Distributed Innovation Systems and Instituted Economic Processes

Abstract

There can be little doubt that the most significant recent development in the study of innovation has been the emergence of a ‘systems of innovation’ literature. Following Freeman’s (1987) first statement of the concept, a rich body of investigation has developed, shaping in turn the further development of ideas on innovation, the nature of the firm and the role and methods of science and technology policy. Our purpose in this chapter is twofold: to draw out what is systemic about the innovation systems approaches in the literature and to review a number of the various ways in which innovation systems have been approached. Our way of summarising these diverse and rich literatures is to claim that they are all contained within the idea of distributed innovation processes and that they are a consequence of the division of labour in the generation and application of practically useful knowledge. Division of labour is in turn related to specialization in the generation of complementary forms of knowledge accumulated by different processes in different organizational contexts. Specialization entails co-ordination of different knowledge generating activities which are valued for their complementary contributions to the innovation process, and leads to outcomes which depend upon the interrelatedness of the different kinds of knowledge. As soon as the innovation problem is posed in this way a systemic dimension emerges naturally.