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Probably the most influential concept in the field of innovative environments, the Regional Innovation System is conceived as a set of institutions, including clusters, universities, R&D centres, technology transfer organisations, financial and knowledge dissemination agencies, which work together and play the major role in influencing the innovative performance of companies.
The above cooperation produces systemic effects that encourage firms within the region to develop specific forms of culture and practice, which reinforce their innovative capability and competitiveness. Systemic effects are related to the reduction of transaction costs, tacit knowledge transfer through face-to-face contacts, and synergies through imitation and interaction between technology providers, public infrastructure, and potential adopters of inventions.
David Doloreux and Saeed Parto put the origin of the concept in two main bodies of theory and research. ‘The first is systems of innovation. Built on evolutionary theories of economic and technological change, the systems of innovation literature conceptualizes innovation as an evolutionary and social process. Innovation is stimulated and influenced by many actors and factors, both internal and external to the firm. The social aspect of innovation refers to the collective learning process between several departments of a company (for example, R&D, production, marketing, commercialization, etc.) as well as to external collaborations with other firms, knowledge providers, financing, training, etc.
The second body of literature is regional science and its explanations about the socioinstitutional environment from which innovations emerge. From this point of view, innovation is localized and a locally embedded, not placeless, process. Accordingly, the literature on regional science deals both with the role of proximity, i.e., the benefits deriving from localization advantages and spatial concentration, and the territorially prevailing sets of rules, conventions and norms through which the process of knowledge creation and dissemination occurs. In other words, a regional innovation system is characterized by cooperative innovation activities between firms and knowledge- creating and diffusing organizations, such as universities, training organizations, R&D institutes, technology transfer agencies, and so forth, and the innovation-supportive culture that enables both firms and systems to evolve over time’. (Doloreux, D. and Parto, S. (2005) ‘Regional innovation systems: Current discourse and unresolved issues’ Technology in Society, 27, pp. 133–153).