Why study national systems and national styles of innovation?
Mgconsidtr that product specialization reflects variations in factor proportions rahr than in the knowledge base, but to focus pure& on resource allocations would result in stagnant economic development. lherefore a vibrant economy is one where innovation takes place. this shifts the focus of attention away from rational decision-making to learning and recognition that thefiture has an uncertain outcome. Laming involvesfour institutional components: the time horizon ofthe agents, the rob oftrust, the actual mix of rationalip, and h way authority is expressed. Research shows a strong correlation between specialization in trade and specialization in the knowledge base. The national S y s h s of Innovation approach concludes that important parts of the knowledge base are tacit and emerge from routine basic learning-bydoing, -using and -interactirg rather thanjom science and technology search activities. A sociolopital systa approach is functional and deterministic, whereas an innovation sple approach refers to pattern ofbehauiour. To understand the s≤ of innovation better afour-fold taxonomy ofknowledge is proposed: knowle4e about facts, knowledge about princ$les and laws of nature, the skills and capabilip to do something, and knowledge about who knows how to do what. the mix of thesefour knowledge factors will characlerize the s≤ of innovation.