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Technological innovation system


The technological innovation system is a concept developed within the scientific field of innovation studies which serves to explain the nature and rate of technological change. A Technological Innovation System can be defined as Ďa dynamic network of agents interacting in a specific economic/industrial area under a particular institutional infrastructure and involved in the generation, diffusion, and utilization of technologyí.

The concept of a technological innovation system was introduced as part of a wider theoretical school, called the innovation system approach. The central idea behind this approach is that determinants of technological change are not (only) to be found in individual firms or in research institutes, but (also) in a broad societal structure in which firms, as well as knowledge institutes, are embedded. Since the 1980s, innovation system studies have pointed out the influence of societal structures on technological change, and indirectly on long-term economic growth, within nations, sectors or technological fields.

Firstly, the Technological Innovation System concept emphasizes that stimulating knowledge flows is not sufficient to induce technological change and economic performance. There is a need to exploit this knowledge in order to create new business opportunities. This stresses the importance of individuals as sources of innovation, something which is sometimes overseen in the, more macro-oriented, nationally or sectorally oriented innovation system approaches.

Actors: Actors involve organizations contributing to a technology, as a developer or adopter, or indirectly as a regulator, financier, etc. It is the actors of a Technological Innovation System that, through choices and actions, actually generate, diffuse and utilize technologies. The potential variety of relevant actors is enormous, ranging from private actors to public actors, and from technology developers to technology adopters. The development of a Technological Innovation System will depend on the interrelations between all these actors. For example, entrepreneurs are unlikely to start investing in their businesses if governments are unwilling to support them financially. Visa-verse, governments have no clue where financial support is necessary if entrepreneurs do not provide them with the information and the arguments they need to legitimate policy support.

Technological factors: Technological structures consist of artefacts and the technological infrastructures in which they are integrated. They also involve the techno-economic workings of such artefacts, including costs, safety, reliability. These features are crucial for understanding the feedback mechanisms between technological change and institutional change. For example, if R&D subsidy schemes supporting technology development should result in improvements with regard to the safety and reliability of applications, this would pave the way for more elaborate support schemes, including practical demonstrations. These may, in turn, benefit technological improvements even more. It should, however, be noted here that the importance of technological features has often been neglected by scholars.

Structures involve elements that are relatively stable over time. Nevertheless, for many technologies, especially newly emerging ones, these structures are not yet (fully) in place. For this reason, mostly, the scholars have recently enriched the literature on Technological Innovation Systems with studies that focus on the build-up of structures over time. The central idea of this approach is to consider all activities that contribute to the development, diffusion, and use of innovations as system functions. These system functions are to be understood as types of activities that influence the build-up of a Technological Innovation System. Each system function may be fulfilled in a variety of ways. The premise is that, in order to properly develop, the system should positively fulfil all system functions. Various lists of system functions have been constructed. Authors like Bergek et al., Hekkert et al., Negro and Suurs give useful overviews. These lists show much overlap and differences reside mostly in the particular way of clustering activities. An example of such a list is provided below.

F1. Entrepreneurial activities: The classic role of the entrepreneur is to translate knowledge into business opportunities, and eventually innovations. The entrepreneur does this by performing market-oriented experiments that establish change, both to the emerging technology and to the institutions that surround it. The Entrepreneurial Activities involve projects aimed to prove the usefulness of the emerging technology in a practical and/or commercial environment. Such projects typically take the form of experiments and demonstrations.

In this context, cumulative causation is the phenomenon that the build-up of a Technological Innovation System accelerates due to system functions interacting and reinforcing each other over time. For example, the successful realization of a research project, contributing to Knowledge Development, may result in high expectations, contributing to Guidance of the Search, among policy makers, which may, subsequently, trigger the start-up of a subsidy program, contributing to Resource Mobilization, which induces even more research activities: Knowledge Development, Guidance of the Search, etc. System functions may also reinforce each other ¨downwardsģ. In that case interactions result in conflicting developments or a vicious circle! Recently scholars have increasingly paid attention to the question of how cumulative causation may be established, often with a particular focus on the development of sustainable energy technologies.

Increase in acquisitions in our global business environment has pushed us to evaluate the key stake holders of acquisition very carefully before implementation. It is imperative for the acquirer to understand this relationship and apply it to its advantage. Retention is only possible when resources are exchanged and managed without affecting their independence.