Ideas, innovations, and networks: a new policy model based on the evolution of knowledge

In this paper, we argue that a new policy model for science and technology is needed and must be evolutionary in nature. The paper proposes utilizing the idea innovation network theory as a framework for assessing sectoral innovation patterns and identifies six types, or “arenas,” of research that are linked to innovation within these networks. Following the idea innovation network theory, the paper argues that two societal trends, the fragmentation of markets and the growth of knowledge, are driving organizations toward greater functional differentiation. Successful innovation will occur when these differentiated organizations become closely linked within innovation networks that integrate the arenas of research. The paper argues that this framework has predictive power, in that it allows the identification of path-dependent blockages or gaps within idea innovation chains that prevent the emergence of effective innovation networks in different countries. Policy makers can play an important role by fostering the development of tightly coupled networks that include organizations involved in each of the types of research. The paper provides empirical support for the framework using a cross-national European study of the telecommunications and pharmaceutical industries.