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This chapter examines the key characteristics of innovation systems that stem from variations in how economic actors develop and diffuse innovations, and how these combine to form six distinct ideal types. How these six types of innovation systems are likely to become established in particular kinds of institutional regimes governing economic activities is discussed. The institutional conditions that can be expected to produce distinctive national innovation systems are then considered. It is argued that coherent and distinctive kinds of innovation systems only become established when strong and complementary institutions develop at transnational, national, or regional levels. In the case of the EU, this implies that the relative weakness, and often contradictory nature, of many European institutions and policies are likely to limit their impact on well-established national patterns of innovative activity and the development of a transnational European system of innovation.

This introductory chapter focuses on the co-evolution of science, technology, and innovation policy and industrial structure in Norway. It develops an evolutionary and historically oriented approach to the study of the development of science, technology, and innovation policy that may have wide applicability. Moreover, it focuses on a particular type of innovation — innovation in resource-based activities — that differs in many respects from the more commonly studied ‘high-tech’ case and which arguably be of relevance for many other countries (not the least in the developing part of the world). Finally, the chapter emphasizes the roles played by institutions and politics in innovation. Arguably, previous work on national systems of innovation has often devoted little attention to these matters, possibly because much of it examines ‘snapshots’ of various innovation systems at a specific point in time and lacks historical depth.

This chapter argues that the state, broadly construed, helps to construct corporate technological capabilities. Thus, the business-state interaction in the process of technological innovation must be a focus of business history research. Key concepts from social science research on national innovation systems are introduced and it is shown how they mesh with central tenets of recent work in business history. The chapter then advances four ways of thinking about the state — as organization, fisc, system of rules, and normative order — that lead toward potentially fruitful areas for historical research. This research agenda may lead the field toward an ‘interorganizational synthesis’ that builds on and enriches the best of contemporary business history.

This introductory chapter gives an outline of the book. It develops the theoretical framework by combining insights from classical trade theory, the market-based view of strategic management studies, theories on national innovation systems, and the literature on varieties of capitalism. Interestingly, all these strands of the competitiveness literature agree in their expectation that firms within the same economy will respond to increasing competitive pressure by exploiting the comparative advantages of national institutions as they specialize in the facilitated competitive strategies. The chapter then presents the analytical approach and illustrates why a comparison of pharmaceutical firms in Germany, Italy, and the UK is particularly helpful for understanding how firms cope with increasing competitiveness. Since an initial comparison casts doubt on the specialization theory of the competitiveness literature, the chapter introduces the research question addressed throughout the book: how can firms compete despite comparative institutional disadvantages? It concludes with an overview of the findings obtained on functional institutional equivalents and links them back to theoretical debates on regional networks, strategic management views, and entrepreneurial creativity.

This chapter first considers challenges to the ‘Japanese (productionist) model’ in the 1990s, particularly successful emulation of features of the Japanese model by competitors, and the emergence of new competitive models by specialized firms adopting modularization. Concern about these challenges and responses fed into the MOT (management of technology) movement at the turn of the century. The authors discuss the MOT Consortium, University-Industry-Policy Maker Summits, and monozukuri (productionist) initiatives, which seek to reshape the Japanese innovation system. They note that even fads can produce lasting and unanticipated change, as seen in the US quality movement of the 1980s. This discussion sets the stage for the following chapters, which are then summarized individually.

This chapter studies the efforts of Pemex, the Mexican oil corporation, to develop effective information systems over the past four decades. The information systems innovation processes are discussed in association with the broader struggles for reform in Pemex. To make sense of the significance attached to information systems innovation in the organization, the difficulties faced, and controversies that arise, this case study describes the links of Pemex with its national context, the international oil industry, and the international financial and political institutions. The analysis shows that the information systems innovation efforts in this company have reflected the struggle over its complex role: simultaneously an actor in a competitive market and the most significant asset for the country’s socio-economic development. Information systems innovation, aligned with the managerial efforts which increasingly saw the company as a free-market-driven business organization, was often in conflict with the powerful alternative rationality of its national role.

This chapter focuses especially on the innovation system of aquaculture of salmon and trout in Norway. It describes the sector in a national and global context, and highlights innovation strategies by aquaculture firms according to knowledge base and characteristics of the organizations. The empirical material presented in this chapter shows that aquaculture firms have very different approaches to innovation; from anti-innovation strategies to strategies of being in the forefront of innovation in the sector, showing how firms with very different innovation systems exists side-by-side in one sector. The overall functioning of the sectoral innovation system of aquaculture is influenced by all the different layers of firm types, suggesting a diverse policy approach in order to strengthen the sectoral innovation system — a sector with the potential to become even more knowledge intensive and innovative than today.

Discusses the issue of the changing boundaries of system integration competencies between different actors. The argument is made that many complex, knowledge‐intensive innovations are not only systemic in the sense of requiring many components and interactions, but they must also be analysed as a situation where final demand requires a bundling of goods and services. Demand therefore must be analysed as an integrated set of goods and services. A multi‐sectoral comparison is made, as the bundling of goods and services is visible in such diverse areas as building and construction, health care management, biotechnology, and telecommunication infrastructures.

This chapter examines a ten-year effort to reform the furniture manufacturing sector of Cyprus, according to the industrial model of flexible specialization. The reform initiative involved the setting up of information services and the development of information systems to strengthen the management of the furniture manufacturing SMEs and their consortia. However, little innovation took place and the whole reform experiment was abandoned in the mid-1990s. The analysis of the case examines how the theory of flexible specialization considered information systems innovation as a prerequisite of good management. It is argued that management and formal information processing and communication were alien and threatening to the owners of the small production firms, whose life values and entrepreneurial competencies could not be stretched to enable the promotion of export-oriented business.

This chapter attempts to tease out the implications of the individual chapters for the future of innovation and MOT in Japan, beginning with problems in the Japanese ‘knowledge-creating’ company model. The strengths of this model are also its weaknesses. In particular, Japanese companies have had difficulties in accessing external tacit knowledge and global knowledge networks. The emergence of a ‘dual innovation system’ is considered, which consists of a ‘reformed Japanese/large firm model’ and a ‘nascent network model’, both lying between closed and open innovation system model poles. Eight features of the former are identified. Policy, on the other hand, has become oriented toward promoting the latter, with limited success. Relations and tensions between the two are discussed.

This chapter traces the root of diversity confronting information systems innovation in the unfolding processes of globalization. It starts from the concept of globalization as the shrinking of time and distance, which directly implicates ICT. It then explores globalization as a multi-dimensional phenomenon comprising changes in economic, political, and cultural activities. While the extent to which the discernible trends in each of them increase or decrease diversity across the globe may be a matter of debate, it is shown that globalization is much more multifaceted than the notion of global competitive markets, to which information systems studies tend to be restricted, suggest. Taken together, the multiple facets of contemporary globalization reveal a much more variable organizational context. The extent of the variability is confirmed by a look at the current state of the global economy, which is grossly uneven.

This chapter extends the discussion into the area of security, which was thrust onto the policy and innovation system debate agenda in the wake of 9/11. It compares key features of the US and Japanese national innovation systems, and the respective roles of defence. Defence has played a relatively minor role in Japan's innovation system, but like civilian industry in the 1990s, Japan's defence industry failed to adapt to a dramatically changed (post Cold War) environment in the 1990s. In the new century, however, anzen-anshin (safety and security/peace of mind) concerns have the potential to influence both. The trajectory of influence is still fluid, but preference is given for a civilian-oriented security techno-system.

This chapter examines the concept of national innovation systems (NIS). It analyses why NIS is important. It discusses some of the institutions which can be considered to form the NIS: business firms, educational institutions, public sector research establishments, public policy, financial institutions, legal institutions, trade unions and political organizations, and ethos, culture and attitude towards entrepreneurship, and risk taking.

Many innovations arise spontaneously as a result of the market mechanism and the actions of capitalist firms, but some, especially the more radical ones, require public intervention. The first part of this chapter discusses when such policy interventions might be necessary and why. The next section discusses selectivity in innovation policy. The last (main) section of the chapter discusses the general and specific policy implications of the new ‘system of innovation’ (SI) approach; this studies innovations as an endogenous part of the economy and has emerged only in the last decade or so. An SI can be defined as encompassing all the important factors that influence the development, diffusion, and use of innovations, as well as the relations between these factors, which can be studied in a national, regional, or sectoral context.

This chapter analyses the role of technical-industrial research institutes for industrial innovation in Norway. Using statistical data and a survey among firms, it is shown that there are many different types of interaction between institutes and firms. In addition to R&D and technical services, the institutes are a significant source of skilled manpower for firms. Three central roles for the institutes are highlighted: they are a learning partner for industry, they help increase absorptive capacity, and they constitute a flexible repository in the innovation system by helping firms in peak periods and by reducing the pressure on universities through assisting in teaching and supervision.

This chapter applies the results from the previous chapter to analyze innovation systems. From Chapter 8 it adopts the analysis of learning by interaction and associated forms of co-ordination. The basic idea here is that innovation arises from interaction between firms. From Chapter 9 it adopts the cycle of discovery, and the elaboration in terms of scripts from Chapter 10. This extends existing life-cycle theories of innovation. From Chapter 11 it adopts the corresponding cycle of integration and disintegration. An attempt is made to identify ‘generic types’ of innovation system. Two types reflect differences between ‘Anglo-Saxon’ and other systems, in Japan and continental Europe, with the possible alternative of a ‘third way’.

This chapter discusses the role of public policy in creating a new path in the Norwegian economy. It argues that the policy to support industrial R&D from the 1960s was part of a strategy to establish a R&D intensive industrialization. This was the main motivation for the introduction of a public policy for industrial research, and as long as this policy was accepted there was to be a long-term growth in public support for industrial R&D. When path creation was no longer a central part of policy making, the industrial research based strategy collapsed. This is seen as a factor behind the relatively low R&D intensity in the Norwegian economy compared to other Nordic countries like Sweden and Finland.