National systems of innovations are x-efficient (and x-effective) - Why some are slow learners

The growing literature on national systems of innovations (NSIs) are creating a crucial new perspective on the institutional infrastructure of the knowledge-based economy. However, this literature tends to be somewhat optimistic: it often takes for granted that NSIs are sets of institutions facilitating learning, particularly about technology and organization. This paper reconsiders the efficiency of NSIs. It suggests that NSIs are x-inefficient (and x-effective). It develops some of the major factors explaining inefficiencies and proposes methods to measure the efficiency and effectiveness of NSIs. It offers some examples of inefficiencies from a comparison between selected NSIs, and suggests indicators of efficiency and effectiveness. (C) 2002 Elsevier Science B.V. All rights reserved.