A Review of a Literature on Innovation, with a Focus on Policy and Institutional Implications

The underlying rationale for this review is that policy implications cannot be automatically derived from analyses of innovation issues i.e. ‘normative’ does not automatically follow from ‘positive’. A view that policy application can be developed as an afterthought of positive analysis is similar to the logic of a linear innovation model whereby normative is derived in straightforward manner from the previous (positive) stage of research. This survey suggests that positive analysis is only one of inputs into understanding of policy issues. In that respect, there are limits to ‘translation’ of any conceptual framework into a concrete policy setting. For policy purposes it is essential to understand what has been ‘lost in translation’ but also what has been (unexpectedly) added. The limited usefulness of policy implications derived directly from either conceptual or empirical analysis call for explicit policy focused research. This review present taxonomy of innovation policy literature through a) a literature review of a number of selected references (over 220), and b) grouping of these references into specific groups based on their theoretical /conceptual and empirical (practitioners) focus. We show that there is not a coherent paradigm (research agenda) in innovation policy area but there is a peaceful co-existence of several often incompatible perspectives (paradigms). We outline newly emerging areas of innovation policy analysis (complementarities in growth, systems and policies; interactions between innovation systems and globalization; return of the State into the analysis of innovation policy, and development of concept of broad (implicit) innovation policy).