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Summary Innovation systems: their benefits & weaknesses

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Innovation Systems

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Universiteit Utrecht (UU)

Within this document, innovation systems and the related concepts are discussed. In this way it contains all necessary information for this course.

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RESUME INNOVATION SYSTEMS
ARTICLE 1  Systemic instruments for systemic innovation problems: A
framework for policy makers and innovation scholars.
Introduction
Systemic instruments aim to address problems that arise at the innovation system levels,
which can be seen as systemic weaknesses or systemic failures.
This paper argues that the structural and functional analyses can be combined together and
provide analytical building blocks that helps to;
 Identify systemic problems
 Suggest systemic instruments to address the obstacles that are identified
The processes are categorized as functions of innovation systems (7).
This paper emphasizes the importance of the presence of actors, networks and institutions
and why structure is so important for explaining systemic problems.

2. Structural elements of innovation systems
2.1 structural elements in the literature
There have been a number of categorizations of innovation systems: national or regional
innovation systems (SISs  sectoral innovation systems, goes often beyond national
borders) and TISs  go beyond national borders, but is more specific in scope than SISs.
Narrow definition of the elements: organizations and institutions.
Broad definition: all the parts and aspects of an economic structure ant the institutional set
up.
Carlson and Stankiewics define a TIS as a social network composed of actors and
institutions (rules of game) constructed around a special technology.
It is a challenge to design a framework for the analysis of systems, identification of problems
and the design of policies. We address these issues in three ways;
 Narrow our focus to TISs
 We propose that the structural analysis of a system is based on mapping its
elements and evaluating their capacity to stimulate innovation rather than on
comparing different systems.
 We link structural analysis with the functional analysis
2.2 structural dimensions of a TIS
For analyzing TIS we therefore delineate categories of actors (individuals, organizations and
networks) based on their role in the economic activity, such as government and civil society.
Institutions can be seen as common habits, routines and shared concepts (soft) and rules,
norms and strategies (hard).
Interaction is difficult to consider as a structural elements, because it is dynamic. The focus
here is on relationships and they can be analyzed at the level of networks and of individual
contacts.
Infrastructure has per writer a different meaning. However, this paper proposes to consider
three categories of infrastructure: physical, financial and knowledge as structural
components of the innovation system.

3. Functions of innovation systems
3.1 functions in the literature
The seven system functions.
3.2 functions and structure
The functional approach is used to identify the so-called blocking mechanisms and to identify
emerging policy issues. The functions on their one are insufficient, because…
 Functions cannot be influences without altering a structural element
 If the functions are used as the sole basis for policy, then uncertainty emerges with
regard to the completeness of the identified list of blocking mechanisms and thus, of
the policy issues.

,Why a certain system function is absent or weak can be related to the structure of the
innovation system.

4. Systemic problems
4.2 problems versus structure
We attempt to define systemic problems. Actors, institutions and infrastructure can be easily
considered to be the components of the system. Interactions are relationship or links
between the components. If the innovation system does not function well, we can look at
whether it is because of the presence/absence of the structural elements or its properties.
The systemic problems can be conceptualized as relating to;
 The presence or capabilities of the actors
 The presence or quality of the institution set up
 The presence or quality of the interactions
 The presence or quality of the infrastructure
4.2.1 Actors’ problems
 Presence related: relevant actors may be absent
 Capacity related: actors may lack competence, capacity to learn or utilize
available resources; to identify and articulate their needs; and to develop
visions and strategies.
4.2.2 Institution problems
 Presence related: when specific institutions are absent
 Capacity related:
o Stringent institutional problems may result in the so-called
appropriability trap and favour incumbents
o Weak institutional problems may hinder innovation, for instance by
insufficiently supporting new technologies or developments.
4.2.3 Interaction problems
 Presence related: interactions are missing because of cognitive* distance
between actors, differing objective, assumptions, capacities, or lack of trust.
 Quality related:
o Strong network problems – fail to supply each other with the required
knowledge, this may be caused by…
 Myopia: internal orientation favouring the incumbent set-up and
relationships and thus blocking the necessity to open up to
external factors
 Over strong involvement of incumbent actors
 Lack of weak ties, valuable for breaking through an over strong
internal organization
 Dependence on dominating partners due to assets specificity
o Weak network problems
4.2.4. Infrastructural problems * = In de psychologie wordt met cognitie het
 Presence related when specific type of vermogen om kennis op te nemen en
infrastructure is absent verwerken bedoeld, maar ook zaken als
 Quality related when infrastructure is waarnemen, denken, taal, bewustzijn,
inadequate or malfunctioning geheugen, aandacht en concentratie.
Lock-in is an outcome of over strong interactions 
interaction/intensity problem
A lack of connection and compatibility between competencies  complementarity problems
 interaction/intensity problems or interaction/presence problems (no interaction at all)
Linkages within the system that are either too strong or too weak  network problems 
interaction/intensity problems
Malfunctioning of institutions or their insufficiency  institutional/capacity problems
4.3 Function, structure and systemic problems

, Once it is established whether or not the weakness of the function has something to do with
actors, institutions, interactions or infrastructure, one can further explore whether the problem
occurs because any of these are missing or there is a problem with their capacity.
4.4 Blocking mechanisms and systemic problems
Lack of actors and resources in the middle of the chain  actors/presence problem and
infrastructure/presence issue
Weak advocacy coalition  interaction/quality problem
Lack of integration of sub-elements of the system  interaction/presence problem
Lack of standards  absence of institutions
Lack of standard software  absence of infrastructure
Lack of competence/poorly articulated demand  actors/capatibilites problem
Inadequate knowledge  knowledge infrastructure/quality or presence issue.

5. Systemic instruments
5.1 Systemic instruments for systemic problems
Identification of the type of systemic problem should be a precondition for a selection of
strategies. Systemic policies should aim to achieve;
 Building and organizing innovation systems  ensuring the presence of the relevant
actors, institutions or infrastructure.
Actors  organizing the participation of relevant actors
Institutions  stimulating the presence of hard and soft institutions
Infrastructure  stimulating physical, financial and knowledge infrastructure
 Providing a platform for learning and experimenting  address problems with actors’
capabilities related to learning about new technological options
 Providing an infrastructure for strategic intelligence and stimulating demand
articulation  links with two types of issues: the capacity aspect of infrastructural
problems and actors’ capacity problems
 Management of interfaces  A way to stimulate the interactions within the system
 Developing strategy and vision  developing actors’ capabilities
Systemic instruments should focus on one or more of the following eight goals.
1. Stimulate and organize the participation of various actors
2. Create space for actors’ capability development
3. Stimulate the occurrence of interaction among heterogeneous actors
4. Prevent ties that are either too strong or too weak
5. Secure the presence of institutions
6. Prevent institutions being too weak or too stringent
7. Stimulate the physical, financial and knowledge infrastructure
8. Ensure that the quality of the infrastructure is adequate
5.2 Goals versus functions
The difference between the functions of innovation systems and the above goals;
Functions  descriptive and providing an analytical tool
Goals  prescriptive and supporting policy design

6. A systemic policy framework proposal
The functions are analyzed through the
perspective of the structural elements. Such
analysis leads to a very precise identification of
the factors that block specific functions. Systemic
instruments can create opportunities for system
development by influencing those elements and
connections within the system that would not
emerge spontaneously.
6.1 Application of the framework

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