Systems of Innovation and Economic Theory

The volume of literature which emerged around innovation and systems of innovation in the 1980s and the first half of the 1990s held the promise of the emergence of an account of the general economy which could challenge the mainstream. The central argument of this paper is that the failure of that promise to materialise was due to the identification of neoclassical economics as the mainstream against which the system of innovation approach would be counterpoised, rather than neoliberal economics. While the former constitutes the disciplinary base of mainstream economics, the latter has formed its discourse. This paper looks at the contradictions between discipline and discourse in the mainstream and the relegation of the economic understanding of innovation to a peripheral area of study within economics.