Institutions for Economic Development
Chapter 2: Systems of Innovation and Economic Development
The idea that institutions, organizations, and policies are endogenous to the economic system, and thus can help explain economic development as well as economic stagnation, is not new. It appears in the new institutional economics, game theory, systems dynamics, and economic and business history, to name a few currents (Aoki, 2007; Chandler, 1962, 1977; Williamson, 1985). Evolutionary and institutional economics adopted it, from Veblen in the late nineteenth century to such theorists as March and Simon (1993), Nelson and Winter (1982), Hodgson (1993, 1999), Lazonick (1994), Nelson (2005a), and Witt (1993). Within this perspective, the systems-of-innovation approach appeared in the late 1980s and unfolded into a major current. This chapter describes three levels of systems of innovation – national, regional, and sectoral – and traces the history of government intervention in business from industrial policy to technology policy. 2.1 SYSTEMS OF INNOVATION: NATIONAL, REGIONAL, AND SECTORAL National Systems In the late 1980s, Christopher Freeman (1987, 1988), Bengt-Ake Lundvall (1988, 1992), and Richard Nelson (1988, 1993) launched the concept of national systems of innovation. They were including in it the central institutions of technology – mores, organizations, policies, and routines – in the economies of advanced industrial nations. Their definitions were not identical, and other definitions emerged later, as we see in Box 2.1. All these definitions designate institutions as endogenous elements of the system, look at institutions within nation-states, and link the system to the economic and technological performance of the private sector and the entire economy. Nelson (1993), Niosi (2000b, 2002), and others...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.