The concept of the innovation system stresses that the flow of technology and information among people, enterprises and institutions is key to an innovative process. It contains the interaction between the actors who are needed in order to turn an idea into a process, product or service on the market. Wikipedia:A national system of innovation has been defined as follows: “ .. the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies.” (Freeman, 1987) “ .. the elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge ... and are either located within or rooted inside the borders of a nation state.” (Lundvall, 1992) “... a set of institutions whose interactions determine the innovative performance ... of national firms.” (Nelson, 1993) “ .. the national institutions, their incentive structures and their competencies, that determine the rate and direction of technological learning (or the volume and composition of change generating activities) in a country.” (Patel and Pavitt, 1994) “.. 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.” (Metcalfe, 1995)“.. a human social network that behaves like a sociobiological system, wherein people have developed patterns of behavior that minimize transaction costs caused by social barriers resulting from geography, lack of trust, differences in language and culture, and inefficient social networks.” (Hwang and Horowitt, 2012)
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Provision of Research and Development (R&D), creating new knowledge, primarily in engineering, medicine, and the natural sciences. Managemen Press. Kindle Edition.
Competence building (provision of education and training, creation of human capital, production and reproduction of skills, individual learning) in the labor force to be used in innovation and R&D activities. Fagerberg,Kindle Edition.
Articulation of quality requirements emanating from the demand side with regard to new products.
Creating and changing organizations needed for the development of new Welds of innovation, e.g. enhancing entrepreneurship to create new firms and intrapreneurship to diversify existing firms, creating new research organizations, policy agencies, etc. Fagerberg, Jan; MKindle Edition.
Networking through markets and other mechanisms, including interactive learning between different organizations (potentially) involved in the innovation processes. This implies integrating new knowledge elements developed in different spheres of the SI and coming from outside with elements already available in the innovating firms. Fagerberg, Jan; .; NelKindle Editi
Creating and changing institutions—e.g. IPR laws, tax laws, environment and safety regulations, R&D investment routines, etc—that inXuence innovating organizations and innovation processes by providing incentives or obstacles to innovation. FaC.; Nelson, RichaKindle Edition.
Incubating activities, e.g. providing access to facilities, administrative support, etc. for new innovative efforts.
Financing of innovation processes and other activities that can facilitate commercialization of knowledge and its adoption.
Provision of consultancy services of relevance for innovation processes, e.g. technology transfer, commercial information, and legal advice. F NelsonKindle Edition.
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