6 Edition: National Systems of Innovation and Entrepreneurship

Innovation Management and
New Product Development

6th edition
Chapter 2
National systems of innovation
and entrepreneurship
Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Figure 2.1
The role of the state in innovation
How national states can facilitate
innovation
• The state has played a central role in producing game-
changing breakthroughs.
• An obscure government body even lent Apple $500,000 before
it went public.
• The armed forces pioneered the internet, GPS positioning and
voice-activated “virtual assistants”.
• Academic scientists in publicly funded universities and labs
developed the touchscreen and the HTML language.
• Google’s search algorithm was financed by a grant from the
• National Science Foundation.
• America’s National Institutes of Health finances studies that
lead to many of the most revolutionary new drugs.
The state is necessary for innovation because:
1.The ‘public’ nature of knowledge that underpins

innovation.
2.The uncertainty that often hinders the process of
innovation.
3.The need for certain kinds of complementary assets.
4.The need for cooperation and governance, resulting from
the nature of certain technologies.
5.Politics.
Figure 2.3
Kondratieff waves of growth and their
main features
Source: Reproduced and adapted from Dicken, P. (1998) Global Shift: Transforming the World Economy, Paul Chapman, London (a Sage Publications company); Freeman, C. and
Soete, L. (1997) The Economics of Industrial Innovation, 3rd edn, Pinter, London (Cengage Learning Services Ltd).
Source: Regional Innovation Scoreboard (2014).
Note: The innovation Union Scoreboard analyses the innovation system of EU Member States through a set of 25 indicators broken down into eight dimensions looking at human
resources, research systems, finance and support, firm investments, linkages and entrepreneurship, intellectual assets, innovators and economic effects. In the resulting summary
innovation index EU Member States are classified into four groups, based on their average innovation performances: ‘Innovation leaders’ have an innovation performance well above
that of the EU average, ‘Innovation followers’ group comprises countries whose performance is above or close to that of the EU average, ‘Moderate innovators’ have a performance
below that of the EU average, and the last group covers ‘Modest innovators’ whose performance is well below that of the EU average.
Source: Innovation Union Scoreboard (2014).
Figure 2.6
EU performance compared to main
global competitors
Entrepreneurship
In today’s world it is best captured:
According to Schumpeter economic development is the
result of three types of factors (Schumpeter, 1964, 61):
1.external factors such as demand by government (changes
in legislation, defence orders);
2.factors of growth or gradual changes in economic life

which are accomplished through day-to-day activities and
adjustments;
3.“the outstanding fact in the economic history of capitalist

society,” innovation.
And for Schumpeter, entrepreneurs are galvanised into
action under the following conditions (Schumpeter,
1961: 214):
•The existence of new possibilities more advantageous from
the private standpoint – a necessary condition;
•Limited access to these possibilities because of personal

qualifications and external circumstances;
•An economic situation which allows tolerably reliable

calculations.
Table 2.2
Definition of entrepreneurship
Source: Stevenson (2000).
Innovation policy
Innovation policy has generally focused on four key

objectives:
1.The generation of new knowledge.
2.Making government investment in innovation more effective.
3.Enhancing diffusion of knowledge and technology (network

interaction effects).
4.Establishing the right incentives to stimulate private sector

innovation to transform knowledge into commercial success.
Entrepreneurship policies
• Concentrate on developing an environment to foster

the emergence of new entrepreneurs and new firms.
• Yet there has been limited recognition of the full

integration of entrepreneurship and innovation.
• Unfortunately, all too often innovation policies do not

incorporate entrepreneurship as a focus.
• Yet we know that entrepreneurs are essential to

convert knowledge into economic and social
benefits.
Figure 2.7
The narrowing of wage rates in China
and Mexico
Source: Bank of America Merrill Lynch Global Research, Banxico, INEGI, International Labor Organizations, National Bureau of Statistics of China own estimates for China since 2009
and for Mexico in 2013.

6 Edition: National Systems of Innovation and Entrepreneurship

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

6 Edition: National Systems of Innovation and Entrepreneurship

Uploaded by

Copyright:

Available Formats

Innovation Management and

New Product Development

1.The ‘public’ nature of knowledge that underpins

In today’s world it is best captured:

2.factors of growth or gradual changes in economic life

3.“the outstanding fact in the economic history of capitalist

•Limited access to these possibilities because of personal

•An economic situation which allows tolerably reliable

Source: Stevenson (2000).

Innovation policy has generally focused on four key

1.The generation of new knowledge.

2.Making government investment in innovation more effective.

3.Enhancing diffusion of knowledge and technology (network

4.Establishing the right incentives to stimulate private sector

• Concentrate on developing an environment to foster

• Yet there has been limited recognition of the full

• Unfortunately, all too often innovation policies do not

• Yet we know that entrepreneurs are essential to

You might also like