Supporting the innovative capabilities of individual firms are the local and national
institutional frameworks embodied in the notions of the national system of innovation
(NSI) (e.g. Nelson, 1993) and regional innovation system (RIS) (e.g. Braczyk et al.,
1998). To quote Metcalfe, (1997, pp. 461-462) a national or regional system of
innovation is ‘that set of distinct institutions which jointly and individually contribute
to the development and diffusion of new technologies and which provides the
framework within which governments form and implement policies to influence the
innovation process. As such it is a system of interconnected institutions to create,
store and transfer the knowledge, skills and artefacts which define new technology.
The element of nationality follows not only from the domain of technology policy but
from elements of shared language and culture which bind the system together, and
from the national focus of other policies laws and regulations which condition the
innovative environment'. Within an NSI or RIS, organisations fulfil three main
functions:
(a) Knowledge applying organisations including private firms, consultancies etc. seek
to identify market openings and translate knowledge into an explicit form to
address profitably these opportunities.
(b) Knowledge generating or sourcing institutions such as universities, research
institutes and government or industry research laboratories. Generally such
organisations have humanitarian or social objectives, are publicly funded, and
conduct their activities largely independently of immediate market needs or
requirements.
(c) Knowledge mediating or co-ordinating institutions - which seek to identify and
bring together knowledge applying and knowledge generating organisations. This
may be on a bespoke basis, e.g. by assisting firms to identify potential higher
education partners or vice-versa, or through the provision of network services by
professional societies, chambers of commerce etc. Typically such institutions are
publicly or collaboratively funded or not-for-profit organisations with either
national, regional or industry development objectives.