Innovation processes involve diverse sets of organizations including universities, private firms, corporate research labs and public research institutes. Collaborative forms of knowledge production and innovative activity enable actors to reduce risk, specialize, and take advantage of knowledge internal and external to the own organization. This paper discusses interactions and collaborations between public and private sector innovation. This is done through an analysis of semi-public research institutes in Sweden and their roles as arenas for R&D processes involving industry, university and government in terms of funding, research and public-private innovation. Particular attention is paid to technological niches of research institutes and utilization of research findings from collaborative R&D. The results show that institutes occupy specific niches which influence their ways of transferring knowledge. It is argued that diversity among R&D performers as well as funding opportunities is paramount for innovation systems to thrive.