LECTURE 6: THE INSTITUTIONAL ASPECT OF NSI by Dr. Olga Mikheeva, UCL Institute for Innovation and Public Purpose, UK & Dr. Manuel Gonzalo, Universidad Nacional de General Sarmiento, Brazil. CHAIR: Professor Joseph K.J., Gulati Institute of Finance and Taxation (GIFT), India

1. Long-waves, NSI & STI policy:
Freeman’s “broadening” contribution
from the Global South
Manuel Gonzalo
https://www.researchgate.net/profile/Manuel_Gonzalo2
Prodem-IDEI-UNGS / UNDEC / Redesist-IE-UFRJ
Globelics - Lalics

2. Reading Freeman
Let’s think in three of the most
relevant neo-schumpeterian
contributions…:
1. Technological systems /
Technological paradigms /
Techno-economic paradigms
2. NSI
3. Systemic STI policy

3. Structure of the presentation
1. Reading Freeman
• Long-waves
• NSI
• STI policy
2. Reading Freeman from the south
• Dialoguing with Freeman from Latin America
• A case for the Global South: The emergence of 5G in India and Brazil
3. Contemporary/future neoschumpeterian “blends”

4. The long-waves debate re-emergence during
the 70s / 80s: framing Freeman (and the SPRU)
With the crisis of Fordism, the emergence of the micro-processor and the
Japanese-Toyotist industrial challenge, the long-waves growth debate come back!
1. Mostly econometric works (focused on the duration/periodicity of the cycles):
• Kondratiev long cycles on production and relative prices
• Kuznets cycles emphasizing infrastructure investment
2. “Trend & Cycles” (empirical, historical & theoretical oriented)
• Schumpeter’s clusters of radical innovation
• Keynes, Kaldor, Kalecki: growth dynamic by lags between demand and investments /
accelerators & multipliers
• Freeman / Dosi / Carlota: broadening the schumpeterian cycles
• Minsky financial long-wave super-cycle
3. Inter-State competition (geopolitical) approaches: Braudel, Wallerstein,
Arrighi & the World System

5. Long-waves a la Freeman: from technological
systems to tecno-economic paradigms
• 1970s/1980s: discussion with Rosenberg from historical perspective, Mench depression-invention & Mandel from Marxism
/ dialogue with the keynesian on unemployment
• Freeman’s main line of research: broadening/correcting Schumpeter’s “cluster of innovation” / Kondratiev long-cycles and
discussing with the narrow R&D focus of the endogenous growth theory
• Methodological level: Reasoned history (Schumpeter) & “long-term way of thinking” (Bernal & Landes)
• Systemic innovation as a conceptual & empirical agenda
• Supply side innovation > demand side innovation > systemic innovation (SAPHO Project, Schmookler, etc.)
• Schumpeter I > Schumpeter II > Schumpeter III?
• The institutional level as a space of conflict
• Freeman et al (1982) category: “New technological systems” (same year of Dosi’s technological paradigms!)
• Relevance not only of the cluster of innovation, but on diffusion! “bandwagon effect”!
• Simultaneous growth of different interrelated industries: structural change!
• Where does the innovation comes from? Standards, institutional and legal settings, regulations, policies, etc. (NSI)
• It can be stable or with tensions: relevance of political struggle and institutional mediation
• “Autonomous investment” > Keynes
• Carlota / Dosi keep broadening and synthesizing
• “Key factors” / “common sense” / new best practice / infrastructure investment / metaparadigm
• Demand-side? Autonomous expenditures? Green growth? Mazzucato, etc.
• Divergence: inequal distribution of technology > leading countries and latecomers

6. Freeman & Perez (1988) / Freeman & Louçã (2001)

7. Freeman on NSIs: the List influence!
• NSI a la List: infrastructure + mental + material capital (but not only “emboidied technical
change”) / versus comparative advantage (the OECD 1982’s paper, published at Globelics Rio 2003)
• Relevance of non-price factors of competitiveness (Kaldor)
• There are sectors, but there are Nations! Strong technical leader countries (not possible to adjust by
exchange rate industrial policy…)
• NSI: national level institutions for capabilities and innovation creation and diffusion (Lundvall,
Johnson…)
• Diffusion (different works/books)
• Schumpeterian competition (1997 conference)
• Networks of innovation (1991 paper)
• Freeman on the Japanese NSI (then Lastres PhD Thesis): reasoned history on NSI (Freeman 1995)
• Versus Techno-globalism… but methodological nationalism? (1995 paper)
• Tensions: Multinational firms, globalization (dialogue with Chesnais) / then NSI & GVC (Lundvall)
• Different levels: Continental, national and sub-national innovation systems (2002)
• NSI in comparative perspective: British, Japan, URSS, Korea, Latin America
• Interstate competition: recognizing the relevance of military and defense sector for NSI

8. Broad & systemic understandying of STI Policy
• Potential and limits of STI policy: Freeman was an illuminist, he believe in science, but he
recognized that there are several economic/social issues that are not solved with STI policy!
• STI policy (as development) is influenced and interacts with other policies: fiscal, industrial,
financing, trade policies & so on
• “Coupling mechanisms”: the institutional (and sectorial) challenge of linkages!
• Much more tan R&D: institutional, organizational and social factors of “competitiveness”!
• Not only of invention & innovation but also diffusion policies (even more for the Global South)!
• Role and insertion of multinational enterprises
• Infant and teenage industries:
• New firms support in the early cycles - Schumpeter I
• Intrapreneurship & M&A in Schumpeter II
• Role & type of insertion of multinational enterprises: diffusion
• Introducing missions / societal challenges

9. Summing up:
Freeman’s “broadening” mission/contribution
• From the narrow/lineal R&D focus (endogenous growth theory) >
historical, institutional and conflictive understanding of innovation,
stating initial dialogues with the keynesean literature on growth
(followed by Carlota and Dosi)
• From the science push / demand pull STI policy debate > broad &
systemic approach to STI policy
• From mere cliometrics/econometric approaches > reasoned history
• From Schumpeter I & II > Schumpeter III

10. Reading Freeman… from the South

11. Dialoguing with Freeman from Latin America
• Argentina: Freeman dialogues and friendship with Amílcar Herrera, Jorge Katz in
Argentina: the ITDT seminar in 1969 /Chudnosky, Yoguel, López
• Brazil: The UNICAMP books and the seminar of 1982 / the Globelics (2003) article of
1982 / Lastres PhD Thesis on Japan / IE-UFRJ
• Latin America: several papers specifically devoted on Freeman: Arocena and Sutz
(2015), Lastres and Cassiolato (2017), Velho (2010), Lalics Works and seminars, etc.
• On long-waves: Prebisch-Furtado center - periphery (Caio Prado, Aldo Ferrer,
Schwarzer) / Ignacio Rangel “techno-economic paradigms” and dual modes of
development / Carlota Pérez / Conceicao Tavares on trend and cycles
• On NSI: the broad line of research of Redesist, particularly deepening on the BRICS
NSIs and technological frontiers / Sutz & Dutrenit on societal challenges
• STI policy: Amílcar Herrera on explicit and implicit policies / Sabato’s triangle as an
antecedent of the systemic approach / Varsavsky stiles of development / Not only
“embodied technical change” > Modernization > Katz!

12. A case for the Global South:
The emergence of 5G in India and Brazil
• 5G as a new phase of the IT techno-economic paradigm?
• USA and China in a global dispute mainly some “key factors”: 1) infrastructure
(optical fiber), 2) semiconductors and 3) telecom equipment
• As it is a global dispute both China and the USA are looking to penetrate in the
Global South 5G emergence: technological and national security implications
• The political economy of 5G emergence in the Global South
• India: national champions (Jio Reliance) in Alliance with the US big tech.
• Brazil: Chinese and the agribusiness groups vs. the US and Bolsonaro’s family
• Which is the role of the State and the NSI? How to achieve a peripheral
development with development of local capabilities (autonomy)? Is this
possible? Or we should opt for peripheral realism? Which type of policies?

13. The contemporary/future neoschumpeterian
“blends”
• Reasoned history: which blends? where to publish…?
• NSI & geopolitics… beyond methodological nationalism: supranational, national and
regional IS - USA, China & the Global South
• Demand-led growth & neo-schumpeterian dialogue: from autonomous investment to
autonomous expenditures (austerity as an enemy even for creative destruction)
• NSI & financing! Developing financing, financing missions, State-owned banking…
• Institutions as collective muscle for growth (not naive neither west-biased approaches!)
• Global South dialogue
• Role of multinationals, multilateral organisms & capital flows
• Focus on external restriction / foreign exchange limitations
• Mission oriented policy: A mix of high tech with diffusion
• South – South cooperation!
• Diasporas & STI policy
• The relation between State policymaking & NSI: Political economy of STI and NSI

14. Thank you!
Manuel Gonzalo
gonzalo.manolo@Gmail.com
https://www.researchgate.net/profile/Manuel_Gonzalo2
Prodem-IDEI-UNGS / UNDEC / Redesist-IE-UFRJ
Globelics - Lalics