Innovation, Growth and Social Cohesion

Innovation, Growth and Social Cohesion

The Danish Model

New Horizons in the Economics of Innovation series

Bengt-Åke Lundvall

Written by the scholar who, together with Chris Freeman, first introduced the concept of the innovation system, this book brings the literature an important step forward. Based upon extraordinarily rich empirical material, it shows how and why competence building and innovation are crucial for economic growth and competitiveness in the current era. It also provides a case study of a small, very successful European economy combining wealth creation with social cohesion.

Chapter 4: A National Innovation System?

Bengt-Åke Lundvall

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation, innovation policy


Here we will deal with the Danish innovation system as one of a number of national innovation systems. In the previous chapter we saw the close connection between an understanding of the innovation process as interactive and the development of the systemic approach. In this chapter we shall illuminate the degree to which one still can identify national innovation systems in a world characterized by gradually increasing globalization. The concept of a ‘national innovation system’ has roots that go far back (Freeman 1995a refers particularly to List 1841), but in its modern version it is relatively new. It was first used in Freeman (1987) and was further disseminated through Lundvall (1992) and Nelson (1993), among others. In 2000, nearly a decade after the concept was presented to an international audience, it has become a common analytical tool in such international organizations as the EU, UNCTAD and the OECD as well as in a number of countries. For example Finland, Ireland, Taiwan and Korea use it as the basis for the framing of national innovation policy strategies. Recently Sweden established a new central authority named the Authority for Innovation System Policy. The aim of the concept is to explain historical processes, and to establish a theoretical basis for policies related to economic growth. The old neoclassical theory of growth (Solow 1957) showed that a large part of actual economic growth could not be explained by growth in the production factors of labour and capital. This residual was named ‘technical progress’. The...

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