ABSTRACT
The theoretical consideration which developed in the first chapter of this book argues that innovation is a strategic and reflexive process. This has an important effect on the way in which public policy is defined in analytical terms. Strategic reflexive theory maintains that innovators operate in a largely unstructured, uncertain and rapidly changing environment. They operate strategically in order to position themselves in relation to competitors and customers, and they operate reflexively by anticipating the results of their own actions in the market. This means that an innovation has been negotiated internally within the firm and that it has involved external partners, and the consumers in the market place. However, innovations should not be understood as a mere aggregation of these individually negotiated decisions. They are partly the result of a collectively organised context where such negotiations are undertaken. In other words, innovations are socially and institutionally embedded within a given context, and this context is partly shaped by a set of public actions.
