Technical Innovation Systems
Faculty of Geosciences Utrecht University

Seven Functions of Innvation Systems

  • F1. Entrepreneurial Activities: The classic role of the entrepreneur is to translate knowledge into business opportunities, and eventually innovations. The entrepreneur does this by performing market-oriented experiments that establish change, both to the emerging technology and to the institutions that surround it. The Entrepreneurial Activities involve projects aimed to prove the usefulness of the emerging technology in a practical and/or commercial environment. Such projects typically take the form of experiments and demonstrations.
  • F2. Knowledge Development: The Knowledge Development function involves learning activities, mostly on the emerging technology, but also on markets, networks, users etc. There are various types of learning activities, the most important categories being learning-by-searching and learning-by-doing. The former concerns R&D activities in basic science, whereas the latter involves learning activities in a practical context, for example in the form of laboratory experiments or adoption trials.
  • F3. Knowledge Diffusion / Knowledge Exchange: The characteristic organisation structure of a Technological Innovation System is that of the network. The primary function of networks is to facilitate the exchange of knowledge between all the actors involved in it. Knowledge Diffusion activities involve partnerships between actors, for example technology developers, but also meetings like workshops and conferences. The important role of Knowledge Diffusion stems from Lundvall’s notion of interactive learning as the raison-d’être of any innovation system. The innovation system approach stresses that innovation happens only where actors of different backgrounds interact. A special form of interactive learning is learning-by-using, which involves learning activities based on the experience of users of technological innovations, for example through user-producer interactions.

  • F4. Guidance of the Search: The Guidance of the Search function refers to activities that shape the needs, requirements and expectations of actors with respect to their (further) support of the emerging technology. Guidance of the Search refers to individual choices related to the technology but it may also take the form of hard institutions, for example policy targets. It also refers to promises and expectations as expressed by various actors in the community. Guidance of the Search can be positive or negative. A positive Guidance of the Search means a convergence of positive signals – expectations, promises, policy directives – in a particular direction of technology development. If negative, there will be a digression, or, even worse, a rejection of development altogether. This convergence is important since, usually, various technological options exist within an emerging technological field, all of which require investments in order to develop further. Since resources are usually limited, it is important that specific foci are chosen. After all, without any focus there will be a dilution of resources, preventing all options from prospering. On the other hand, too much focus may result in the loss of variety. A healthy Technological Innovation System will strike a balance between creating and reducing variety.

  • F5. Market Formation: Emerging technologies cannot be expected to compete with incumbent technologies. In order to stimulate innovation, it is usually necessary to create artificial (niche) markets. The Market Formation function involves activities that contribute to the creation of a demand for the emerging technology, for example by financially supporting the use of the emerging technology, or by taxing the use of competing technologies. Market Formation is especially important in the field of sustainable energy technologies, since, in this case, there usually is a strong normative legitimation for the intervention in market dynamics.
  • F6. Resource Mobilisation: Resource Mobilisation refers to the allocation of financial, material and human capital. The access to such capital factors is necessary for all other developments. Typical activities involved in this system function are investments and subsidies. They can also involve the deployment of generic infrastructures such as educational systems, large R&D facilities or refuelling infrastructures. In some cases, the mobilisation of natural resources, such as biomass, oil or natural gas is important as well. The Resource Mobilisation function represents a basic economic variable. Its importance is obvious: an emerging technology cannot be supported in any way if there are no financial or natural means, or if there are no actors present with the right skills and competences.
  • F7. Support from Advocacy Coalitions: The rise of an emerging technology often leads to resistance from actors with interests in the incumbent energy system. In order for a Technological Innovation System to develop, other actors must counteract this inertia. This can be done by urging authorities to reorganise the institutional configuration of the system. The Support from Advocacy Coalitions function involves political lobbies and advice activities on behalf of interest groups. This system function may be regarded as a special form of Guidance of the Search. After all, lobbies and advices are pleas in favour of particular technologies. The essential feature which sets this category apart is that advocacy coalitions do not have the power, like for example governments, to change formal institutions directly. Instead, they employ the power of persuasion. The notion of the advocacy coalition is based on the work of Sabatier, who introduced the idea within the context of political science. The concept stresses the idea that structural change within a system is the outcome of competing interest groups, each representing a separate system of values and ideas. The outcome is determined by political power. acknowledgement:Wikipedia