The External Dimension of the European Research Area
Edited by Heiko Prange-Gstöhl
Chapter 6: Enabling Institutional Responses to Innovation in Latecomer Countries
6. Enabling institutional responses to innovation in latecomer countries1 Padmashree Gehl Sampath SYSTEM OF INNOVATION IN LATECOMER CONTEXTS The systems of innovation framework emerged as a response to conventional economic analyses of technological change, which underplayed the role of institutions as well as the evolutionary nature of technological change, stressing mainly the role of market incentives for the allocation of information in society. Critiquing the notions of conventional economics, two fundamental assumptions form the core of the systems approach. Firstly, innovation (as opposed to information or even knowledge) is the result of the interactions between firms and other organizations within a system, shaped by social, economic, political and historical dimensions. The inclusion of contextual, social and historical factors helps to understand innovation (and its determinants) as it is and as it occurs in most contexts: incremental in nature and boosted from within the system. Secondly, institutions are central to explaining innovative success. Institutions and organizations are routinely involved in the creation and dissemination of useful tacit and codified knowledge that needs to be applied to the production process and in creating an enabling learning environment.2 An enabling learning environment is one that promotes interactive learning, the process through which the diverse actors in both the public and private domains of the system communicate and collaborate for the creation, use and dissemination of new economic knowledge (Johnson and Lundvall 2003, p. 159). Within a given system, it is assumed that the learning capacity and the actions of any set/sets of actors...
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