Innovative systems

From CEOpedia | Management online

Innovation systems is a concept that is putting pressure on enterprises, institutions and people to share and exchange their technology and information between them, in order to make an innovative process. Innovative process is a correlation of different factors that are turning an idea into a process, product or a service on the market. Innovation systems have been divided into :

  • National innovation systems
  • Regional innovation systems
  • Technological innovation systems
  • Sectoral innovation systems

National innovation system

National innovation system (NIS) is as defined by S.Metcalfe in 1995 as "… that set of distinct institutions which jointly and individually contribute to the development and diffusion of new technologies and which provides the framework within which governments form and implement policies to influence the innovation process. As such it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artefacts which define new technologies."

Effective and efficient operation of NIS depends on a few factors:

  • Political Factor - consist of legal and political solutions
  • Economical Factor - The influence of level of competitiveness or interest in cooperation by different companies
  • Social Factor - The historical past that have an influence on innovations ( Traditions, education system)
  • Technological factor - The development of the R&D sector, availability of technological knowledge
  • International factor - Shapes a relation of a innovative system with other systems and international cooperation of R&D.
There are several institutions that are responsible for supporting development and innovativity of NIS like
  • Organizations that are responsible for innovation policy - These organizations are responsible for developing and promoting innovation policy (training centres, information centres and innovation support centres).
  • Institutions involved In support and expansion of science and technology, they are the ones that are taking care of the right development of scientific and technical knowledge of the innovations (scientific and research institutes, universities)
  • Entities that are included in the industry and services are implementing innovative solutions

Regional Innovation System

Regional Innovation System (RIS) is a gathering of events, entities and interactions between various institutions that are affecting processes in the region. It is leading to further increase in absorption and diffusion of innovation in the region.

The Organisation for Economic Co-operation and Development (OECD) focuses on regional by publishing regular reports (for example territorial reviews) related issues and by supporting the best practices exchanges .By which they can assess the reviews for the regional innovation system and the make appropriate policies for the regions needs and strategic use of the regions resources of national and regional systems.

Technological innovation system

Technological innovation system could be defined as a "dynamic network of agents interacting in a specific economic or industrial area background involved in the generation and usage of technology. The components that a technological system consists of are called structures, they are relatively stable and are representing the rather static side of the system.

There are three basic categories
  • Actors - Actors involve organizations contributing to a technology. It is that actors of a Technological Innovation System by making choices, actually generate and utilize technologies. The potential variety of relevant actors is enormous, from private to public actors. The development of a Technological Innovation System will depend on correlations between actors and other entities that have influence on innovations like government.
  • Institutions - Institutional structures are very important in the innovation system, the two types of institutions; the formal institution being the rules that are enforced by authority (laws and policy) and informal institutions being that are more organically shaped by the influence of the actors.
  • Technological factors - In the technological structures we can see artefacts, the infrastructures which integrate them, and costs, safety, reliability. By reviewing these features we can understand the feedback from the difference between technological change and institutional change. Unfortunately the importance of technological features has often been neglected by the scholars.

Sectoral Innovation system

The Sectoral system of innovation and production became a new growing area of research in economics, It considers a wide range of factors that are crucial to innovations and pays centralized attention to examine innovation as a result of R&D firms and investments in products and production. It assesses the actors such as competitors, suppliers, users, universities etc. and what type of a institutions (standards, norms, regulations).
It has a really dynamic and fast-paced approach to innovation and indicates that although the actors and factors are similar to various systems the are different to each other. Not long ago it was thought that sectoral system was concerned to be in developed countries but nowadays this type of system is spreading more to different countries, because as we can see the innovation and diffusion has became more popular In developing countries as well.

Examples of Innovative systems

  • National Innovation Systems: National Innovation Systems are networks of actors, institutions and organizations that interact in order to bring innovation to a particular country. This includes activities such as research and development, technology transfer, venture capital, and the creation of incentives and regulatory frameworks. For example, in the United States, the National Science Foundation (NSF) is responsible for funding research and development activities, and the Small Business Innovation Research (SBIR) program provides grants to small businesses for innovative research and development projects.
  • Regional Innovation Systems: Regional Innovation Systems are networks of actors and institutions that are working together to promote innovation within a specific region. This includes activities such as technology transfer, venture capital, and the creation of incentives and regulatory frameworks. For example, in the United States, the Mid-Atlantic Regional Innovation Initiative (MARII) is a regional network that offers funding, technical assistance, and mentoring to small businesses in the Mid-Atlantic region.
  • Open Innovation Systems: Open Innovation Systems are networks of actors and institutions that are working together to share and exchange information and ideas in order to create new products and services. This includes activities such as crowdsourcing, open source software development, and open data initiatives. For example, the Open Innovation Network (OIN) is a global network of innovators that share information and ideas in order to create new products and services.
  • Social Innovation Systems: Social Innovation Systems are networks of actors and institutions that are working together to create innovative solutions to social and environmental challenges. This includes activities such as social entrepreneurship, impact investing, and the use of technology to create solutions. For example, the Unreasonable Institute is a global network of entrepreneurs that are working together to create solutions to global challenges such as poverty, health, and education.

Advantages of Innovative systems

A good innovation system can bring many benefits to companies, institutions, and individuals. The main advantages of such systems are:

  • Improved efficiency and effectiveness of R&D processes - Innovation systems help to speed up the process of developing new products, services or processes, as well as to reduce costs associated with research and development activities.
  • Enhanced collaboration between different stakeholders - Innovation systems promote collaboration between different parties by providing a platform for sharing and exchanging ideas. This can help to create new products and services, as well as to identify potential new customers.
  • Increased innovation - Innovation systems can provide access to new technologies and resources, which can help to generate new ideas and products. This can lead to increased innovation, which can result in improved competitive advantage for companies.
  • Improved customer satisfaction - Innovation systems can help to improve customer satisfaction by providing them with better products and services. This can help to build customer loyalty and boost sales.
  • Increased productivity - Innovation systems can help to increase the productivity of companies by providing them with better tools and resources to work with. This can lead to better performance and higher profits.

Limitations of Innovative systems

Innovation systems present certain limitations that can hinder the realization of an innovative process. These include:

  • Lack of resources: A lack of financial resources or personnel can limit the ability to create or maintain the necessary infrastructure to support an innovative system.
  • Lack of knowledge: People and organizations may not have the necessary knowledge or skills to effectively use the technology and information associated with an innovative system.
  • Lack of partnerships: Without the right partnerships, it can be difficult to create the necessary collaboration needed to develop a successful innovation system.
  • Lack of communication: Poor communication can prevent an innovative system from being successful, as it can create a disconnect between the different stakeholders involved in the system.
  • Lack of commitment: Without sufficient commitment and dedication from those involved in an innovative system, it can become difficult to achieve the desired goals and objectives.

Other approaches related to Innovative systems

The approaches related to innovation systems are:

  • Open Innovation: It is a process of integrating external ideas and resources into an organization’s innovation process. It encourages the organization to leverage ideas, knowledge and expertise from external sources (partners, suppliers, customers, etc.) to develop more innovative and successful products.
  • User Innovation: This approach focuses on the users’ potential to come up with creative solutions to solve their problems. It is based on the idea that users are playing an increasingly active role in the innovation process by providing feedback, creating new uses for existing products, and creating new products altogether.
  • Design Thinking: This approach is focused on understanding customer needs and creating innovative solutions for them. It is based on a collaborative approach that involves brainstorming, rapid prototyping, and testing ideas on the customer to see if they work.
  • Lean Innovation: This approach is focused on reducing the time to market for a new product or service. It involves streamlining the development process, focusing on customer feedback, and using data to make decisions.

These approaches are all related to innovation systems and they focus on leveraging external resources, involving users in the innovation process, understanding customer needs, and reducing the time to market for a new product or service. By applying these approaches, organizations can create a more efficient and effective innovation system.


Innovative systems — recommended articles
Centre of excellence — Social innovation — World Packaging Organisation — Measurement of innovation — Total Innovation Management — Educational innovations — Quality of public administration — Design capacity — Innovation platform

References

Author: Szymon Kotula

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