The term innovation system has become widely used by scholars from different disciplines and by
policy makers from all parts of the world. This chapter presents the national innovation system as a
‘new combination’ that has evolved and been reinvented by connecting it to new fields of theory and
empirical research by scholars operating in disparate fields of enquiry. We start by referring to
the very first contributions that made use of the concept – Freeman (1982) who emphasized the link
between innovation and international trade and Lundvall (1985) who emphasized network formation and
interactive learning at the national level. We use these quite disparate, but complementary,
contributions to discuss some of the future paths of evolution of the concept. At the end of the
chapter we relate the two original contributions to the literature on global value chains and we
argue that combining the understanding of interactive learning and national innovation systems with
the global value chain perspective is one way to reestablish the critical potential of the original
ideas that became diluted in connection with the wide diffusion of the concept. We also argue that
combining the innovation system and the value chain perspective is useful when it comes to
developing a more satisfactory understanding of how countries can evade the poverty trap and the
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