ABSTRACT
The importance of context embedded non-firm organizations (NFOs) in the innovation process has been particularly stressed in the literature of both national and sectoral systems of innovations. This chapter discusses that “the relationship between countries’ international performance and sectoral systems may be mediated by national institutions and non-firm organizations that form national systems of innovation and production”. In short, the notion of Sectoral system brings important suggestions to theoreticians and policymakers. From a theoretical point of view it draws attention to the institutional variety that underlies the development of similar sectors in different national systems of innovation. The theory of innovative business enterprise suggests taking a closer look at the social conditions strategic, financial and organizational related to the institutions under which innovative outcomes occur. In reality, products and processes require the organizational, hierarchical, functional and strategic integration of people with different hierarchies and functional specialties into the learning process.
