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Proceedings of the 8th European Conference on Innovation and Entrepreneurship – ECIE 2013
Bounding strength and intensity of networking provides the integrity of the national innovation system (NIS). The integrity allows the system to perform its fundamental functions of production, storage, diffusion and economic use of new knowledge. The primary factors of system dysfunctions caused by systemic failures include the following: a shortage of actors’ incentives for activities in NIS, lack of absorptive and innovative capacity and shortage of competency of actors, insufficient resources and a lack of partners providing the performance of NIS processes, disruption of interaction coherence and bounding strength, a complexity and failures of the framework conditions. The second-row factors, i.e. ones influencing the factors listened above, could be defined as the system imperfections. The system dysfunction resulting from the action of the factors induces public policy makers to intervene into formation and development of the NIS. To select and specify the NIS components that public policy should address, policy tools are bound to the NIS horizontal and vertical decompositions. During the horizontal decomposition, the NIS is presented in the form of three interrelated macrob-locs. They are business environment and markets, environment producing new knowledge, knowl-edge transfer and diffusion mechanisms. During the vertical decomposition, a macrobloc should be divided into NIS subprocesses. Besides, the investment-driven and innovation-driven stages are taken into account. The public policy on the former stage has to facilitate a switch to competition driven by low costs and improvements of consumer properties of products on the base catching-up processes. Special measures shape the technology push policy of this stage. The essential feature of the latter stage is a radicalization of innovations. On this stage, the government continues to develop technology push policy, but it places a significant emphasis on the market-pull policy focused on the end of an innovation cycle and establishment of non-linear network interactions
