ABSTRACT
The notion of national innovation systems (NISs) is now gaining attention as a framework to conceptualise the development of innovative capability and its support of productive activities. Elements of the approach can be traced to Frederich List's (1885) arguments in support of industrial policy to create dynamic comparative advantage. Dynamic national innovation systems have helped nations transform comparative and competitive advantages (Gerschenkron 1962; Kaldor 1979; Porter 1990). Adopting a broad definition of technology which includes qualitative and intangible attributes, pioneering works in this field have deliberately left the concept's empirical boundaries open, with various agents (including firms and organisations) potentially interacting and playing mutually supportive roles in developing nations' productive capacities (Lundvall 1985; Freeman 1987; Nelson 1985; Dosi 1984). Innovation, also broadly defined, includes both rare pathbreaking inventions and the commonly recorded introduction of manufacturing designs and processes, including minor improvements, that are new to a firm, if not to the world. Firms typically move from acquiring existing technologies, often through import from abroad, through stages of adapting and developing to finally innovating new processes and designs. Thus, involvement in research and development (R&D) comes at the end of a sequential learning process (pavitt 1984). The potential capacity of a national innovation system to stimulate innovations will depend on the development of technology-supporting organisations and their effective co-ordination with firms. Proponents of NISs make the Schumpeterian assumption that firms actively and strategically shape the technology frontier, and therefore differ from the Marshallian view that firms operate as passive recipients of serendipitous technology breakthroughs.
