Innovation systems and their contribution to understanding innovation and economic growth

The concept of Innovation System has been used since the late 1980s to analyze innovation and economic growth at various levels. National innovation systems focus primarily on national institutions that support knowledge creation and learning as the basis for innovation. Other systems focus on innovation at regional or sectoral levels. Technological innovation systems are micro-based, focusing on dynamic networks of individual actors, especially entrepreneurs, interacting in specific areas of economic activity and on knowledge creation and knowledge flows that give rise to new business opportunities. Much of the work on innovation systems in the 1990s and 2000s was largely descriptive, examining institutional infrastructure at the national level. More recently the concept has been used more as a tool to analyze knowledge flows, innovation, and growth in various sectors such as renewable energy, telecommunications, software, and biotechnology. Innovation systems analysis has also been applied at the firm level. In addition, the role of spillovers (unintended knowledge flows) and technology transfers (deliberate knowledge sharing) and their contribution to economic growth have been analyzed.