Microsoft Word bal paper with addendum doc

II.5 A further remark on abstraction 

This obviously implies a more complex theory than the one behind standard neoclassical production 

models. In these models it is assumed that technology comes as manna from heaven to be entered 

into the book of blueprints. It is also assumed that all agents have equal access to the books of 

blueprints and are equally competent in utilizing them.  

But the underlying theory of innovation systems is not ‘less theoretical’. Basically this theory is 

about how skilful but imperfect agents and organizations with a capability to enhance their 

competence do so in an interaction with other agents and how this is reflected in innovation 

processes and outcomes.  

Neither is the most important problem with the neo-classical theory that it is too abstract. It is rather 

that it makes the wrong abstractions. In a context where knowledge is the most important resource 

and learning the most important process neo-classical theory tends to abstract from the very 

processes that make a difference in terms of economic performance. These processes remain as a 

crucial foundation for innovation system analysis. The focus is upon how enduring relationships 

and patterns of dependence and interaction are established and dissolved as time goes by. New 

competences are built while old ones are destroyed. At each point of time there are patterns of 

collaboration and communication that shape the innovation system but, of course, the system is also 

evolving in a process of creative destruction of knowledge and relationships. 

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