Innovation by Dodgson Mark; Gann David;

Author:Dodgson, Mark; Gann, David;
Language: eng
Format: epub
Publisher: Oxford University Press
Published: 2010-04-16T04:00:00+00:00

Systems

The incredible success of Japanese industry in the 1970s and 1980s led to a search for its explanation. One analysis argued that it resulted from Japan’s ability to organize the various elements of its economy into a national innovation system. In this view, the Japanese government played a central role coordinating large corporations’ investments in important and emerging areas of industrial technology. Japan’s strength in consumer electronics, for example, was believed to have resulted from the country’s highly effective Ministry of International Trade and Industry (MITI) collecting information from around the world on new technologies and organizing the efforts of large electronics firms, such as Toshiba and Matsushita, to take advantage of new opportunities. The ability of the Japanese government to do this was exaggerated, but it did play an influential role and researchers began to think about the contributions to innovation made by national institutions and characteristics and the ways they combined into a system. The search was on to try and understand the role of the major players and the most important of their interactions and provide some capacity to encourage innovation at national level.

Early research into national innovation systems took two forms. One, primarily US in focus, took an economic and legal perspective and concentrated on the nation’s key institutions, including those of research, education, finance, and law. The characteristics of effective national innovation systems were seen to be high-quality research, providing new options for business; education systems that produced well-qualified graduates and technicians; the availability of capital for investments in risky projects and new and growing ventures; and strong legal protection of intellectual property. The other approach, primarily Scandinavian in focus, was concerned more with the quality of business relationships in a society. The characteristics of effective national innovation systems were seen to be close ties between customers and suppliers of innovation, influenced by the amount of trust between people and organizations in a society and the learning this engenders.

These approaches were initially developed by academics interested in analysing and understanding the reasons why innovation occurs, and why it takes particular forms. The question emerged, for example, of why some nations, such as the USA, are particularly strong in radical innovation – explained by its strength in basic research – and why others, such as Japan, are very strong at incremental innovation – explained by efficient coordination of information exchange between customers and suppliers. The idea of national innovation systems, however, quickly took hold in government and public policy circles, as a way of prescribing and planning how institutions and their relationships could be configured. International organizations, such as the OECD, have produced numerous reports on the institutions of various nations, but these tend to be highly descriptive and static, failing to explain how national systems evolve over time. They do make the valuable observation, however, that what matters is not only the institutions that exist in a nation, but how effectively they work together.

At the same time that research on national innovation systems was blossoming, some began to ask whether the nation was the most useful level of analysis.

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