Innovation, knowledge creation and systems of innovation

Abstract. The main objective of this paper is to provide greater understanding of the systems of innovation approach as a flexible and useful conceptual framework for spatial innovation analysis. It presents an effort to develop some missing links and to decrease the conceptual noise often present in the discussions on national innovation systems. The paper specifies elements and relations that seem to be essential to the conceptual core of the framework and argues that there is no a priori reason to emphasize the national over the subnational (regional) scale as an appropriate mode for analysis, irrespective of time and place. Localised input-output relations between the actors of the system, knowledge spillovers and their untraded interdependencies lie at the centre of the argument. The paper is organized as follows. It introduces the reader, first, to some basic elements and concepts that are central to understanding the approach. The characteristics of the innovation process are examined: its nature, sources and some of the factors shaping its development. Particular emphasis is laid on the role of knowledge creation and dissemination based on the fundamental distinction between codified and tacit forms. These concepts recur throughout the paper and particularly in discussions on the nature and specifications of the systems approach. The paper concludes by summarizing some of the major findings of the discussion and pointing to some directions for future research activities.