System Definition

System consists of- Actors, Relationships, and Attributes

Relationship
Actor Actor

Attributes of an actor-
Its function in the system, objectives, rules and
regulation governing the actor etc.
 Measurement of the Performance

Definition of sector: Product or Technology

Identification of actors, their functions, and relationships

Evaluation

Quantitative indicators of innovation systems

 Definition of sector: Product or Technology

Technology might be used in several products and a product might be used by

several industries. For instance industrial robots are being used in automobile
and chemical firms whereas semiconductor technology is used in all electrical
and electronic products.

In either case the knowledge of the sector to the researcher is very important.
For instance in software sector there are two main components, namely;
system software, and application software. The rules of the game for both the
sectors vary.
 Identification of Actors and their Functions and Relationships

Actors are involved in five broad activities; namely, generation, transformation,

storage, diffusion, and users of knowledge. For example;
firms, industry associations, statistical offices, patent offices, public/private
research organisations, policy formulation organisations etc.
 Capabilities of Actors

Main features of the system are capabilities of actors to generate,

diffuse, and utilise knowledge/technologies. These are affected by
four types of capabilities.

Selective capability

Organisational ability

Functional ability

Learning or adoptive ability

 Selective Capability

The ability to make innovative choices of markets, products, technologies

including organisational technologies; to engage in entrepreneurial activity;
and to select key personnel and acquire key resources. The key question is:
Are we doing right thing? The important part of this capability is the notion
of absorptive capacity: the ability to scan and monitor relevant technological
and economic information; to identify technical and market opportunities, and
to acquire knowledge, information, and skills needed to develop
technologies (Carlsson et. al., 2002)
 Organisational Ability

This is the ability of middle level management in an organisation represented

by - to organise and coordinate resources and economic activities within the
organisation, to generate and improve technologies through new combinations
of existing knowledge and skills.

Functional Ability

This involves execution of various functions (at the organisation level or

at system level). This is related to: Are we doing things right?
 Learning or Adoptive Ability

The ability to learn from successes as well as failures, to identify and correct
mistakes, to read and interpret market signals and take appropriate actions, and
to diffuse technology throughout the system.
 Evaluation

Keeping in mind evolving nature of institutions, organisations, technologies,

and complexities of the systems, the emphasis in the empirical literature has been
on evaluation at an entity level while focusing on the performance of the total
system. The evaluation is not possible at one point of time as it requires
longitudinal data/information. This is because the output of an element and its
effect on others may occur after some gap. Moreover, output of all actors may
not be measurable. For instance outcome of policies may not be quantifiable.
Performance of systems of innovations is usually a comparison with other
systems rather than measuring them in absolute terms.
 Quantitative indicators of innovation systems
(Carlsson et. al., 2002)

Generation of knowledge
Number of patents
Number of engineers or scientists
Mobility of professionals
Technological diversity

Diffusion of knowledge
Regulatory acceptance
Number of partners/number of distribution licences

Use of knowledge
Employment
Turnover
Growth
Export-orientation