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

Theoretical perspectives 23
moulding efforts to advance technology” (Nelson, 2002: 265). The
understanding that institutional structures for the creation and application of
knowledge differ across nations is fundamental to the NSI approach. This
does not imply that they render sectoral patterns of interaction between
firms, suppliers and users, and internationalisation of knowledge generation
and industrial strategies irrelevant but that national styles of knowledge
generation, transfer, and application tend to have a more profound impact on
innovation patterns and their success. Moreover, the set-up and development
of institutional frameworks that enable and constrain interactions between
firms, interactions between firms and knowledge actors, and between science
and government, are considered to be still dominated by national settings.
This is illustrated in research on the nature of the interaction between science
and government and the way these bring forth particular research priorities,
directions, and programmes. In a comparison of these interactions in the
different national settings of the UK, Germany and the Netherlands, Van der
Meulen (1998) points at path dependence in the relationship between science
and government. The way interactions between science and government are
institutionalised has a strong influence on outcomes, implying, for example,
that the use and implementation of a new policy instrument (foresight in the
work of Van der Meulen) to explore promising research directions may
result in reproduction of ongoing strategy processes when it is not
accompanied by higher order institutional adaptation (Van der Meulen,
1998: 411). The nature of the institutional arrangement “structures the
strategies of actors within the implementation of new policy instruments”
(ibid.: 412).
Others point out that the nature of the way knowledge is generated,
distributed and applied is fundamentally changing in a process of coevolution
with societal change. Smits (2002: 862) argues that “shifts in the
context of innovation processes, more particularly the emergence of the
‘porous’ society, will lead to a radical transformation of innovation systems
in which (knowledge intensive) intermediaries and the quality of the
interface between users and producers play an increasingly important role”.
Related to this Smits and Kuhlmann (2004) explore the rise of, and need for,
‘systemic instruments’ in innovation processes. They identify several
functions that play an important role in current innovation processes: 1)
management of interfaces; 2) providing platforms for learning and
experimenting; 3) providing an infrastructure for strategic intelligence; 4)
stimulating demand articulation, strategy and vision development. Existing
policy instruments only fulfil part of the systemic functions, and further
development of systemic instruments is called for. This especially includes
strengthening of the intermediary infrastructure comprising of institutions,
mechanisms and organisations aimed at improving the interface and