A National Innovation System (NIS) refers to a framework comprising various distinct institutions that participate independently or collaboratively in the development and dissemination of new technologies. This framework enables governments to shape and implement policies that effectively influence the innovation process. In essence, an NIS includes organizations, the connections between them, and an institutional environment that defines the norms and interactions within the system. This institutional environment encompasses both formal and informal norms, such as shared habits, customs, agreed-upon procedures, rules, regulations, and common values, all of which provide the context for interactions between organizations within the NIS.
Main Functions of the National Innovation System
According to the Organization for Economic Cooperation and Development (OECD), the main functions of an NIS include:
- General Policy-making: Facilitating, guiding, and funding research and innovation.
- Conducting Research and Innovation: Developing human resources and promoting entrepreneurship.
- Disseminating Technology: Producing goods and services.
Characteristics of the Innovation System
A key concept in innovation studies is the systemic approach. This approach views innovation not just as a result of independent decision-making at the firm level, but as a complex interaction between the firm and its environment. In this approach, the importance of inter-firm linkages surpasses traditional market relationships. These interactions often involve continuous relationships that shape learning and technological development, encompassing broader factors such as social and cultural contexts, institutional and organizational frameworks, infrastructure, and firm behavior.
Innovation systems are social systems constructed by social actors and actions. They include a set of habits, experiences, and rules in which social actors participate. These systems are inherently dynamic and open to external interaction. When these systems are influenced by irreversible external factors and are locally specific, they become path-dependent. Innovation systems are thus strongly shaped by the historical socio-economic context.
National and Regional Innovation Systems
The concept of regional innovation systems emerged in the late 1990s alongside studies in fields like industrial economics, regional economics, and economic geography. In these areas, terms such as Marshall’s Industrial Districts, Pross’s Economic Spaces, Dahme’s Development Blocks, and Camagni’s Innovative Milieu have been used to explain regional innovation systems. A regional innovation system refers to a specific geographic area with a unique culture where the innovation system is established. It shares similarities with a national innovation system but is more socially driven, focusing on the conversion of scientific and technological advances into economic uses at the regional level.
The main difference between a regional and national innovation system lies in their scale. A regional innovation system is built around regional structures and institutions and reflects the development of knowledge and skills within the regional community. A national innovation system, on the other hand, involves a broader range of innovation actors, including public research institutions, academia, industry, and government at both local and central levels. The government plays a coordinating role among these research producers through policy documents, visions, and outlooks.
Importance of a Systemic Approach
The emphasis on a systemic approach in innovation is crucial because technological innovation today requires extensive resources and involves significant risks, which no single technology actor can effectively manage alone. To facilitate technological innovation, innovation actors must closely collaborate based on a specific level of trust, which governments must actively promote. Adopting a systems approach, such as the concept of an NIS, is a good solution for enhancing trust among innovation actors.
A robust NIS should consist of a critical mass of innovation actors, with industry or manufacturing companies being the most significant, as national competitiveness heavily depends on industrial competitiveness. Therefore, the ultimate goal of an NIS is to enhance the innovation capabilities of firms. This system is composed of both sectoral and regional innovation systems, which are essential for improving industrial and regional competitiveness through the interaction and qualitative information flow among key actors in a region or sector.
