Hezron M. | Franco Malerba 19 Feb, 2:00 pm – 3:00 pm GMT ZOOM online LECTURE-7 DIFFERENT APPROACHES TO NATIONAL SYSTEMS OF INNOVATION by Dr. Hezron Makundi, University of Dar es Salaam, Tanzania CHAIR: Professor Franco Malerba, University of Bocconi, Milan

1. Chris Freeman Centenary Lecture
Series
Lecture 7.
Different Approaches to National Systems of Innovation
Chair:
Franco Malerba: CESPRI, Bocconi University
Speaker
Hezron Makundi
IDS- University of Dar es Salaam, STIPRO
Feb 19, 2021

2. Outline of the Lecture
• Introduction to the innovation Systems
• Sectoral Systems of Innovation
– Agricultural Innovation Systems
• Regional Innovation System
• The global Value Chains
• Summing up

3. The NSI
• A widely applied concept in studying innovation
• Offer a comprehensive analysis of Innovation as a
systemic process
• Well discussed in the previous lectures in this
series
• In this lecture: some complimentary approaches
to NSI

4. Innovation Systems Angles
• Geographical dynamics (Braczyk et al. 1998;
Ohmae 1995)
– Global systems of Innovation incl. the GVCs (e.g
Pietrobelli & Rabelloti 2011)
– Sub National or Regional systems of innovation
– Supra National systems (e.g Borrás , 2004)

5. …Alternatives
• Sectoral dynamics (Malerba 2002)
– Sector specific dynamics
– Characteristics of firms across sectors
• Technological dynamics (Carlsson 1995)
– Technological systems of Innovation

6. Common features
• National Systems, Sectoral Systems, Regional
Systems, Technological Systems
– Focus on innovation with emphasis on learning
– Complex, non-linear, interactive
– Ex-post historic analysis of knowledge production
& diffusion
– Holistic and inter-disciplinary approaches
– Complementarity, interdependence

7. Sectoral Systems of Innovation:
Theoretical basis
• Key theoretical domains (Malerba 2002)
– Change and transformation in sectors.
– Links and dependencies, Sectoral boundaries
– From the Innovation system approach, particularly the
NSI (Freeman and Soete 1994, Lundval 1993, Edquist
1997 etc.) –Previous Lectures
– Evolutionary theories (Nelson, 1995; Dosi, 1997;
Metcalfe, 1998, Malerba, Nelson Orsenigo and Winter,
2016)

8. Sectoral Systems of Innovation: Origin
• Change and transformations in sectors
– Schumpeter Mark II – Creative accumulation
(Entry barriers – e.g on semiconductors)
– Industry lifecycle (Utterback 1994, Klepper 1996)
– Technological regimes (Nelson & Winter 1982)
– Opportunity & appropriability conditions (Malerba
& Orsenigo 1997)

9. …Origin of SSI
• Links and dependencies, Sectoral boundaries
– Knowledge and technological domain of a given
sectoral system
– Boundaries: links and complementarities among
artefacts (e.g. a product or a technology) and
activities
– Boundaries are either static or dynamic

10. SSI: Knowledge & Technologies
• From evolutionary literature: firm-level knowledge is
highly idiosyncratic (absorbed by firms according to
accumulated abilities)
– Some sectors are more knowledge intensive
– Some sectors have more technological opportunities e.g
from universities (Rosenberg 1982)
– Variations in the cumulative nature of knowledge
• Sectors and technologies differ greatly in terms of
the knowledge base and learning processes related
to innovation (Malerba 2002, 2004)

11. Actors in SSI
• Including individuals, firms, and semi‐public or public
organizations
• Heterogeneous:– Multidisciplinary, with different
beliefs, expectations & competencies
• Their learning and innovation process etc.
• Actors interact through market and non-market
relations (Malerba 2004, 2016):
• Channels: communication, exchange, cooperation,
competition and command: shaped by institutions

12. …Actors in SSI
– Some sectors dominated by large firms e.g
automotive
– In some sectors such as Pharmaceuticals and
electronics, universities and R&D institutions are
very crucial. This is not the case in textile
– Some sectors attract specific type of actors (e.g
venture capitalists) more often than others
– Net suppliers of technology e.g. computers vs net
users of technology eg. Metalurgy (Malerba 2004).

13. SSI: Networks
• Links and interdependencies among related
industries which changes over time
• Include formal cooperation and informal
interactions
• User –supplier interactions and the role of
demand (Porter 1976)

14. SSI: Institutions
• Include norms, routines, common habits,
established practices, rules, laws, standards
• Include binding and non-binding and also
formal and informal institutions
• Some institutions are those also relevant to
the NSI while others may be sector-specific

15. Agricultural Innovation Systems
• Agricultural innovation studies evolution over
time (Klerkx et al 2012)
– Participatory Research and Participatory
Technology Development (Farrington and Martin
1988)
– Training and Visit System (Hulme 1992 )
– Agricultural technology transfers
– Diffusion of innovation (Rogers 1962)
– Influence of the linear model and emphasis on
improving the public R&D capabilities

16. AIS
• Agricultural Knowledge and Information
Systems (AKIS) (Röling 2009)
– Influenced by Kline & Rosenberg 1986
– Early attempt to link with innovation system
studies
• The Concept of AIS was influenced by the NSI
concept (Arnold and Bell 2001) –emphasis on
institutions
• AIS from research, while AKIS from extension

17. AIS
• Some key analytical Methods
– Institutional analysis: the influence of institutional
enablers and constraints to innovation systems
performance (Hall et al 2001)
– Social network analysis to map institutional
linkages
– Innovation histories or innovation journeys
– Benchmarking (R&D indicators etc.)
• As part of SSI: Less conceptualization,
emphasis on empirics

18. Localization of Innovation
• Innovation performance within countries is
not always homogeneous (e.g Bavaria versus
Saxony‐Anhalt in Germany)
• Conceptualization
– Industrial Districts (Marshall 1920)
– Clusters (Porter 1991)
– Regional Innovation Systems (Cooke 1992)
– learning region, innovation milieu, local
production systems (Doloreux & Parto, 2005)

19. Regional Systems of Innovation
• The role of Geography:
– Difficulties of exchanging tacit knowledge over
long distance (Polanyi 1958)
– Importance of Interactions in learning (Lundval
and Johnson 1994)
• Thus spatial proximity becomes key to an
effective production and transmission of
knowledge. (Asheim et al., 2003)

20. Regional systems
• Proximity benefits derived from localization
advantages, spatial concentration, local
norms (Asheim and Gertler, 2004)
• Examples : Silicon Valley, Emilia-Romagna,
Baden-Württemberg, Zhounguancun
etc.(Cooke and Morgan, 1998)
• NSI aspects applies to Regional systems.
Opportunities for deeper analysis (Schrempf)

21. Regional systems
• Success stories of some specialized industrial
agglomerations or regionally concentrated
networks of SMEs and industrial clusters
(Porter 1998)
• localized resources such as a specialized labor
market and labor force, subcontractor and
supplier systems, local traditions for co-
operations, entrepreneurial attitude, local
supporting agencies and organizations.

22. Technological systems of Innovation
• A network of agents interacting in the
economic/industrial area under a particular
institutional infrastructure and involved in the
generation, diffusion, and utilization of
technology” (Carlsson and Stankiewicz, 1991).

23. Technological systems of Innovation
• Pavit (1984), Marsilli (2001) : The taxonomy,
Technological paradigms
– Certain groups of technologies (from different
sectors) tend to share some common features
• This Is More an antecedent of Sectoral
Systems
– It examines Sectoral Patterns of Innovation
without considering Networks, Other Actors And
Institutions

24. Technological Systems
• Kondratiev Long wave, techno-economic
paradigms (Freeman and Perez 1988).
• Technological paradigms, trajectories and
regimes (Dossi 1982)
• Sustainability pathways: studies on socially &
environmentally desirable technologies. e.g
renewable energy & other green technologies
• The Multi-level perspective (Geels 2005)

25. The Global Value Chains and
Innovation Systems Nexus
• When the production or delivery of services is
broken into activities and tasks carried out in
different countries
• Firms (esp. MNCs) outsource activities and
keep only those they have core
competencies on.
• Backward and forward linkages at different
stages of the product chain

26. The GVC and Innovation Systems
• GVCs are associated with interactions,
capability building & upgrading of firms across
• Include standards to adhere, new or different
ways, breeds/seeds, equipment etc.
• Expanded market opportunities with more
revenue which can be re-invest in innovative
activities.

27. GVC and Innovation Systems
• GVC- Innovation System linkage (Pietrobelli &
Rabellotti 2011)
• GVC pays less attention to the institutional
context
• Institutions that affects the production and
productivity (National etc.) these include
metrology, standards and testing services
• Can reduce transaction costs, buyer-seller
information asymmetries and quality-related
uncertainties

28. GVC and Developing Economies
• Mitigating the captive relationships
• Upgrading of the local suppliers’ roles (i.e
primary to intermediate) also attract the value
adding FDI within an economy
• Improvements in the innovation systems to
reduce transactional costs
• Analysis of broader geographical and sectoral
aspects of innovation systems

29. Summing up
• Acknowledging the complementarity of the
various (systemic) approaches to innovation
studies
• The importance of defining boundaries while
conducting applying the various analytical
approaches (spatial, technologies,
• Considerations/adaptations to the context of
the south (example with R&D informality,
weak IP systems etc.)