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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.
Source: www.sfu.ca/cprost/docs/9706.pdf
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