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When the idea about the innovation system approach was first discussed in the middle of the 1980s nobody expected it to become as widely diffused as it is today. Today, OECD, the European Commission and UNCTAD have absorbed the concept as an integral part of their analytical perspective. The World Bank and IMF have been more reluctant but even here change seems to be taking place. The US Academy of Science has recently brought the National Innovation System into its vocabulary and now uses it as a framework for analyzing science and technology policy in the US. Sweden, has given the concept legitimate status in its own particular way by naming a new central government institution (an ‘ämbetsverk’) VINNOVA which stands for ‘the Systems of Innovation Authority’.
It is interesting to speculate why the concept has diffused so rapidly among scholars and policy makers. One reason may be that mainstream macroeconomic theory and policy have failed to deliver an understanding and control of the factors behind international competitiveness and economic development. Another reason might be that the extreme division of specialization among policy institutions and policy analysts has become such a big practical problem that an analytical concept that helps to overcome these problems was welcomed not least among those responsible for innovation and science policy. It is our impression that the concept to begin with diffused to this more limited community but that it now tends to enter into broader circles of scholars and policy makers focusing on economic growth and development. The focus on national systems is, of course, controversial in a context characterized by so-called globalization. Here, one might think of ‘the owl of Minerva flying in the dusk’ and argue that it is only when an institution (in this case the nation state) is becoming seriously threatened that we begin to understand its importance and fundamental functions. But it is also important to note that most empirical studies of how far globalization processes have undermined national systems seem to indicate that the national level remains important for certain innovation activities (Archibugi and Michie, 1995; Cantwell, 1995; Patel, 1995). In a series of studies based on patenting statistics Keith Pavitt and Pari Patel demonstrated that the national origin of multinational firms did matter quite a lot for the location of innovative activities (see for instance Patel and Pavitt, 1994). Actually, it might be argued that the growing proximity and potential tension among national systems brought about by globalization is a factor increasing the demand for understanding nation-specific systemic differences between innovation practices that relate to international trade (Ostry and Nelson, 1995).