ABSTRACT
McKelvey (1996) addresses the im port ance of crit ically discussing and analysing the simil ar ities and dif fer ences between the different definitions of NSI. The different versions of NSI share common theor et ical as sump tions, but there are clear discrepancies re gard ing how NSI are applied and how the empirical mater ial is examined, often representing different aspects of the same reality (McKelvey, 1991: 6). Following Lundvall’s (1992) tax onomy, the NSI definitions can be divided into narrow and broad definitions. Starting with Freeman’s definition from 1987 and ending with Edquist’s definition from 1997, it is easy to notice a change in the degree of broadness. Freeman’s definition is a more targeted one, with clear ref er ences to techno lo gical in nova tion, while Edquist’s definition is con sidered to be the broadest one, where the sys tem is including all societal and eco nomic factors. A common element all definitions share is their emphasis on the role of institutions. The majority of authors researching national sys tems of in nova tion emphasise the crucial role institutions play in innov at ive pro cesses (for example, Freeman, Lundvall, Nelson and Rosenberg, Carlsson and Stankiewics, to name but a few). However, despite its crucial role, the term “institution” is one of the concepts surrounded by ambiguity. Johnson et al. (2003) ac know ledge the term institution as being one of the elements adding to the prob lems and weaknesses associated with the in nova tion sys tem approach. The core of the NSI approach is to ana lyse how institutions and organ isa tions intersect to shape eco nomic growth and development. Institutions play a decisive role in long-term eco nomic de velopment and growth (North, 1990; Nilsson, 2008). A review of the definitions reveals a confusing way of using the terms “institution” and “organ iza tion”. The terms are often used in ter change ably, but there are also scholars that attempt to differentiate between the two terms (see Edquist and Johnson, 1997). Following North (1990), the NSI liter at ure differentiates between institutions, which are the rules of the game, and organ isa tions, which are the players. For example, Lundvall (1992) uses the term as meaning the rules of the game, while Nelson and Rosenberg (1993) ascribe it to different kinds of organ isa tions. Edquist and Johnson (1997) provide the fol low ing definition, which I con sider to be representative of the NSI approach: “Institutions are sets of common habits, norms, routines, estab lished practices, rules, or laws that regulate the relations and inter action between indi viduals, groups, and organ isa tions” (in Edquist, 2005).
