Dynamic innovation systems: Do services have a role to play?

Johan Hauknes

No 199812, STEP Report series from The STEP Group, Studies in technology, innovation and economic policy

Abstract: Concepts of innovation systems have attracted considerable interest over the last decade. These ideas have rapidly become the focus of policy discourse and formulation. The ultimate aim of innovation system approaches is that endogenising innovation performance may be achieved through understanding the structural environment of firms and the systemic interactions between innovative efforts of the firm and its environment. The thesis underlying this paper is that this can only be attained with endogenising the structure of innovation systems. A fully dynamic understanding of systemic innovation and economic growth requires an integration of innovation performance and evolving innovation systems. It is suggested in this paper that the interaction between innovation and the development of complex divisions of labour affords an avenue towards such understanding, opening for a fuller understanding of structural change in economic and innovation systems. This avenue opens also up for a richer description of various types of services and their interaction with other sectors. The second half of the paper outlines briefly aspects of the role and development of some broad types of services; distribution, financial, business and consumer services, and their relations to other sectors of national economies.

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