As Chris Freeman has pointed out ‘The rate of technological change in any country and the effectiveness of companies in world competition in international/ trade in goods and services, does not depend simply on the scale of their R&D… It depends on the way in which the available resources are managed and organized, both at the enterprise and national level. The national system of innovation may enable a country with limited resources…. to make progress through appropriate combination of imported technology and local adaptation and improvement.’
The Figure shows a simplified diagram of a national system of innovation, with the purpose to define its main elements, inter-relationships, and the two most important types of flows, knowledge flows and financial flows.
Holbrook, J.A.D., The Use of National Systems of Innovation Models to Develop Indicators of Innovation and Technological Capacity, Centre for Policy Research on Science and Technology, Vancouver