Innovation systems: analytical and methodological issues

Innovation systems can be defined in a variety of ways: they can be national, regional, sectoral, or technological. They all involve the creation, diffusion, and use of knowledge. Systems consist of components, relationships among these, and their characteristics or attributes. The focus of this paper is on the analytical and methodological issues arising from various system concepts. There are three issues that stand out as problematic. First, what is the appropriate level of analysis for the purpose at hand? It matters, for example, whether we are interested in a certain technology, product, set of related products, a competence bloc, a particular cluster of activities or firms, or the science and technology base generally—and for what geographic area, as well as for what time period. The choice of components and system boundaries depends on this, as does the type of interaction among components to be analyzed. The attributes or features of the system components that come into focus also depend on the choice of level of analysis. The second and closely related issue is how to determine the population, i.e. delineate the system and identify the actors and/or components. What are the key relationships that need to be captured so that the important interaction takes place within the system rather than outside? The third issue is how to measure the performance of the system. What is to be measured, and how can performance be measured at the system level rather than at component level?