Developing innovative competences: The role of institutional frameworks

The recent development of the biotechnology and computer industries has highlighted the variety of ways in which firms in different countries and sectors can develop innovative competences. Four aspects are particularly important: the degree of involvement in the public science system, involvement in industry collaborations, reliance on specialist skills of individuals, and the ability to change collective competences radically. National and regional variations in these result from differences in dominant institutional frameworks. In addition to the organization of capital and labour markets and the structure of inter-firm relations, these frameworks include the nature of the public science system. Particularly important features of these systems include: the organization of research training, the flexibility of researchers and organizations in developing novel goals and approaches, the organization of scientific careers, and the prevalent science and technology policies of the state. Distinct combinations of these institutional features have become established in different market economies and led to contrasting styles of innovative competence development being adopted. These in turn help to explain continuing variations in patterns of technological change between countries.