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 5: The Specialization of the Danish Innovation System

Bengt-Åke Lundvall

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


One essential aspect of a national innovation system is its specialization in relation to other national systems.1 This specialization reflects the types of activities that take place more intensely in Denmark than in other countries. There is a close connection between specialization patterns in production and specialization in the system’s knowledge foundation. On the one hand, a national economy will attract activities that utilize the specialized knowledge embodied in the workforce and in the regional networks within the country’s borders. On the other hand, the experiences made within a particular area of production will feed back into and strengthen the knowledge foundation in that area. This explains why specialization patterns in production and export change very slowly and why globalization has proven to be compatible with unchanged or even growing specialization between national economies (Archebugi and Pianta 1992). The specialization of the innovation system is particularly interesting for two reasons. Firstly, it gives a hint of what are the areas of strength and weakness within the economy. An innovation policy has to take this as its point of departure. Secondly, considerations have been voiced about the extent to which fundamental weaknesses exist in the Danish specialization pattern, weaknesses that could argue for the development of strategies intended to change the pattern (see Box 1.2) As we shall see, some of the weaknesses ascribed to the industrial structure are something Denmark shares with several other small highly developed countries (Andersen and Lundvall 1988; Freeman and Lundvall 1988). THE DANISH INDUSTRIAL STRUCTURE...

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