ABSTRACT
This chapter explores the concept of innovation and entrepreneurship and the link between the two concepts, investigates the concept of the systems of innovation commencing with exploring the historical roots of innovation systems. In the process of innovation firms interact with other organizations, such as other firms but also universities, research institutes, investment banks, schools and government ministries. At the core of modern thinking about innovation processes, scholars attempt to describe, explain, understand and potentially influence the structure and dynamics of the systems of innovation. It is the new approach for the study of innovation in the economy which argues that innovation processes are influenced by many factors as well as the interactions between those factors. Most of the characteristics of the systems of innovation that are examined in the chapter relates and depends upon the ease and effective communication, channels of knowledge, information and skills transmission between and within organizations and the other actors in the innovation system.
