Bengt-Åke Lundvall (1992)
“National Systems of Innovation.
Towards a Theory of Innovation and
Interactive Learning ”. London: Pinter
Publishers. Chapter 1 / Introduction:
by Bengt-Åke Lundvall, 1-19.
Introduction (1)
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Theories are selecting “focusing devices” – a too long
lasting theoretical hegemony, therefore, may be
damaging:
“Theories in the social sciences may be regarded as ‘focusing
devices’. Any specific theory brings forward and exposes some
aspects of the real world, leaving others in obscurity. That is
why a long lasting hegemony of one single theoretical tradition
is damaging both in terms of understanding and policy-making”
(p. 1)
Introduction (2)
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Criticism against the static bias of “neo-classical”
economic theory:
“In the field of economics, the dominating neo-classical paradigm puts
its analytical focus upon concepts such as scarcity, allocation, and
exchange, in a static concept” (p. 1)
One alternative approach: emphasis of interactive
learning and innovation
“One aim of this book is to demonstrate the need for an alternative,
and supplementary, focusing device which puts interactive learning and
innovation at the centre of analysis” (p. 1)
Introduction (3)
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Research results from the IKE group at the Aalborg
University (with cooperation partners at SPRU/Sussex
University, Institute of Foreign Affairs in Oslo, and the
University of Paris):
“Through more than a decade, a group of economists at Aalborg
University, the IKE group, has worked together studying industrial
development and international competitiveness from such a
perspective. This book presents results from this work in relation to one
specific subject: national systems of innovation” (p. 1)
Introduction (4)
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Two key assumptions:
“Our choice of perspective and subject is based upon two sets of
assumptions” (p. 1)
Assumption One / Knowledge as key resource and
learning as key process – and knowledge differs
substantially from other economic resources:
“…it is assumed that the most fundamental resource in the modern
economy is knowledge and, accordingly, that the most important
process is learning. The fact that knowledge differs in crucial respects
from other resources in the economy makes standard economics less
relevant” (p. 1)
Introduction (5)
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Lundvall quote about the value of knowledge:
“Knowledge does not decrease in value when used. On the contrary, its
use increases its value; i.e. knowledge is not scarce in the same sense
as other natural resources and technical artefacts. Some elements of
knowledge may be transferred, easily, between economic agents while
others are tacit and embodies in individual, or collective, agents.
Knowledge I not easily transacted in markets and not easily privately
appropriated. In spite of attempts to find institutional solutions to the
problem (patent laws, etc.) property rights to knowledge are not easily
defined. When it comes to knowledge market failure is the rule rather
than the exception” (p. 18)
Introduction (6)
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Assumption Two / Learning as an interactive and
socially embedded process – modern nation states as
a necessary prerequisite:
“… it is assumed that learning is predominantly an interactive and,
therefore, a socially embedded process which cannot be understood
without taking into consideration its institutional and cultural context.
Specifically, it is assumed that the historical establishment and
development of the modern nation state was a necessary prerequisite
for the acceleration of the process of learning” (p. 1)
Introduction (7)
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The challenge of internationalization and globalization
for the nation state:
“Finally, it is recognised that the traditional role of nation states in
supporting learning processes is now challenged by the process of
internationalisation and globalisation” (p. 1)
National Systems of Innovation (1): A
First Definition (a)
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A first definition of a system:
“According to Boulding (1985), the broadest possible definition of a
system is ‘anything that is not chaos’” (p. 2)
A more systematic definition of a system:
“Somewhat more specifically, a system is constituted by a number of
elements and by the relationships between these elements” (p. 2)
National Systems of Innovation (2): A
First Definition (b)
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Definition of a system of innovation and a national
system of innovation:
“It follows that a system of innovation is constituted by elements and
relationships which interact in the
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production,
 diffusion
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and use of
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new, and economically useful, knowledge
and that a national system encompasses elements and relationships,
either located within or rooted inside the borders of a nation state” (p.
2)
National Systems of Innovation (3): A
First Definition (c)
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National system of innovation is a “social system”:
“… it is obvious that the national system of innovation is a social
system. A central activity in the system of innovation is learning, and
learning is a social activity, which involves interaction between people”
(p. 2)
National system of innovation is also a “dynamic
system”:
“It is also a dynamic system, characterised both by positive feedback
and by reproduction. Often, the elements of the system of innovation
either reinforce each other in promoting processes of learning and
innovation or, conversely, combine into const4llations blocking such
processes” (p. 2)
National Systems of Innovation (4): A
First Definition (d)
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National system of innovation “reproduces”
knowledge:
“Another important aspect of the innovation system relates to the
reproduction of the knowledge of individuals or collective agents
(through remembering)” (p. 2)
National Systems of Innovation (5):
Nation States and National Systems (a)
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The two dimensions of the nation state: “nationalcultural” and “étatist-political”
“The concept, national systems of innovation, presumes the existence
of nation states and this phenomenon has two dimensions: the
national-cultural and the étatist-political. The ideal, abstract, nation
state is one where the two dimensions coincide. …It I difficult to find
any nation states, in this strict sense, in the real world” (p. 2)
The Scandinavian/Nordic background of many of the
book authors:
“Most of the contributors to this book have their roots in a minority of
small countries which may be characterised as culturally homogenous
and socio-economically coherent systems (Sweden, Denmark and
Norway).” (p. 3)
National Systems of Innovation (6):
Nation States and National Systems (b)
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National system of innovation as an archetype
concept, challenged by globalization and
regionalization:
“On the other hand, it may be argued, it is quite useful, analytically, to
use concepts which are archetypes rather than ‘averages’. In order to
bring out sharply the limits and consequences of globalisation and
regionalisation, it is useful, at least as a starting point, to assume
countries to be homogenous in political and cultural terms” (p. 3)
National Systems of Innovation (7):
National Systems, Globalization and
Regionalization (a)
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Why to focus on national systems in an era of
globalization?:
“Readers might ask, why we focus on the national level, in an era where many
analysts point to an accelerating process of internationalisation and
globalisation, characterised by multinational firms loosening their relations to
their home-country and entering into alliances with foreign firms” (p. 3)
The importance and viability of national patterns:
“At the same time, a growing number of social scientists – often inspired by new
sets of ideas labeled ‘flexible specialisation’, ‘networking’ and ‘post-Fordism’ –
have argued that regional production systems, industrial districts and
technological districts are becoming increasingly important. Some authors
analyse these two tendencies as interconnected and mutually reinforcing. …that
globalisation, and international specialisation have their roots in the
strengthening of specialised technological districts and regional networks” (p. 3)
National Systems of Innovation (8):
National Systems, Globalization and
Regionalization (b)
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National systems are weakened by globalization and
regionalization:
“Both globalisation and regionalisation might be interpreted as
processes which weaken the coherence and importance of national
systems” (p. 3)
National Systems of Innovation (9):
National Systems, Globalization and
Regionalization (c)
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Important arguments in favor of still using the
concept of national systems of innovation:
Argument One / Communication – also, or even
primarily, based upon tacit knowledge – takes place
within national patterns:
“… we believe that national systems still play an important role in
supporting and directing processes of innovation and learning. The
uncertainties involved in innovation and the importance of learning
imply that the process calls for a complex communication between the
parties involved. This will especially be the case when the knowledge
exchanged is tacit and difficult to codify” (p. 3)
National Systems of Innovation (10):
National Systems, Globalization and
Regionalization (d)
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Argument Two / Globalization pushes strongest in
science-based and codified knowledge areas:
“On the other hand, it must be recognised that important elements of
the process of innovation tend to become transnational and global
rather than national – and here the trend will be most important in
science-based areas where the communication is easier to formalise
and codify. Some of the big corporations are weakening their ties to
their home-base country and begin to spread their innovative activities
and to ‘source’ different national systems of innovation” (p. 4)
National Systems of Innovation (11):
National Systems, Globalization and
Regionalization (e)
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Nation states in the Western world acted as “engines
of growth”:
“Behind the analysis lies also, as mentioned, the hypothesis that the
modern nation states in the Western world – not necessarily the new
states in the former colonies – have worked as ‘engines of growth’.
…Their social institutions and state policies have supported such a
transformation [rapid economic transformation] and new institutions
aiming directly at economic wealth creation through innovation have
been established” (p. 4)
The locality of the national systems of innovation:
“From what has been said, it is obvious that national systems of
innovation are open and heterogeneous systems. Processes of
innovation transcend national borders and sometimes they are local
rather than national. …the international specialisation was often
reflected in a regional specialisation within the countries” (p. 4)
National Systems of Innovation (12):
Public Policy and National Systems of
Innovation (a)
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The concept of “national system of innovation” can
inspire national and international policies:
“But the concept ‘national systems of innovation’ may also be useful
when it comes to inspire public policies at the national and international
level” (p. 4)
Argument One / Knowledge and sensitivity for the
specific context of government policies:
“… in order to determine what governments should do in order to
promote innovation, it is useful to know the specific systemic context in
which a national government intervenes” (p. 5)
National Systems of Innovation (13):
Public Policy and National Systems of
Innovation (b)
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Argument Two / Importance to know about
differences in national systems of innovation:
“… in the increasingly serious international conflicts about which
countries are paying for (the US) and appropriating benefits from
(Japan) the investment in science and development of new technology,
it is important to understand how different and very diverse national
systems work” (p. 5)
Argument Three / Support for cross-country learning:
“… in a world characterised by a radical shift in techno-economic
foundations, the ability of national systems to cope, successfully, with
change and to exploit new technical opportunities seem to be quite
divergent (Freeman and Perez, 1988). Learning from the experience of
foreign systems, in this respect, might be facilitated if the working of
the respective national systems as a whole are properly understood”
(p. 5)
National Systems of Innovation (14):
Public Policy and National Systems of
Innovation (c)
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The entering of NSI-vocabulary into the language of
policymakers: a need for a proper analytical
development of that concept
“The fact that it has already entered the everyday vocabulary of policymakers makes it even more important to give the NI-concept an
analytical basis” (p. 5)
National Systems of Innovation (15):
Performance of National Systems of
Innovation (a)
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A general definition for relevant performance
indicators of national systems of innovation:
“At this general level we would like to propose that the most relevant
performance indicators of national systems of innovation should reflect
the
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efficiency and effectiveness in
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producing,
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diffusing and
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exploiting
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economically useful knowledge.
Such indicators are not well developed today” (p. 6)
National Systems of Innovation (16):
Performance of National Systems of
Innovation (b)
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R&D as one set of NSI indicators:
“One of the classical measures for comparing different national systems
is R&D expenditure as a proportion of GDP. There are … obvious
problems with this indicator. …R&D expenditure is only one kind of
relevant input to the process of innovation – learning in connection
with routine activities may be more important than R&D” (p. 6)
A need for diffusion indicators:
“The output measures used are more recently developed and include
patents …, the proportion of new products in sales … and the
proportion of high-tech products in foreign trade… A common
weakness is that these measures do not take into account the diffusion
of process technology and in order to get a more complete picture,
indicators for diffusion should be taken into account” (p. 6)
National Systems of Innovation (17):
Performance of National Systems of
Innovation (c)
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Governments regard innovation policy as a key
element for national economic growth:
“Technical progress is not regarded as a goal in itself. The main reason
why national governments engage in innovation policy is the
assumption that innovation is a key element in national economic
growth” (p. 6)
Economic growth does not directly reflect innovation
indicators:
“Different indicators of economic growth (national income or
consumption per capita) are relevant when it comes to comparing
systems. But such indicators will reflect factors which have little to do
with innovation” (p. 6)
National Systems of Innovation (18):
Performance of National Systems of
Innovation (d)
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Different innovations systems can produce similar
economic growth:
“One interesting observation is that different systems may develop
different modes of innovation while still following parallel growth paths”
(p. 6)
National Systems of Innovation (19): The
Normative Dimension (a)
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Making the value premises of economic analysis
explicit: the value proposition of Myrdal
“The choice of performance criteria and of the respective weights to be
assigned to them are fundamentally normative decisions. …Myrdal
(1968) … argues that as a minimum requirement economists should
make explicit their value premises. …When studying the problems of
the poor Asian countries, he chooses to accept the set of value
premises predominating among the national establishments in the
countries studied – the ideal of modernisation” (pp. 6-7)
Should the proposition of Myrdal also be applied to
innovation?:
“Given the lack of alternatives, it is tempting to use a similar approach
to national systems of innovation” (p. 7)
National Systems of Innovation (20): The
Normative Dimension (b)
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Three levels of “value” (goal) analysis:
Level One / National level of analysis – goals of
economic competitiveness and growth:
“To identify the ambitions and goals of national governments in the
area of innovation is, apparently, quite easy. The public discourse is
dominated by references to the international competitiveness of the
national economy and to the national growth” (p. 7)
National Systems of Innovation (21): The
Normative Dimension (c)
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Level Two / International level of analysis – goals of
strengthening the economy and avoiding conflicts
within specific regions:
“Another level of analysis refers to the international organisations of
the rich countries such as the European Community and OECD.
Politicians and experts at this level are more oriented towards
strengthening economic growth in their respective region and towards
avoiding international conflicts within the community of countries they
represent” (p. 7)
National Systems of Innovation (22): The
Normative Dimension (d)
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Level Three / Global level of analysis – goals of
ecological sustainability and the reduction of extreme
social inequality:
“Finally, there is a global level of analysis, with a rather weak
representation in organisational terms – the UN organisations, global
environmental organisations, etc. At this level, it becomes more
obvious to experts and politicians that the long term survival of the
global economy is dependent upon ecological sustainability and upon a
reduction of the extreme social inequality at the global level” (p. 7)
National Systems of Innovation (23): The
Normative Dimension (e)
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Each value set of each level (of analysis) has its own,
specific legitimation:
“We do not find it proper to adopt the set of value premises of any
single one of these three levels, however” (p. 7)
First / There are arguments in favor of national
competitiveness:
“On the one hand, we consider national policies and goals, relating to
innovativeness and competitiveness to be legitimate, to a certain
degree. The pursuit of such goals has been an important motor behind
the dramatic increase in economic wealth in the OECD area and in
some newly industrialised countries in Asia” (p. 7)
National Systems of Innovation (24): The
Normative Dimension (f)
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Second / There are also arguments in favor of global
sustainability:
“On the other hand, we realise that some of the games related to
national science and technology policy may actually be zero-sum
games and that there is a growing number of examples of unpleasant
trade-offs between short term national economic growth and long term
global sustainability (in terms of environment, natural resources, etc.)”
(p. 7)
Third / Problem-solving often transcends the nationstate borders:
“The national context tends to become too narrow when it comes to
solving problems such as global inequity and sustainability. The value
premises of the national establishment must be confronted with these
broader and more long term concerns” (p. 7)
Towards a Theory (1): Innovation as a
Cumulative Process (a)
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For an advanced market economy, innovation is an
internal process:
“In modern capitalism, however, innovation is a fundamental
and inherent phenomenon; the long term competitiveness of
firms, and of national economies, reflect their innovative
capability and, moreover, firms must engage in activities which
aim at innovation just in order to hold their ground” (p. 8).[1]
[1]) “In the models of standard economics, innovations appear
as extraordinary events, coming from the outside, which
temporarily disturb the general equilibrium” (p. 8)
Towards a Theory (2): Innovation as a
Cumulative Process (b)
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Innovation is a permanent status of modern
economy:
“One of our starting points is that innovation is a ubiquitous
phenomenon in the modern economy. In practically all parts of the
economy, and at all times, we expect to find on-going processes of
learning, searching and exploring, which result in new products, new
techniques, new forms of organisation and new markets” (p. 8)
Towards a Theory (3): Innovation as a
Cumulative Process (c)
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Cumulative and radical innovation:
First / Gradual and cumulative innovation:
“The first step in recognising innovation as an ubiquitous phenomenon
is to focus upon its gradual and cumulative aspects. …Here
Schumpeter’s choice of terminology, where ‘innovations’ and ‘new
combinations’ are used as synonyms, is enlightening. Almost all
innovations reflect already existing knowledge, combined in new ways”
(p. 8)
Second / Radical innovation:
“And, sometimes, the process of innovation results in radical breaks
with the past, making a substantial part of accumulated knowledge
obsolete. Another of Schumpeter’s concepts, ‘creative destruction’,
points to this discontinuity and it might be applied not only to the
structure of production, but also to the structure of knowledge” (p. 8)
Towards a Theory (4): Innovation as a
Cumulative Process (d)
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Emphasis on the cumulative character of innovation:
blurred distinctions between invention, innovation
and diffusion
“Nevertheless, we will put some emphasis upon the ubiquitous and
cumulative character of innovation. In such a perspective the
distinction made in innovation theory, between invention, innovation,
and diffusion, as three separate stages necessarily becomes blurred”
(p. 8)
Innovation is understood as a process:
“We also understand why it is difficult to date invention and innovation
in time, and why an innovation does not stay the same throughout its
diffusion. Innovation appears now, not primarily as a single event, but
rather as a process” (pp. 8-9)
Towards a Theory (5): Innovation as a
Cumulative Process (e)
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The importance of “collective entrepreneurship” visà-vis “individual entrepreneurship”:
“A second starting point is that interactive learning and collective
entrepreneurship are fundamental to the process of innovation. …In a
sense, through introducing systems of innovation we pursue this
trajectory further from individual towards collective entrepreneurship”
(p. 9)
Learning is an interactive process: learning
sometimes induces innovation
“We will argue that most important forms of learning may
fundamentally be regarded as interactive processes, and that together
the economic structure and the institutional set-up form the framework
for, and strongly affect, processes of interactive learning, sometimes
resulting in innovations” (p. 9)
Towards a Theory (6): Learning and the
Structure of Production (a)
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The interdependence of S&T: the institutional
innovation of R&D labs in the context of big firms
“One of the most important institutional innovations in the last century
was the establishment of R&D laboratories in the big private firms
(Freeman, 1982, …). Scientific activities and technical change …
become increasingly interdependent activities” (p. 9)
Not every input into innovation emanates from R&D:
“However, we will insist upon the fact that not all important inputs to
the process of innovation emanate from science and R&D efforts. …The
everyday experiences of workers, production engineers, and sales
representatives influence the agenda determining the direction of
innovative efforts, and they produce knowledge and insights forming
crucial inputs to the process of innovation” (p. 9)
Towards a Theory (7): Learning and the
Structure of Production (b)
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Everyday experience impacts technology: learningby-doing, learning-by-using, and learning-byinteracting
“Everyday experience also increases technical knowledge and gives
ideas about in which direction solutions should be looked for. Such
activities involve learning-by-doing, increasing the efficiency of
production processes (Arrow, 1962), learning-by-using, increasing the
efficiency of the use of complex systems (Rosenberg, 1982), and
learning-by-interacting, involving users and producers in an interaction
resulting in product innovations (Lundvall, 1988)” (p. 9)
Innovation must be based in the structure of a
(national) economy:
“If innovation reflects learning, and if learning partially emanates from
routine activities, innovation must be rooted in the prevailing economic
structure” (p. 9)
Towards a Theory (8): Learning and the
Institutional Set-Up (a)
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In addition to the “normative dimension”: the
institutional set-up defines the second dimension for
national systems of innovation
“The institutional set-up (of a specific firm, a constellation of firms, or a
nation) is the second important dimension of the system of innovation”
(p. 10)
Stability in an uncertain world, represents one of the
functions of institutions:
“Institutions make it possible for economic systems to survive and act
in an uncertain world. …One of the fundamental characteristics of
institutions is their relative stability over time” (p. 10)
Towards a Theory (9): Learning and the
Institutional Set-Up (b)
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“Technological trajectories” and “paradigms” may be
conceptualized as a special sub-set of institutions:
“In this context, we may regard technological trajectories and
paradigms, which focus the innovative activities of scientists, engineers,
and technicians, as one special kind of institution” (p. 10)
Towards a Theory (10): Product
Innovation and User-Producer Interaction
(a)
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A focus on product innovations and their
roots in producer-user relations:
“One way to illustrate … innovation is to focus upon product
innovations, and their roots in the interaction between
producers and users” (p. 10)
(1) At micro-level the production structure
defines user-producer relationships:
“… at the micro level, the structure of production defines sets of
user-producer relationships, which condition the scope and
direction of the process of innovation” (p. 10)
Towards a Theory (11): Product
Innovation and User-Producer Interaction
(b)
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(2) Institutions reflect characteristics of the
innovation process:
“… the institutional form which characterises these relationships – and,
especially, the elements of organisation in these markets – reflects the
characteristics of the process of innovation” (p. 10)
(3) Institutional set-ups influence innovation:
“… the institutional set-up, once established, will affect the rate and
direction of innovation” (p. 10)
(4) User-producer relationships and distances in
cultural and geographical space:
“… one interesting dimension of user-producer relationships can be
shown to be distance [proximity] in cultural and geographical space”
(p. 10)
Towards a Theory (12): Product
Innovation and User-Producer Interaction
(c)
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Production system and the institutional set-up define
a system of innovation:
“… we illustrate how the production structure, and the institutional setup jointly define a system of innovation and at the same time provide
an understanding
of the micro-foundation of ‘national systems of innovation’” (p. 10)
Towards a Theory (13): Learning,
Searching and Exploring (a)
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Searching creates inputs for the system of
innovation: conditions, under which organizations
search
“Searching is another important activity, creating inputs to the system
of innovation. Organisations normally learning only from routine
activities of production and distribution might engage in search
activities under certain extreme circumstances. When the survival of
the organisation is threatened, it members become engaged in what
might be called ‘desperate search’” (p.11)
Searching by academic/science-oriented
organizations:
“Searching which takes place in academic or science-based
organisations, outside the private firms, brings forward another kind of
raw material for the process of innovation. We call this kind of search
‘exploring’” (p. 11)
Towards a Theory (14): Learning,
Searching and Exploring (b)
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“Searching” is more goal-oriented and profit-oriented
than “exploring”:
“The most important difference between exploring and searching is
that ‘exploring’ is less goal-oriented than profit-oriented search” (p. 11)
The weaker goal-orientation of exploring can produce
more radical (less foreseen) outcomes, which may
lead to new technological paradigms
“Exploring will, because of its weaker goal-orientation, sometimes
result in outcomes, neither foreseen, nor looked for, by profit-oriented
organisations. This adds to technological change, a dimension of
dynamism and radical change, extremely important in the long run.
Exploring will sometimes result in breaks in cumulative paths and
create the basis for new technological paradigms” (p. 11)
Towards a Theory (15): Incremental
versus Radical Innovations (a)
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Distinctions between incremental and radical
innovations may be referred to the technical
(technological) and economic dimension:
“When distinguishing between incremental and radical innovations, we
may refer, primarily, either to the technical or economic dimension” (p.
12)
(1) Incremental technical innovation, major
importance for the economy:
“Some innovations, incremental in technical terms, may have a crucial
impact upon the economy. This will be true for a small technical change
solving a bottleneck problem of strategical importance” (p. 12)
Towards a Theory (16): Incremental
versus Radical Innovations (b)
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(2) Radical technical innovation, minor importance for
the economy:
“On the other hand, an innovation very radical in technical terms, and
signalling a new technological paradigm, might be for technical reasons
premature and have a very limited impact on the economy” (p. 12)
(3) Radical innovation in one or two dimensions
(technical dimension and/or economic dimension):
“It follows that many radical innovations will be radical only in one of
the two dimensions while remaining incremental in the other
dimension” (p. 12)
Towards a Theory (17): Incremental
versus Radical Innovations (c)
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Innovation is neither totally independent nor totally
determined by the economic structure and the
institutional setting – trajectories of technological
development will always display a certain degree of
randomness:
“For these reasons, we assume that the process of innovation is neither
totally accidental nor totally predetermined by the economic structure
and the institutional set-up. The analysis of systems of innovation helps
us to understand and explain, why technology develops in a certain
direction, and at a certain rate, but a strong element of randomness
will always remain” (p. 12)
Towards a Theory (18): Defining the NSI
– the Role of Theory and History (a)
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National systems of innovation can be defined in a
“more narrow” or in a “broader” sense:
“From what has been said, it follows that we may make a distinction
between a system of innovation in the narrow sense and a system of
innovation in the broad sense.” (p. 12)
Narrow definition of NSI: focuses on organizations
and institutions
“The narrow definition would include organisations and institutions
involved in searching and exploring – such as R&D departments,
technological institutes and universities” (p. 12)
Towards a Theory (19): Defining the NSI
– the Role of Theory and History (b)
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Broad definition of NSI: refers to economic structure
and the institutional set-up
“The broad definition which follows from the theoretical perspective
presented above includes all parts and aspects of the economic
structure and the institutional set-up affecting learning as well as
searching and exploring – the production system, the marketing system
and the system of finance present themselves as sub-systems in which
learning takes place” (p. 12)
Towards a Theory (20): Defining the NSI
– the Role of Theory and History (c)
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
Historical analysis and theoretical considerations can
determine what should be included in (or excluded
from) a national system of innovation:
“Determining in detail which sub-systems and social institutions should
be included, or excluded, in the analysis of the system is a task
involving historical analysis as well as theoretical considerations” (p.
12)
Towards a Theory (21): Defining the NSI
– the Role of Theory and History (d)
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
For different historical periods a national system of
innovation may consist of different components
(“elements”):
“In different historical periods different parts of the economic system,
or different inter-faces between sub-systems, may play a more or less
important role in the process of innovation. …Today, it seems as if the
crucial interfaces of systems of innovation have shifted again. Radical
innovations in information technology which are, themselves, sciencebased have put the focus upon the coupling of routine based learning
to searching and R&D” (pp. 12-13)
Towards a Theory (22): Defining the NSI
– the Role of Theory and History (e)
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A “linear model of technical change” would define
national systems of innovation much more narrow:
“Alternatively a ‘linear model of technical change’ – where technical
innovations were assumed to follow mechanically from scientific efforts
and from research efforts inside firms – would define the system of
innovation much more narrowly and identify it with the R&D system”
(p. 13)
Different theoretical considerations illuminate
different aspects of the national systems of
innovation:
“However, the theoretical perspective is also important. …It also follows
that we cannot insist upon one single approach to the national system
of innovation as the only legitimate one. Different theoretical
perspectives bring forward different aspects of the system” (p.13)
The Elements of the System (1)
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National systems differ:
“The focus upon national systems reflects the fact that national
economies differ regarding the structure of the production system and
regarding the general institutional set-up” (p. 13)
The Elements of the System (2)
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Important areas for research: (p. 13)

“Internal organisation of firms”;

“Interfirm relationships”;

“Role of the public sector”;

“Institutional set-up of the financial sector”;
and “R&D intensity and R&D organisation”.
“Missing among these elements is the national education and training
system. For different reasons, this extremely important element of the
national system of innovation has not been given its proper treatment
in this book” (pp. 14-15)
Opening the System (1)
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The growing importance of “multinational” and
“transnational” innovation:
“As pointed out, we do not assume the process of innovation to be
exclusively localised inside national borders. On the contrary, we
recognise that the process of innovation has increasingly become
multinational and transnational reflecting, for example, R&D
cooperation between big firms based in different nations” (p. 15)
Opening the System (2)
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Conclusion (as a set of working hypotheses):
The concept of national systems of innovation
does not exclude other concepts, such as
regional/local systems of innovation and
global systems of innovation. What results is a
multi-level hierarchy of different innovation
systems that mutually influence each other.