Regional Innovation and Learning Systems, Clusters, and Local and Global Value Chains

Today, the concept of ‘Innovation Systems’ is widely used in discourse and policies to stimulate economic development through upgrading firms for enhanced competitiveness. Productivity increments are key to enhanced competitiveness, and innovation accounts for the overwhelming majority of productivity gains in most of the world’s leading economies. So creating and sustaining innovation is the key to improved competitiveness. Much of the early knowledge about these relationships derived from writers updating and correcting some of the crucial insights of Schumpeter (1975) on innovation and entrepreneurship. These new thinkers utilized the notion of the national economy as their canvas, seeking to understand if it retained force under conditions of globalization (Lundvall, 1992; Nelson, 1993) although subsequently the difficulty of limiting the scope of analysis in that way was recognized (Edquist, 1997). Hence the importance of sectoral and regional innovation systems was highlighted. With regard to sectoral systems, interesting if somewhat constrained use of the ‘system’ concept developed, as in the work of Teece (1988) and as ‘technological systems’ (Carlsson and Jacobsson, 1994). That firm-focused approach sought to show the detailed repercussions of an innovation upon the internal and external relations of the firm, its technology, skills-mix and marketing in the specific sector in question.