Innovation at the National Level

Abstract This article introduces the reader to the evolution of the concept of innovation systems at the national level. National Innovation systems (NIS) are variously defined as a system for generating and diffusing new technologies or, or as a tool to identify key linkages in the system of technical institutions and other organizations to create and manage innovation. Government support and area of technological focus are two components that contribute to the effectiveness of a national innovation system but they are not a sufficient explanation for high performing systems. Examples of other factors contributing to a nation's innovation are its level of education, its ability to commercialize innovation, and its overall social and cultural climate. NIS policy studies aim to describe and compare the most important institutions, organizations, activities, and interactions of public and private actors that take part in or influence the innovation process of a country. NIS thinking has led to a structurally different view of how government can stimulate the innovation performance of a country. It shifts focus away from labor and wages and draws policy makers' attention to “getting the institutional environment right.”