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Innovation Systems

Innovations systems (Edquist 1999) address a challenge or ‘dilemma’ and is a social construct formed from an agreement or commitment of actors to work towards some form of concerted and collective action. The system is dynamic and forms a mix of innovation and knowledge which flows between actors.

Knowledge is the catalyst that makes the system work and when combined with social interaction and reflexive and adaptive practise, the system learns from itself and adjusts.

Innovation systems can assist in developing innovations for climate change adaptation, especially solutions that are technologically focused.

Innovation systems provide insight into the process of idea generation to technology diffusion and are mechanisms for effective problem solving (van Mierlo 2010). It allows for consideration of political and power dynamics in problem definition or with uncertainty, ambiguity, risk and unintended consequences, to the point where Vob et al. (2006) states that the “ideal of certain knowledge, unambiguous evaluation as well as planning and control become revealed as illusionary”(p. xiv). 

Innovation systems are mechanism that are reflexive and where learning occurs through stimulation in ‘the sense of a change of thinking and acting’ (van Mierlo 2010, p. 145). The modernist ontology of complete knowledge and control cannot be achieved due to the dynamics of the system and is replaced by ontology of knowledge construction from continuous learning about a situation and an epistemology that learning is found in social interactions. van Mierlo (2010) states that reflexivity is where “participants scrutinise the relationships between the incumbent system, project activities, intermediate results and the long term, ultimate aim of system change” (p. 145) and learning is facilitated by “questioning participant’s values, presumptions and practise” (p. 145).

In summary, Edquist (1999, p. 65) states that the innovation system approach:

  • places innovation and learning processes at the centre of focus;
  • adopts a holistic and interdisciplinary perspective;
  • employs historical and evolutionary perspectives, which makes the notion of optimality irrelevant;
  • emphasises interdependence and nonlinearity;
  • can encompass both product and process innovations, as well as sub-categories of these types of innovation; and
  • emphasises the role of institutions.

Innovation systems can be assessed and improved by analysing the structures and functions present in the system. Wieczorek and Hekkert (2012) define the innovation system (IS) structure as comprising of actors, institutions and infrastructure as well as their interactions.

  • Actors consist of individuals and collections of people in business, Government, NGO’s, knowledge institutions and other organisations and individuals from others such the services sector that are contributing to a technology by being involved in generation, diffusion and the utilisation of technologies (Hekkert et al. 2011). The actor network, is a critical component of innovation systems, these though are a lot less formal than CoP’s with many actors not being aware of others. So they can include formal CoP’s but also include the personal social networks that individuals have and may interact with, in large innovation system’s actors can be competitors, where their engagement is governed by bounded common interest, as a well as by legislation (e.g. Cartels and anti-competitive behaviours)
  • Institutions are defined as the ‘rules of the game’ comprising (inter alia) laws and regulations, socio-cultural as well as technical norms, use patterns and shared expectations. Institutions provide incentives for certain behaviours or penalise unwanted behaviours and this property affects the behavioural responses of actors that embedded within the institution.

The ability to change institutions (or create new ones) is critical to innovation systems and the role of actors, in order to meet the desired change agenda and identify when the processes of how goals are obtained can restrict or inhibit innovation. Institutions developed in isolation to one another, can be in conflict with one another and have competing or contradictory goals (Wieczorek et al. 2012, 2013).

  • Infrastructure consists of the elements on which innovation is built, which include the typical physical infrastructure, as well as the current knowledge and financial infrastructures.

Functions are the emergent properties of the innovation system; these are the processes that are important for the system to work and also to work well. Functions cannot be directly modified, so can only be changed by addressing structural elements such as sufficiency of actors. Wieczorek and Hekkert (2012) outlines seven core functions of an innovation system:

  • Entrepreneurial activities: Entrepreneurs integrate knowledge potential, markets and networks into action that develop into business opportunities.
  • Knowledge development: The active development of knowledge on which new business, opportunities and economies are built. How knowledge is developed and gained, and knowledge on processes of innovation are important to successful innovation.
  • Knowledge diffusion/knowledge exchange. How actors they self-organise into ‘the network’ provides the critical learning environment. The actor’s network(s) are basis for exchange of information. Within innovation systems, the ‘width and depth’ of the network is important where a too limited exposure to ideas can hinder diffusion. Hence, the network should include not just the producers and researchers, but also people that can inform on policy, markets, design, end-users as well as sceptics. The network is a location for learning-by-interacting.
  • Guidance of the search are the other activities that are occurring within the innovation systems which provide credence and legitimacy (or not) to the technology, i.e. provide ‘guidance’ for finding useful technological innovations and have impacts on the system by encouraging entrepreneurs and early adaptors. This function aids the technology selection process (Negro et al, 2007) and enables the rational allocation of scarce resources.  This function requires balancing so that resources can be used efficiently, but also that there is not a loss of variety especially early in the innovation system development.
  • Market formation. Innovations typically have to supplant existing technologies. Market formation focuses on how to get product to market. The formation of a new market environment that enables new ways of working therefore improves innovation adoption.
  • Resource mobilisation. This function addressed the resource requirements in order to run the innovation system and includes the availability of financial, human, social, cultural and economic capitals.
  • Creation of legitimacy. This function addresses building legitimacy for the new technology.  Through, enabling technological shift or by advocacy which can help develop an implementation trajectory for the technology.


Edquist C. (1999). Innovation Policy – A Systemic Approach.  Retrieved from

Van Mierlo, B., Arkesteijn, M., & Leeuwis, C. (2010). Enhancing the Reflexivity of System Innovation Projects With System Analyses. American Journal of Evaluation, 31(2), 143-161.

Wieczorek, A., Negro, S., Harmsen, R, Heimerisk, G., Lou, L, & Hekkert, M. (2013). A review of the European offshore wind innovation system. Renewable and Sustainable Energy Reviews, 26, 294–306.

Wieczorek, A. & Hekkert M. (2012a) Systemic instruments for systemic innovation problems: A framework for policy makers and innovation scholars. Science and Public Policy, 39, 74–87​

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