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Contrary to some recent work on so-called ‘globalisation’, this paper argues that national and regional systems of innovation remain an essential domain of economic analysis. Their importance derives from the networks of relationships which are necessary for any firm to innovate. Whilst external international connections are certainly of growing importance, the influence of the national education system, industrial relations, technical and scientific institutions, government policies, cultural traditions and many other national institutions is fundamental. The historical examples of Germany, Japan and the former USSR illustrate this point, as well as the more recent contrast between East Asian and Latin American countries.
Christopher Freeman (Wed,) studied this question.