CHALLENGES OF BUILDING EFFICIENT REGIONAL INNOVATION SYSTEMS

Rapid globalization has drastically changed the competitive environment and the role of regions. To be competitive in a global knowledge economy, regions should establish a supportive environment for innovation and enable entrepreneurs to compete, on both markets - domestic and foreign ones and to sustain economic growth. It is already recognized that important elements of the process of innovation become regionalized and consequently there is a trend of increasing regionalism in innovation policies which is associated with a number of problems, particularly ones related to potential conflicts between national and regional objectives. Also, regional innovation systems are considered as means of regional development. This approach emphasizes the system and focuses on network and linkage effects in a region, instead of the role of independent actors and activities. The interactions among the actors involved in research, development and innovation are as important as investments in research and development and crucial in translating inputs into outputs. However, the concept of regional innovation systems is relatively new at the policy level and there is a clear need for support in the design of regional innovation systems and policies. This paper examines general issues on the formation of regional innovation systems, summarizes relevant ideas and arguments of issues on national and regional innovation systems and examples of best practices from the European Union to provide a basis for policy and institutional design of efficient regional innovation systems. Understanding regional innovation systems can help policymakers develop approaches for enhancing innovative performance in the knowledge-based regions of today.