followers. The first part of the research is theoretical and
formulates the two models and their implications. The second part presents a case study of Italian
products which have Animal Welfare (AW) attributes, where production follows the second
relationship model. The case study shows that AW friendly products are the result of EU
legislation, which obliges the industry to adapt production, organisation, publicity, communication
and promotion. This is the inverse of the traditional relationship where private firms take
the initiative.