National Innovation Systems (NIS)
The concept of Innovation - transformation of ideas into products or services - is gathering greater attention throughout the world, especially in the Asia-Pacific region by the policy-makers and SMEs. There has been wider recognition that innovation enables countries to successfully participate in and benefit from the process of globalization (market, technology, economy, etc.) and the emerging era of knowledge-based economy. National systems that facilitate, nurture and promote innovation also contribute to the sustainable economic growth and entrepreneurship.
The term ‘National Innovation System’ was first used by Christopher Freeman in his book ‘Innovation in Japan’ in 1987. While there are several definitions of NIS there is no single universally accepted definition. One definition is, ‘ NIS is a set of distinct institutions which jointly and individually contribute to the development and diffusion of new technologies, and which provide the framework within which governments form and implement policies to influence the innovation process’. The various elements of NIS would be Government policies, research and development organizations, the education system, the financial support system and others.
A few definitions of NIS are:
- “…the elements and relationships which interact in the production, diffusion and use of new, economically useful knowledge … and are either located within or rooted inside the borders of a nation state” Lundwall 1992
- “… a set of institutions where interactions determine the innovative performance…of national firms” Nelson1993
- “… the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies…” Freeman 1987
- “… the national institutions, their incentive structures and their competencies, that determine the rate and direction of technological learning (or the value and composition of change generating activities) in a country.” Patel and Pavitt
- “… that set of distinct institutions which jointly and individually contribute to the development and diffusion of new technologies and which provide the framework within which governments form and implement policies to influence the innovation process. As such it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artifacts which define new technologies.” Metcalfe 1995
Dynamics of NIS is also very important. Continuous improvements are a must for all innovation related activities. Without continuous improvement even the most striking innovation strategy will become uncompetitive in due course of time. And without innovation, any effort to improvement in a knowledge-based economy may end up at a dead-end. There is a great deal of innovative work behind continuous improvements and NIS framers require a firm understanding of the changing situation and make continuous modifications in the NIS.
Various elements of NIS would be Government policies, Research and Development organizations, education system, the financial support system and others.
According to a study by OECD, the concept of National Innovation Systems rests on the premise that understanding the linkages amongst the actors involved in the innovation process is key to improving technology performance. The innovative performance of a country depends to a large extent on how these actors relate to each other as elements of collective system of knowledge creation and use, as well as the technologies they use. (http://www.oecd.org)