Innovation and institutional change: the transition to a sustainable ...

22 Chapter 2
of alternative views of outsiders. “Closure in technology involves the
stabilization of an artifact and the ‘disappearance’ of problems” (Pinch and
Bijker, 1987: 44). It refers to actors developing belief systems that are
aligned to the components, principles and design of the technological
system. Examples are the belief that the electricity system is a case of natural
monopoly, and the belief that central electricity generation is superior to
decentral forms of generation (Hirsh, 1999; Verbong, 2000; Hofman and
Marquart, 2001).
Strong points of the large technical system approach are the way it is able to
unravel core coordinating mechanisms and guiding principles within
emerging systems and the way their emergence and application co-evolved
with political and institutional processes. Hughes’ focus is however foremost
on the way large technical systems expand and gain momentum, and much
less on the way systems may be fundamentally changed, transformed, or
replaced.
National systems of innovation approach
The large technical systems approach focuses more on interaction processes
within technological systems than on broader processes of societal and
institutional change that influence and interact with patterns of change in
technical systems. The national systems of innovation (NSI) approach is
more concerned with the way specific institutional set-ups influence patterns
of innovation throughout the economy. As interactive learning is perceived
as crucial in innovative processes one of the foci to what extent the
institutional set-up facilitates this, especially through processes where
interaction between various actors is essential to realise exchange, transfer
and use of knowledge (Freeman, 1987; Lundvall, 1988; 1992, 2002; Nelson,
1993). Freeman pointed out the importance of institutional factors in his
study of Japan as a then fast rising industrial power, and stressed the
importance of the strong government-business relationships and of
managerial and organisational forms such as the just-in-time concept
(Freeman, 1987). Crucial for the success of Japan’s economic growth has
been the ability to organise, mobilise, and direct efforts of a range of actors
such as industries, research institutes, educational organisations and financial
institutes along strategic visions set out by government in interaction with
research institutes and industries (Freeman, 1988). Lundvall stressed the
importance of interactive learning, for example between users and producers
(1988), and focused on elements such as trust (and the formal institutions
behind it) and mechanisms of exchange of tacit knowledge (based on skills,
experience, and routines) in innovation processes (1992, 2002). Nelson has
also shifted from an evolutionary to a more co-evolutionaray approach and
emphasised the importance of “institutional structures in supporting and