National Innovation Systems - OECD

1 NationalInnovationSystemsORGANISATION FOR economic CO-OPERATION AND DEVELOPMENTORGANISATION FOR economic CO-OPERATIONAND DEVELOPMENTP ursuant to Article 1 of the Convention signed in Paris on 14th December 1960,and which came into force on 30th September 1961, the Organisation for economic Co-operation and Development (OECD) shall promote policies designed: to achieve the highest sustainable economic growth and employment and arising standard of living in Member countries, while maintaining financialstability, and thus to contribute to the development of the world economy; to contribute to sound economic expansion in Member as well as non-membercountries in the process of economic development; and to contribute to the expansion of world trade on a multilateral,non-discriminatory basis in accordance with international original Member countries of the OECD are Austria, Belgium, Canada,Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg,the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, theUnited Kingdom and the United States.

2 The following countries became Memberssubsequently through accession at the dates indicated hereafter: Japan(28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand(29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995),Hungary (7th May 1996), Poland (22nd November 1996) and the Republic of Korea(12th December 1996). The Commission of the European Communities takes part in thework of the OECD (Article 13 of the OECD Convention). OECD 1997 Permission to reproduce a portion of this work for non-commercial purposes or classroom useshould be obtained through Centre Fran ais d Exploitation du Droit de Copie (CFC),3, rue Hautefeuille, 75006 Paris, France, for every country except the United States.

3 In the UnitedStates permissions should be obtained through the Copyright Clearance Centre, Inc. (CCC). Allother applications for permission to reproduce or translate all or part of this book should be madeto OECD Publications, 2, rue Andr -Pascal, 75775 Paris Cedex 16, approaches are giving new insight into innovative and economicperformance in the OECD countries. Technology-related analysis hastraditionally focused on inputs (such as research expenditures) and outputs(such as patents). But the interactions among the actors involved in technologydevelopment are as important as investments in research and they are key to translating the inputs into outputs.

4 The study of nationalinnovation Systems directs attention to the linkages or web of interaction withinthe overall Innovation understanding of these Systems can help policy makers developapproaches for enhancing innovative performance in the knowledge-basedeconomies of today. The smooth operation of Innovation Systems depends onthe fluidity of knowledge flows among enterprises, universities and researchinstitutions. Both tacit knowledge, or know-how exchanged through informalchannels, and codified knowledge, or information codified in publications,patents and other sources, are important. The mechanisms for knowledge flowsinclude joint industry research, public/private sector partnerships, technologydiffusion and movement of best practices for both the knowledge-based economy andnational Innovation Systems is a focal point of OECD work in the field ofscience, technology and industry.

5 This publication discusses the first phase ofthe work on National Innovation Systems and the attempt to develop indicatorsto map knowledge flows. Current work is focused on measuring institutionallinkages, human resource flows, industrial clusters and innovative firmbehaviour. This publication is part of the work of the Committee for Scientificand Technological Policy and is derestricted on the responsibility of theSecretary-General of the OF CONTENTSSUMMARY .. Rationale ..11C. Policy relevance ..13 KNOWLEDGE FLOWS IN National Innovation Joint industry activities ..7B. Public/private interactions ..9C. Technology diffusion.

6 15D. Personnel mobility ..18 ANALYTICAL APPROACHES TO National Innovation Cluster interactions ..26C. International knowledge flows .. Policy implications ..41B. Measurement issues ..42C. Future National Innovation Systems approach stresses that the flows oftechnology and information among people, enterprises and institutions arekey to the innovative process. Innovation and technology development are theresult of a complex set of relationships among actors in the system , whichincludes enterprises, universities and government research institutes. Forpolicy-makers, an understanding of the National Innovation system can helpidentify leverage points for enhancing innovative performance and overallcompetitiveness.

7 It can assist in pinpointing mismatches within the system ,both among institutions and in relation to government policies, which canthwart technology development and Innovation . Policies which seek toimprove networking among the actors and institutions in the system and whichaim at enhancing the innovative capacity of firms, particularly their ability toidentify and absorb technologies, are most valuable in this measurement and assessment of National Innovation Systems hascentred on four types of knowledge or information flows: 1) interactionsamong enterprises, primarily joint research activities and other technicalcollaborations.

8 2) interactions among enterprises, universities and publicresearch institutes, including joint research, co-patenting, co-publications andmore informal linkages; 3) diffusion of knowledge and technology toenterprises, including industry adoption rates for new technologies anddiffusion through machinery and equipment; and 4) personnel mobility,focusing on the movement of technical personnel within and between thepublic and private sectors. Attempts to link these flows to firm performanceshow that high levels of technical collaboration, technology diffusion andpersonnel mobility contribute to the improved innovative capacity ofenterprises in terms of products, patents and are many different approaches to analysing National innovationsystems.

9 Firm-level Innovation surveys question enterprises on their sources ofknowledge most relevant to Innovation and allow a ranking of differentlinkages by industrial sector and country. Cluster analysis focuses on theinteractions between particular types of firms and sectors, which can be8grouped according to their technological and networking of knowledge flows can differ markedly from cluster to cluster andalso within countries specialised around different industrial clusters( forestry, chemicals). Innovation Systems can also be analysed at differentlevels: sub-regional, National , pan-regional and international.

10 While thenational level may be the most relevant due to the role of country-specificinteractions in creating a climate for Innovation , international technology flowsand collaborations are taking on growing research will focus on improving the indicators used to mapinteractions in National Innovation Systems as well as the linkages to theinnovative performance of firms and countries. These indicators are at an earlystage of development and do not approach the robustness of more conventionalmeasures such as R&D expenditures. A main goal is to improve thecomparability of studies across countries by encouraging those engaging inanalysis of Innovation Systems to focus first on measuring a core set ofknowledge flows using similar indicators.