The Innovation Systems Conceptual Approach

The Innovation Systems Conceptual Approach is used to study systems of innovation and to inform innovation policy making. This approach grew out of the field of innovation studies in the 1980s. It's widely used by a number of organizations such as the OECD, the European Union, the World Bank, the IMF and other UN agencies and by individual countries such as Finland, Sweden, Canada, New Zealand, UK, and China. Finland was the first country to use this national innovation systems approach in 1992. Sweden also embraced this approach in a fairly significant way with a Systems of Innovation Authority, a government department dedicated to studying innovation using this perspective.

There are two variations to this approach. The first variation is using it as a descriptive tool, listing the institutions and organizations that contribute to the development and diffusion of new technologies. The second variation is to use it as a focusing device, identifying all the factors that influence the development, diffusion and use of innovations and allowing for the analysis of the nature and intensity of the linkages. After identifying the weaker parts of the system, one would be able to prescribe corrections to strengthen these areas primarily based on comparison with other economies of a similar (or slightly higher) level of innovative and economic development.

In the initial descriptive dimension, we have a clearer and more methodical understanding of the system and in the prescriptive dimension; we are able to generate policy recommendations for government and related agencies. 

The Innovation Systems Conceptual Approach  recognizes that innovations can be the center of focus, attention, and analysis. It recognizes that individuals, firms, and economies can further enhance their economic growth through the generation and the diffusion of innovations. Innovation is central to the whole idea of economic competitiveness. It includes, but it is broader than, the R&D system alone. Innovations can be non-scientific and non-technological and develop from non-economic factors such as institutions, politics, and culture. This approach is concerned with history and recognizes path dependency and the evolutionary nature of innovations.

For instance, Japan is a very advanced economy but people there are still more comfortable using fax machines as compared to emails. This is an example of past dependency. Apparently, many Japanese people feel that email can be hacked into, can be written by anyone, they're more anonymous and much more impersonal as compared to a hand-written fax. Japanese society as a whole is reluctant to let go of this older technology.

Institutions and organizations develop over time and the mindset of the individuals within an economy influence the degree to which innovations occur. Process innovations are not always based on S&T. This approach also emphasizes that business firms are influenced by not only codified materials such as laws, regulations, and technical standards but also cultural norms, preferences and social rule.
from Coursera course, Science and Technology and Society in China. Week 3. by Naubahar Sharif, The Hong Kong University of Science and Technology