Formation of emerging technological innovation systems in Iran –
Case study in nanotechnology sector
Mehdi Mohammadi
PHD Student, Management and Accounting Faculty, Alllameh Tabatabaei University, Tehran, Iran
1. Introduction
Analyzing and evaluating the process of creation, diffusion and use of knowledge at the national level is not
possible without considering a proper analytical framework at the national level. Today, the national innovation
system framework is used as a conceptual tool to analyze and evaluate the knowledge-based economy at the
national level, because this framework explain the elements and relationships that lead to the creation,
dissemination and utilization of knowledge at the national level (OECD 1999).
Nowadays achieving to emerging technologies like nanotechnology and Biotechnology, etc., have taken the
growing path in the scientific and technological development of countries. During recent years, these technologies
have found an important role in the development plans of developing countries. In recent years, In Iran also, there
is a great deal of attention to the formation and development of emerging technologies and this is well evident in
the process of policy making and institutionalization of science & technology in Iran.
Formation and development of these emerging technologies requires the development of institutions and
interactions that lead to the process of creation, diffusion and exploitation of Knowledge. Accordingly, in this study
the innovation system framework is used to analyze the process of formation and development of emerging
technologies in Iran. For this purpose, the approaches and models associated with the formation phase of
innovation systems are used. These approaches and models often use the functions and activities of Innovation
system in the formative phase as units of analysis.
In this research, first by literature review, the key functions and activities in the formation phase of innovation
system were identified and then by interviews with experts familiar with nanotechnology in Iran, the basic
conceptual model has been developed. Via interviews by about 20 activists from nanotechnology sector in Iran
and content analysis of documents and activities carried out in this section, a qualitative analysis of the formation
process of nanotechnology sector in Iran is presented and then by the historical data mapping technique, the
formation path of nanotechnology in Iran have been charted. Moreover, in this research using a questionnaire, a
field study was conducted in Iran nanotechnology. In this field study, the status of innovation system functions and
activities in nanotechnology sector was assessed. As the research sample, 171 activists from Iranian
nanotechnology sector respond to this questionnaire. 35% of these experts were from industrial companies active
in the nanotechnology sector and 40% of them from academic and research centers and 25% of them from policy
& supportive institutions of this sector. Finally, using factor analysis Technique, functions and activities of
conceptual model were confirmed and in addition, using multiple regression analysis, the path of functionality of
innovation system and the causal relationships between different functions in Iranian nanotechnology sector were
mapped. Based on results of this study, 7 functions and 18 activities for the formation of innovation system in
Iranian nanotechnology sector have been identified. Historical analysis of these functions and activities indicates
that government has a key role through influencing the functions such as guidance of research and innovation,
supply and allocation of resources and institutional building and legalization and this key role over time causes
other system functions such as knowledge creation, knowledge diffusion, market formation and entrepreneurship,
which leads to the formation of technological innovation system in Iranian nanotechnology sector.
2. The concept of technological innovation system
From late 1980 to early twenty-first century, different approaches regarding the concept of innovation systems
have been developed. Some of the most important of these approaches are:
- National innovation system (Freeman, 1987; Lundvall, 1992; Nelson, 1993; Edquist and Johnson, 1996)
- Sectoral innovation system (Breschi and Malerba, 1997)
- Regional innovation system (Cooke, 1992)
- Technological innovation system (Carlsson & Stankievicz, 1991)
- National learning system (Viotti, 2002; Mathews, 2001)
In this study, the formation and growth of nanotechnology sector as an emerging technology has been analyzed
by using technological innovation system approach. Therefore, in this study two issues should be considered:
first, this research focuses on a technology sector and therefore must use the models related to technological
innovation system approach. Second, this study focuses on the formation phase of an emerging innovation
system, and thus should be associated with the models regarding the formation phase of technological innovation
system, because the requirements and components of an innovation system in the formation Phase is different
from expanding and maturation phase.
Different nature and structure of various technological sectors causes the idea that assessment and analysis of
innovation at the sectoral level will be more efficient (Carlsson & Stankievicz, 1991; Breschi and Malerba, 1997).
Innovation and technological change are highly affected by the sector in which they take place. The agents, the
relationships among actors and the institutions of a sector all exert a major and profound influence on the
differences in innovation across sectors (Breschi and Malerba, 1997). Therefore, the concepts of sectoral
innovation system and technological innovation system have been developed to respond to This Idea.
According to Malerba (2002), a workable definition of a sectoral system of innovation and production is the
following. A sectoral system of innovation and production is a set of new and established products for specific
uses and the set of agents carrying out market and non-market interactions for the creation, production and sale
of those products.
But in this research, another concept at the sectoral level has been used. This concept is technological innovation
system. It is defined by Carlsson and Stankiewicz (1991) as: a network of agents interacting in the economic/
industrial area under a particular institutional infrastructure (...) and involved in the generation, diffusion, and
utilization of technology (Carlsson & Stankievicz, 1991). In this paper, we focus on technological innovation
systems (TIS), i.e. socio-technical systems focused on the development, diffusion and use of a particular
technology (in terms of knowledge, product or both). Thus, technological systems are multi-dimensional. Thus the
formation of a new TIS, involves three structural processes: entry of firms and other organizations, formation of
networks and institutional alignment (Bergek et al., 2006 and 2008).
But the underlying issue in this research is how we can identify the most key policy issues associated with the
formation and growth of a technological innovation system? The theoretical foundation of intervention normally
rests on the notion of ‘market failures’, that is, the failure of market mechanisms to reach an optimal solution to an
economic problem (Bergek et al., 2006). But this concept is, however, an inadequate guide to policy-makers in an
IS context and some of scholars, suggested that policy-makers should abandon the ‘market failure’ approach and
instead search for system weaknesses. These may be features of actors, markets, institutions and networks that
may block or obstruct the evolution of an IS (Bergek et al., 2006).
3. The functional approach for analyzing TISs
In the innovation system literature, to identify system failures, there are at least two basic approaches:
First, in most of the literature discussing innovation system failure tends to focus on perceived weaknesses in the
structural composition of a system. A central proposition in this approach is that the nature and composition of
actors/markets, institutions and networks may obstruct the formation of a TIS and eventually, such weaknesses in
system structure may lead to “system failure” (Edquist, 1999; Malerba, 2002; Bergek et al., 2008).
Second, in the another perspective, some experts in the innovation system literature, have expressed that in
order to be able to identify the central policy issues in a specific innovation system, we need to supplement a
structural focus with a process focus (Bergek et al., 2008). They refer to this perspective the “functional approach”
(Edquist et al., 2004, 2008; Johnson& jacobsson, 2000; Johnson, 1998; Hekkert et al., 2004 , 2007; Bergek et al.,
2005, 2006, 2008). The main advantage with a functional analysis is that we can separate structure from content
and the focus is more on what is actually happening in the SIS than on what the components are and then it is
more easily o formulate both policy goals and policy problems in functional terms (Bergek et al., 2008). The
functions approach to innovation systems thus implies a focus on the dynamics of what is actually “achieved” in
the system rather than on the dynamics in terms of structural components only (Bergek et al., 2008).
The traditional IS approaches (The first approach), such as Lundvall (1992) and Nelson (1993), focused strongly
on the components within the systems, i.e. organizations and institutions (Edquist et al., 2008). Since the late
1990s the second approach emerged and some authors have addressed issues related to the specification of
activities influencing the overall function of IS (Galli and Teubal, 1997; Johnson and Jacobsson, 2003; Liu and
White, 2001; Rickne, 2000). As has been stated by Hekkert et al (2007), there are three reasons for adopting the
functional approach. First, this perspective makes comparison in terms of performance between innovation
systems with different institutional set-ups more feasible. Second, the functions perspective permits a more
systematic method of mapping determinants of innovation and this increases the analytical power of the IS
approach. Third, the functions perspective has the potential to deliver a clear set of policy targets as well as
instruments to meet these targets by evaluating System performance in terms of the functionality in a particular
innovation system.
Also, based on Bergek and jacobsson (2004) there are two main reasons for analyzing a technological system in
functional terms as well as in terms of its constituent components. First, we can define the border of the system,
an inherently very difficult task, by analyzing what promotes or hinders the development of these functions.
Second, there is no reason to expect a particular system structure to be related to the performance of a
technological system in a clear and unambiguous way. By arranging the empirical material in terms of functions,
we can trace the way through which, for instance, a particular combination of actors or a specific institutional setup shapes the generation, diffusion and utilization of a new technology.
Based on Edquist’s (2004) argument, the main or “overall” function of innovation system is to pursue innovation
processes or to develop and diffuse and utilize innovations, and the “activities” in IS are those factors that
influence the development, diffusion and use of innovations. Bergek et al., (2008) also defines that the
contribution of a component or a set of components to the overall goal of innovation system is referred to as a
“function”.
In the literature, many efforts have been performed to identify and define the innovation system functions. The
main studies have been performed in this field include: Johnson (Bergek), (1998); bergek and jacobsson, (2000,
2003, 2004, 2005, 2006, 2008); Rickne (2000); Liu & white (2001); Edquist et al., (2004); Carlsson et al., (2005);
Chang & Shih (2004); Hekkert et al., (2004, 2007, 2009); and also some related studies like Galli and Teubal
(1997), McKelvey (1997), Ørstavik (1997).
The first list of innovation system functions was drafted in 1998 by Johnson (Bergek). After that many studies
have done by Bergek and Jacobsson and seven functions of Innovation system more accurately identified
(Bergek and Jacobsson, 2005, 2006, 2008). These seven functions are: 1. Knowledge development and diffusion;
2. Influence on the direction of search; 3. Entrepreneurial experimentation; 4. Market formation; 5. Legitimation; 6.
Resource mobilization; 7. Development of positive externalities.
Edquist et al., (2004) identified ten “activities” of innovation system include: 1. Provision of R&D and, thus,
creation of new knowledge, 2. Competence building through educating and training the labour force for innovation
and R&D activities, 3. Formation of new product markets, 4. Articulation of quality requirements emanating from
the demand side, 5. Creating and changing organizations needed for developing new fields of innovation, 6.
Networking through markets and other mechanisms, including interactive learning between different organizations
(potentially) involved in the innovation processes, 7. Creating and changing institutions, 8. activities such as
providing access to facilities and administrative support for innovating efforts, 9. Financing of innovation
processes and other activities that can facilitate commercialization of knowledge and its adoption 10. Provision of
consultancy services relevant for innovation processes.
Also, Hekkert and his colleagues have carried out a series of studies in this area since 2004 until now. They have
defined seven functions for technological innovation systems that very similar to proposition of Bergek and her
colleagues. These seven functions include: 1. Entrepreneurial activities; 2. Knowledge development; 3.
Knowledge diffusion through networks; 4. Guidance of the search; 5. Market formation; 6. Resources mobilization;
7. Creation of legitimacy/counteract resistance to change. Using this approach, Hekkert and his colleagues have
done several studies on the formation and growth of emerging innovation systems, particularly in renewable
energy sector (Hekkert et al., 2007, 2009; Negro et al., 2007, 2008, 2009; Suurs et al., 2009; Alphen et al., 2009)
4. Formation phase of emerging TISs and interactions between functions
Bergek and Jacobsson (2008) suggested that it is useful to distinguish between a formative phase and a growth
phase in the development of a TIS and that it is plausible that the definition of “functionality” differs between these
phases (Bergek and Jacobsson, 2003; Jacobsson and Bergek, 2004). Then, the functional pattern, i.e. how the
functions, or key processes, are performed and improved, can be analyzed with respect to the requirements of
each phase. These two phases differ in terms of the character of technical change, the patterns of entry/exit and
the rate of market growth (Jacobsson and Bergek, 2004).
In the formative phase, there is a range of competing designs, small markets, many entrants and high uncertainty
in terms of technologies, markets and regulations, and to understand the process in which this formative stage
emerges, it should emphasize on four features of this process: market formation, the entry of firms and other
organizations, institutional change and the formation of technology-specific advocacy coalitions (Jacobsson and
Bergek, 2004).
The formative phase may be indicated by, following factors (Bergek and Jacobsson 2008):
•
The time dimension, where we rarely escape formative periods that are shorter than a decade (yet they
can last For many decades);
•
Large uncertainties prevailing as regards technologies, markets and applications;
•
Price/performance of the products being not well developed;
•
A volume of diffusion and economic activities that is but a fraction of the estimated potential;
•
Demand being unarticulated; and
•
Absence of powerful self-reinforcing features (positive feedbacks) and weak positive externalities.
The fact that functions positively interact and influence each other can be considered a necessary condition for
structural change and, thus, for systemic innovation. According to Jacobsson and Johnson the function fulfillment
could lead to virtuous cycles of processes of change (or positive feedback loops) that strengthen each other and
lead to the building up of momentum to create a process of creative destruction within the incumbent system.
Vicious cycles are also possible. In this case negative function fulfillment leads to reduced activities related to
other functions and thereby slowing down or stopping progress (Hekkert et al., 2007).
Suurs (2009), based on his research on the formation of emerging technological systems in renewable energy
sector has found four paths for the formation of emerging TISs and referred to them as "Motors of sustainable
innovation”. These four motors are as following:
1. The Science and Technology Push (STP) motor: The dynamic of the STP Motor involves a sequence
consisting of positive expectations and/or research outcomes leading to the setting up of governmentsupported R&D programs and, directly linked to it, the allocation of financial resources to an emerging
technology.
2. The Entrepreneurial Motor: The event sequence that characterizes this motor starts with firms, utilities
and/or local governments entering the TIS and initiating innovative projects, usually adoption experiments
or demonstration projects, because they see opportunities for commercial or societal gain in the future.
Given the pre-commercial status of the emerging technology, the actors then require resources to cover
part of their costs and to compensate the financial risks they take. For this, they lobby the national
government. If all goes well, the financial resources are granted in the form of project-specific subsidies.
Depending on the funding, the projects are started. The outcome, positive or negative, feeds back into the
dynamic as it provides the incentive for other actors to initiate projects, or refrain from doing so.
3. The System Building Motor: The event sequence associated with this motor starts with firms and other
actors venturing into innovative projects, typically demonstrations, sometimes with successful outcomes.
As part of these ventures, they organize themselves in platforms with the aim of sharing knowledge but
also to communicate and co-ordinate further technological development. Within the framework of these
platforms, they also lobby for resources. So far these relations are comparable to those of the
Entrepreneurial Motor. The important difference lies in the connection between Support from Advocacy
Coalitions on one hand, and Market Formation and Guidance of the Search on the other.
4. The Market Motor: The event sequence constituting the Market Motor starts with the setting up of
institutional structures that directly facilitate a commercial demand for the emerging technology. Once
such structures are firmly in place, this leads to high expectations and increasing availability of resources.
This leads to the opening up of possibilities for new entrants to adopt the emerging technology. The newly
entered firms are likely to make large investments, for example in infrastructure, and they may also
develop marketing strategies, thereby increasing demand for the emerging technology further.
Therefore, there are different paths of formation for TISs and maybe other trajectories could be happen for the
formation of other TISs in somewhere else with different institutional context. Based on this argument, in this
research we will try to find the special trajectory of formation in Iranian nanotechnology sector. In this study, we
have used a combination of "Bergek and her colleagues" and "Hekkert and colleagues" approaches, because:
first, these two approaches focused on the formation phase of technological systems and mainly, have been used
for analyzing emerging innovation systems, and second, in these two approaches the sequence, interaction and
cumulative causation of different functions are very important for analyzing the process of formation of TISs.
5. The conceptual model of this research
As mentioned before, in this research we used a conceptual model for analyzing nanotechnology TIS based on a
combination of "Bergek and her colleagues" and "Hekkert and colleagues" approaches. This conceptual model,
consist of seven functions as following:
1. Knowledge creation & development (C): Research and development, knowledge creation and different
modes of learning are the key requirements for the formation of an emerging innovation system.
"Learning by research" and "learning by doing" are the main determinants of this function (Hekkert et al.,
2007). Research and academic sectors are the main actors of this function. It has three activities/sub
functions in our conceptual model: Volume of knowledge creation & development (C1); Mode of
knowledge creation & development (C2); Process of knowledge creation & development (C3).
2. Knowledge diffusion and development of positive externalities (D): Transfer and diffusion of knowledge
and formation of networks are important and key issues in any innovation system. The formation of
networks required for the knowledge, Policy, market and competitors interactions is the central issue of
this function and it will lead to "learning by interaction" and knowledge spill-over (Hekkert et al., 2007;
Bergek et al., 2008). This function has two activities/ sub functions in our conceptual model: Formation of
division of labour and specialized value chain (D1); Information and knowledge flows and spill-over (D2).
3. Guidance & direction of the Search (G): Due to the limited resources available for the development of
each technology, often just certain areas of technological developments have the opportunity of growth
and resource absorption. These choices are not predetermined and may set by various actors including
government, academia, industry or market actors (Hekkert et al., 2007). According to the existing
concepts of evolutionary theory of technological change, if the “knowledge creation” function regarded as
the “creation of technological variety”, then this function represents the “the process of selection” (Hekkert
et al., 2007). As a function, “Guidance & direction of the Search (G)” involves several activities that
positively lead to the formation of priorities for the technology and have effects on the directions of actors
and consumers (Bergek et al., 2008). The guidance of the search is not solely a matter of market or
government influence; it is often an interactive and cumulative process of exchanging ideas between
technology producers, technology users, and many other actors (Hekkert et al., 2007). The activities/ sub
functions related to this function are as following: Visions and expectations about the growth potential
(G1); Policy development and priority setting (G2); Current and complementary businesses (G3).
4. Entrepreneurial Activities (E): Entrepreneurial activities are the core process for the formation of any
emerging innovation system (Hekkert et al., 2007). Emergence and existence of each TISs, heavily
related to existence of entrepreneurs and firms active in the sector. Usually, this function is the first and
most important performance indicator of an emerging innovation system. Emergence of individual
entrepreneurs and/or diversified companies active in the technology field is a key indicator for the
formation and growth of an emerging innovation system (Hekkert et al., 2007; Bergek et al., 2008). This
function including following activities/ sub functions: Mode of entrepreneurship (E1); Experiences in using
technology and its applications (E2).
5. Market Formation (M): For a new innovation or an emerging technology, markets may not exist, or be
greatly underdeveloped therefore they are always facing many problems for entering to the market
(Hekkert et al., 2007; Bergek et al., 2008). They can not easily compete with existing products and
technologies and thus their growth is slow and requires a supported space. Institutional changes, e.g.
development of temporary niche markets; the formation of standards; creation of (temporary) competitive
advantage by favorable tax regimes; are often a prerequisite for markets to evolve (Hekkert et al., 2007;
Bergek et al., 2008). This function encompasses following activities/ sub functions: Market size and its
growth (M1); Incentives and inducement mechanisms for market growth (M2); Customer groups and their
purchasing behavior (M3).
6. Resource Mobilization (R): The concentration of this function is on the human and financial resources
required for the formation of other functions in emerging TIS, and therefore it is a prerequisite for the most
of the other functions (Hekkert et al., 2007). As a TIS evolves, a range of different resources needs to be
mobilized. The capability of TIS to mobilize the necessary human resources through education and
training and also to provide enough financial resource for research and technological activities are the
central points for this function (Bergek et al., 2008). The activities/ sub functions are as following:
Developing human capital and specialized labour force (R1); Mobilization of financial resources (R2);
Existence of complementary assets (R3).
7. Institutionalization and Legitimation (I): For the formation and growth of a new technological field, it is
necessary to cope with existing institutional pattern and also to make the new institutional infrastructures
(Hekkert et al., 2007). Formation of advocacy coalitions and interest groups for the technology will lead to
mobilize the necessary resources; to form the new demands; to be considered appropriate and desirable
by relevant actors (Hekkert et al., 2007; Bergek et al., 2008). The activities/ sub functions are as
following: Developing necessary institutions and required regulations (I1); Formation of advocacy
coalitions and interest groups and their lobby power (I2); Promotional and extension activities (I3).
Table 1: Functions, Activities/ Sub-functions and Main indicators of the conceptual model of this research
functions
Activities/ Sub-functions
Volume of knowledge creation &
development (C1)
Knowledge creation
& development (C)
mode of knowledge creation &
development (C2)
process of knowledge creation &
development (C3)
Knowledge diffusion
and development of
positive externalities
(D)
Formation of division of labour and
specialized value chain (D1)
Information and knowledge flows
and spill-over (D2)
Visions and expectations about the
growth potential (G1)
Guidance & direction
of the Search (G)
Policy development and priority
setting (G2)
Current and complementary
businesses (G3)
Entrepreneurial
Activities (E)
Mode of entrepreneurship (E1)
experiences in using technology and
its applications (E2)
Market size and its growth (M1)
Market Formation
(M)
Incentives and inducement
mechanisms for market growth (M2)
Customer groups and their
purchasing behavior (M3)
Main indicators
Publications; patents; research projects (academic and
non academic); existence of national or big research
projects; learning curves
Basic researches; developmental researches;
commercialization knowledge; problem-based or needbased researches
Internal R&D; knowledge transfer and learning
Existence of specialized actors in value chain; existence
of extended and specialized labour market; size and
number of networks and clusters
Workshops, conferences and exhibition; international
research and technological collaborations; Industryscience interactions
International and external trends and experiences of
other countries; promotional activities by national
scientific community and activists in this filed; the
relevance of existing expertise
Development of clear vision and objectives by the
government; Development of priority areas; developing
incentives, supports and complementary standards
Status of related businesses in the country; tendency of
national and big sectors or companies to enter in this
field; Existence of technical bottlenecks in the current
businesses
Start-ups and spin-offs; diversified established firms;
combination of current firms in this sector (private or
public)
type and successfulness of technology applications and
experiments
Market size and related niche markets; potential export
market
Existence of market competitive advantage by incentives
and supports; existence of local content policies and
standards or governmental purchasing rules; alignment
with national economic and commercial policies
Existence of public or private customers; the role of
leading customers; role of specialized customers with
non-routine purchasing behavior
functions
Activities/ Sub-functions
Main indicators
volume and quality of human resource (specially from
universities); existence of specialized & experienced
human resource; existence of complementary expertise
like management, entrepreneurship, …; existence and
quality of non-academic trainings
R&D investments by government and private sectors;
Volume of venture capital and financial supports for
entrepreneurship; existence of loans and grants for
academic researches
Existence of complementary infrastructures like
incubators and technology parks, laboratories, networks,
…; Existence of complementary products, services and
know-how
Alignment with current regulations and laws;
development of special institutions and regulations;
development of product and service standards;
development of IPR-related institutions
Size and growth of advocacy coalitions & interest
groups; existence of a powerful leading organization
(policy maker); coherence between activists about
priorities and future of technology; existence of actors
with high political and financial power in the sector
Exhibitions and meetings; promotional programs in the
media and public extension for introducing the new
technology and its applications
Developing human capital and
specialized labour force (R1)
Resource
Mobilization (R)
Mobilization of financial resources
(R2)
Existence of complementary assets
(R3)
Developing necessary institutions
and required regulations (I1)
Institutionalization
and Legitimation (I)
Formation of advocacy coalitions
and interest groups and their lobby
power (I2)
Promotional and extension activities
(I3)
6. Formation of TIS in Iranian nanotechnology sector
This study, have been done to analyze the emergence and formation of nanotechnology innovation system in
Iran. The research methods that have been used in this study were based on interviews with key experts and
practitioners in this sector and also content analysis of documents and data available in this sector and then a
questionnaire survey for analyzing the current situation of different functions and activities of emerging TIS in
Iran. The conceptual model that developed in the previous section was used to identify and analyze the functions
and activities of nanotechnology TIS in Iran, and based on the dimensions expressed in this model, historical
development and formation path of this innovation system was traced. Almost the first activities related to the
formation of nanotechnology started about one decade ago and around beginning of 2000th. Sequences and
occurrences of the most important actions and events affecting the formation of nanotechnology innovation
system are shown in the table 2. Based on the conceptual model presented in the previous section, each of these
actions or events, indicate one or more functions and activities/sub functions in the innovation system. Thus, all
the important functions and activities in shaping the nanotechnology innovation system in Iran have been
identified and mapped in the historical manner.
Table 2: Historical mapping of main actions and events affecting the formation of Iranian nanotechnology TIS
Actions performed / event occurred
1.
Letter from an Iranian researcher to the President,
emphasized on the necessity of nanotechnology
2.
launching “nanotechnology Studies Committee” at
“Presidential Technology Cooperation Office (PTCO)”
Code of related
Function &
activities
Early
2000th
Time
G1 and I2
I, G
I3
I
Late
2010th
Actions performed / event occurred
3.
4.
Organizing meetings, lectures and conferences
regarding introducing nanotechnology potentials and
applications by PTCO and some ministries and
universities
Publishing nanotechnology Newsletter by PTCO
Code of related
Function &
activities
Time
Early
2000th
G1 and I3
I, G
I3
I
Late
2010th
5.
formation of national "Nanotechnology Development
Special Committee" ( NDSC) by the president
I2
6.
Formation of Secretariat office of NDSC at PTCO and
its widespread activities
I2
I
7.
Special funding for " NDSC" from the government and
progressive growth of this fund annually
R2
R
8.
setting up “nanotechnology working groups” in various
ministries
I2
I
9.
Formation of "Working Group on nanotechnology
infrastructure development" at NDSC
I2
I
10.
Releasing 10-year development plan for the
nanotechnology sector by NDSC
G2
G
11.
formation and growth of the “Network of
nanotechnology labs”
I1 and R3 and D1
I, R, D
12.
launching “Nanotechnology standardization committee
“
I1 and R3
R, I
13.
Formation of the “Network of Nanotechnology firms”
14.
Formation and growth of incubators and technology
parks
R3
15.
Growth of universities and research centers active in
the field of nanotechnology
D1 and R3
16.
Formation and growth of centers for providing
intellectual property services
I1 and R3
17.
providing financial supports by NDSC for university
thesis and long term research in nanotechnology
areas
Growth of university thesis and research related to
nanotechnology
18.
19.
Exponential growth of international publications in the
field of nanotechnology by Iranian researchers
20.
Growth of graduate students active in the field of Nano
21.
University faculty development in the field of Nano
22.
23.
Releasing overall policies and strategies for promotion
and development of nanotechnology by the “Supreme
Revolutionary Cultural Council”
Developing " the second complementary policy
document " for the nanotechnology development by
NDSC with a time horizon of three years
I1 and R3 and D1
I
I, R ,D
R
R ,D
R ,I
R2
R
C1
C
C1
C
D1 and R1
R, D
D1 and R1
R, D
G2 and I2
G2
I, G
G
Actions performed / event occurred
24.
Formation and Growth of the firms active in the field of
nano
25.
Formation and Growth of the number of firms located
at technology incubators (NTBFs) in the
Nanotechnology sector
Entry of new “diversified companies” from other
sectors for exploiting the “niche market”
27.
Growth of International registered patents by Iranian
residents
28.
Growth of specialized seminars and conferences
related to Nanotechnology
29.
26.
Code of related
Function &
activities
Time
Early
2000th
Late
2010th
D1 and E1
D ,E
D1 and E1
D ,E
E1 and M1
E ,M
C1
C
D2 & G1
G ,D
Launching special graduate courses in
Nanotechnology science in several universities
D1 and R3
R ,D
30.
Providing special supports for entrepreneurship and
products offered in specific areas of nanotechnology
G2 and M2
31.
Formation of Iranian "nanotechnology Corridor"
32.
33.
G ,M
I1 and R3 and D1
D, R, I
Formation of “Science and Technology Vice President
(STVP)” and transfer of NDSC to this new position
G2 and I2
I, G
Developing Iranian “national S&T plan” and Emphasis
on "nanotechnology sector" as one of the national
priority areas in S&T field
G2 and I2
I, G
As shown in the table 2, nanotechnology sector in Iran, began with the shaping of "institutional building and
legitimation" function and also partly by functioning "Guidance & direction of the Search". The most important
events of this early period were the formation of national "Nanotechnology Development Special Committee
(NDSC)" and its secretariat office by the president, and developing and releasing 10-year development plan for
the nanotechnology sector by NDSC. These activities, established very powerful institutional infrastructures for
the development of nanotechnology in Iran. Simultaneously, the government mobilized the special financial
resources for NDSC and its Secretariat office to spend in the nanotechnology development and it was an
indication for the formation of “Resource Mobilization” function. As shown in Figure 1, the budget allocated to
NDSC has grown during the past years, but this funding is not enough to answer the growing needs of this sector.
Figure 1: volume and growth of national budget allocated to NDSC (in million $)
Then, after a short period of time, functions "institutional building and legitimation" and "Resource Mobilization"
strengthened and formed in the broader sense, with the formation of activities such as: nanotechnology working
groups set up in various ministries; Formation of "Working Group on nanotechnology infrastructure development"
at NDSC; formation and growth of the “Network of nanotechnology labs” and the “Network of Nanotechnology
firms”; launching Nanotechnology Standardization Committee; formation and growth of incubators and technology
parks in the country; growth of universities and research centers active in the field of nanotechnology; formation
and growth of centers for intellectual property services, and allocation of financial resources to support thesis and
researches in Nanotechnology areas. In the following figures, the growth of “Network of nanotechnology labs”; the
growth of incubators associated with nanotechnology, and the number of universities and research centers active
in the field of nanotechnology, in recent years are shown.
\
Figure 2: number of firms active in “Network of nanotechnology labs”
Figure 3: growth of incubators associated with nanotechnology
Figure 4: number of universities and research centers active in the field of nanotechnology
In the later period, the exponential growth of international publications by Iranian researchers in the field of
nanotechnology; growth of thesis and researches related to nanotechnology and with little delay, growth of
International registered patents by Iranian residents caused the formation of "Knowledge creation and
development" function. Simultaneously, activities such as: growing graduate students active in the field of nano
and increase of specialized human resources in this sector; growth of companies and thus formation of more
specialized value chain; increase in seminars and specialized conferences, and the formation and Growing
network of laboratories and companies; caused the formation and strengthening of "Knowledge diffusion and
development of positive externalities" function. In the following figures, the exponential growth of international
publications by Iranian researchers in the field of nanotechnology; growth of Graduate Students and University
faculty members active in the field of nanotechnology; International registered patents by Iranian residents, and
growth of seminars and specialized conferences, are shown.
Figure 5: exponential growth of international publications by Iranian researchers in the field of nanotechnology
Figure 6: International registered patents by Iranian residents (USPTO)
Figure 7: Graduate Students Active in the field of nanotechnology
Figure 8: University faculty members active in the field of nanotechnology
Figure 9: number of seminars and specialized conferences in the field of nanotechnology
In recent years, with the growth of companies active in the field of nanotechnology; the growing number of firms
located at technology incubators (NTBFs) in the Nanotechnology sector; Entry of new “diversified companies”
from other sectors for exploiting the “niche market”; and providing special supports for entrepreneurship in the
sector, two other functions of TIS "market formation" and "entrepreneurial activities" have been strengthened. In
the following charts, the growth of nanotechnology firms and the growing number of firms located in incubators
are shown.
Figure 10: growth of nanotechnology firms
Figure 11: growth of firms located in incubators active in the field of nanotechnology
At the end of the decade, with the formation of activities such as: launching nanotechnology Corridor; Formation
of “Science and Technology Vice President (STVP)” and transfer of NDSC to this new position, and developing
Iranian “national S&T plan” and Emphasis on the "nanotechnology sector" as one of the national priority areas in
S&T field; it seems that a reinforcing cycle of functions is emerging to stabilize and promote "institutionalization
and legitimation" and " Guidance & direction of the Search".
Figure 12 summarized the historical analysis of formation of different functions of technological innovation system
in the Iranian nanotechnology sector. As it can be seen in this figure, the nanotechnology sector has started with
the formation and functioning of "institutionalization and legitimation" and then has been strengthened by
functioning of "Guidance & direction of the Search" and "Resource Mobilization". After that, functions of
"Knowledge creation and development" and "Knowledge diffusion and development of positive externalities" have
formed. "Market formation" and "entrepreneurial activities" have been Latest functions that were formed in Iranian
nanotechnology sector. At the end of this period of formation of nanotechnology innovation system, the
functioning of "institutionalization and legitimation" and "Guidance & direction of the Search" has been
strengthened again, and this represents a reinforcing cycle of functions in nanotechnology innovation system that
could push it to a higher level innovative performance.
Time
Functions
Early
2000th
Late
2010th
1. Institutionalization and legitimation (I)
2. Guidance & direction of the Search (G)
3. Resource Mobilization (R)
4. Knowledge creation and development (C)
5. Knowledge diffusion and development of positive
externalities (D)
6. Market formation (M)
7. Entrepreneurial activities (E)
Figure 12: historical analysis of formation of different functions of technological innovation system in the Iranian
nanotechnology sector
In this study, a questionnaire survey has been carried out to analyze the current status of different functions and
to identify the causality path of these functions in the Iranian nanotechnology sector. As the research sample, 171
activists from Iranian nanotechnology sector responded to this questionnaire. 35% of these experts were from
industrial companies active in the nanotechnology sector, 40% from academic and research centers and 25%
from policy & supportive institutions of the sector.
A set of indicators and questions in each function and activity of the conceptual model were asked from
nanotechnology activists. By collecting opinions and data requirements, current situation of each function and
activity was identified. Functions of "Guidance & direction of the Search" and "institutionalization and legitimation"
have the best current situation and functions of “Knowledge diffusion and development of positive externalities”
and “Resource Mobilization” have the worst.
Figure 13: current status of each function in nanotechnology TIS based on the survey results
According to the results of factor analysis carried out on the functions and activities of the conceptual model,
importance and relevance of all the activities subset of the functions were determined. Factor analysis results
indicate that, in the function “C”, “C1” and “C2” activities are the most important. Consequently, the "volume and
mode of knowledge creation & development" have had the greatest impact on knowledge creation and
development in Iranian nanotechnology sector. In the function “D” the results indicate that both D1 and D2
activities have relatively equal influence on “D”. In the function “G”, the activity “G1” has the greatest impact and
thus existence of clear visions and expectations about the growth potentials of nanotechnology has had a great
impact on the guidance of new actors to enter this sector. In the function “E”, the degree of successfulness in
technology applications and experiments has had the greatest importance for the formation of entrepreneurship.
Customer groups and their purchasing behavior (M3) is the most effective activity in the formation of function “M”.
In the formation of function “R”, Developing human capital and specialized labour force (R1) and Mobilization of
financial resources (R2) have been the most important activities. And finally, Formation of advocacy coalitions
and interest groups and their lobby power (I2) is the most important factor for the formation of function “I”.
Table 3: Results of factor analysis on the functions and activities of the conceptual model
functions
Activities/ Sub-functions
Knowledge creation &
development (C)
Volume of knowledge creation & development (C1)
mode of knowledge creation & development (C2)
process of knowledge creation & development (C3)
Load
factor1
0.85
0.84
0.63
Formation of division of labour and specialized value chain (D1)
0.64
Information and knowledge flows and spill-over (D2)
0.67
Visions and expectations about the growth potential (G1)
Policy development and priority setting (G2)
Current and complementary businesses (G3)
Mode of entrepreneurship (E1)
experiences in using technology and its applications (E2)
Market size and its growth (M1)
Incentives and inducement mechanisms for market growth (M2)
Customer groups and their purchasing behavior (M3)
0.86
0.73
0.79
0.59
0.7
0.78
0.51
0.91
Knowledge diffusion and
development of positive
externalities (D)
Guidance & direction of
the Search (G)
Entrepreneurial Activities
(E)
Market Formation (M)
1
Based on factor analysis of questionnaire survey: standard load factor based on Maximum Likelihood Method
functions
Load
factor1
0.79
0.79
0.67
0.72
Activities/ Sub-functions
Resource Mobilization (R)
Institutionalization and
Legitimation (I)
Developing human capital and specialized labour force (R1)
Mobilization of financial resources (R2)
Existence of complementary assets (R3)
Developing necessary institutions and required regulations (I1)
Formation of advocacy coalitions and interest groups and their
lobby power (I2)
Promotional and extension activities (I3)
0.88
0.67
Multiple regression method was used to analyze the way in which different functions influence each other. The
final model of these interactions was developed after modification of different causal paths between functions.
This final model begins from the function "I" and then this function has influences on the functions "G" and "R".
After that, the two functions "G" and "R", leading to the formation of functionality of "C", "D" and "M". And finally,
functions "D" and "M" have effect on the functionality of "E".
C
.379
E
.350
R
.267
.242
.559
.481
D
I
.296
.424
.491
.603
.138
M
G
.167
2
Figure 14: The model of causal paths between functions (based on multiple regression method )
7. Conclusion
In this research, a model for the formation of TIS in Iranian nanotechnology sector has been developed. The
research method was based on literature reviews of existing models in the functional analysis of TISs and then a
field study on formation of Iran's nanotechnology sector. This Model involves seven functions and 19 activities.
These functions and activities have different importance and influences on the formation of innovation system in
nanotechnology. It seems that functions "institutionalization and legitimation" and "Guidance & direction of the
Search" have been the most important functions affecting the formation of this TIS.
2
The numbers in this figure representing the coefficient of each path.
Analysis of the Mode of formation in Iran's nanotechnology sector, indicates that the formation of function
"institutionalization and legitimation", and then the functions "Guidance & direction of the Search" and “Resource
Mobilization”, have an important role in the formation other functions of TIS. These three function mainly formed
by the government and hence the role and policies of the government has very important impacts on the
formation of in Iranian nanotechnology TIS. Therefore, the functions and activities that have done by the
government were the main drivers of formation and development of nanotechnology. Hence, these drivers could
be referred as the "Motor of government's pressure and support". It seems that this Motor of formation can be
very influential in the developing countries, because of existence of market and system failures for the formation
of emerging technologies in these countries. For providing the necessary conditions for developing emerging
technologies, the government's role could be consist of “developing required institutions and regulations” and
“creation of a clear vision and plans” as well as “supply and allocation of resources for these technologies”. These
roles will provide suitable conditions for the formation of other functions. Based on the experience of Iranian
nanotechnology development, functions “C” and “D” were formed after the formation of functions “I”, “G” and “R”
by the governmental pressure and support. These functions mainly have been formed by universities and
research centers. Therefore, governmental support and guidance, initially has been lead to motivate and activate
the academic and research actors. It could be approved by the number of international publications, graduate
students, active universities, and seminars and conferences.
This study has shown that, governmental supports on one hand and the development and diffusion of scientific
and research activities at the other hand, leads to the formation of market expansion and entrepreneurial
activities in the nanotechnology sector. Thus, in this stage, the role and activities of the entrepreneurs and
diversified firms and also the growing number of niche markets have been lead to strengthening functions “M”
and “E”. Therefore, the industry sector has a leading role in this stage.
Although the formation of different functions of Iranian nanotechnology TIS have not completed yet, but this study
indicates that after a decade the "Motor of government's pressure and support", has led to formation of many
essential functions of this system. The formation path of functions indicates that a reinforcing cycle will be formed
by strengthening and improving functions related to market and entrepreneurship and it can lead to further
development of Iranian nanotechnology sector.
References:
1) Bergek et al. (2008), Analyzing the functional dynamics of technological innovation systems: A scheme of
analysis, research policy, no 37 pp 407–429.
2) Hekkert M.P, Negro S. (2009), Functions of innovation systems as a framework to understand sustainable
technological change: Empirical evidence for earlier claims, Technological Forecasting & Social Change no
76 pp 584–594.
3) Negro S., Hekkert M.P, (2008), Stimulating renewable energy technologies by innovation policy, Science and
Public Policy, 35(6), pages 403–416.
4) Negro S., Hekkert M.P, (2008), The bumpy road of biomass gasification in the Netherlands: Explaining the
rise and fall of an emerging innovation system, Technological Forecasting & Social Change no 75.
5) Suurs R.A, Hekkert M.P, (2009), Cumulative causation in the formation of a technological innovation system:
The case of biofuels in the Netherlands, Technological Forecasting & Social Change no 76.
6) Suurs R.A, Hekkert M.P, (2009), Competition between first and second generation technologies: Lessons
from the formation of a biofuels innovation system in the Netherlands, Energy 34.
7) Hekkert M.P et al. (2007), Functions of innovation systems: A new approach for analyzing technological
change, Technological Forecasting & Social Change, no 74 pp 413–432.
8) Alphen & Hekkert (2009), The performance of the Norwegian carbon dioxide, capture and storage innovation
system, Energy Policy No 37 PP 43–55.
9) Alphen & Hekkert (2009), Comparing the development and deployment of carbon capture an storage
technologies in Norway, the Netherlands, Australia, Canada and the United States– An innovation system
perspective, Energy Procedia 1, PP 4591–4599.
10) Jacobsson (2008), The emergence and troubled growth of a ‘biopower’ innovation system in Sweden, Energy
Policy No 36 PP 1491–1508.
11) Markard & Truffer (2008), Technological innovation systems and the multi-level perspective: Towards an
integrated framework, Research Policy No 37 PP 596–615.
12) Bergek, A. and Jacobsson, S. (2004), Transforming the Energy Sector: The Evolution of Technological
Systems in Renewable Energy Technology, industrial and corporate change, Vol 13, No 5.
13) Carlsson, B. & Jacobsson, S. (2004): Dynamics of Innovation Systems – Policy-Making in a Complex and
Non-Deterministic World”, Paper presented at the “International Workshop of Functions in Innovation
Systems” at the University of Utrecht, June 23-24th 2004, Utrecht, the Netherlands.
14) Jacobsson, Bergek (2004), Transforming the energy sector: the evolution of technological systems in
renewable energy technology, Ind. Corp. Change 13 (5) 815–849.
15) Negro S.O., Hekkert M.P., Smits R.E., (2007), Explaining the failure of the Dutch innovation system for
biomass digestion — a functional analysis, Energy Policy 35 925–938.
16) Bergek et al. (2005), ANALYZING THE DYNAMICS AND FUNCTIONALITY OF SIS – A MANUAL, Paper
presented at the DRUID Tenth Anniversary Summer Conference.
17) Bergek, A. (2002): Shaping and Exploiting Technological Opportunities: The Case of Renewable Energy
Technology in Sweden. Department of Industrial Dynamics.
18) Chalmers University of Technology, Göteborg.
19) Bergek, A., Berggren, C., and Tell, F. (2004): Do innovation strategies matter? A comparison of two electrotechnical corporations 1988-1998. Paper presented at the Schumpeter conference, Milano, June 2004 2004.
20) Bergek, A. and Jacobsson, S. (2003): The Emergence of a Growth Industry: A Comparative Analysis of the
German, Dutch and Swedish Wind Turbine Industries. Metcalfe, S. & Cantner, U.: Change, Transformation
and Development. Physica-Verlag, Heidelberg, pp. 197-227.
21) Edquist charles, Hommen leif (1999), Systems of innovation: theory and Policy for the demand
Side,Technology in Society, 21,63-79.
22) Johnson B., Edquist C., Lundvall B. (2003), Economic Development and National Systems of Innovation
Approach, First Globelics Conference.
23) Edquist C. (2000), Innovation Policy – A Systemic Approach, Oxford University Press.
24) Johnson Anna (2000), Functions in Innovation System Approaches, Allaborg University.
25) OECD (1999), Managing National Innovation Systems, OECD.
26) Freeman, C. (1987), Technology policy and economic performance: Lessons from Japan, London, Pinter
Publishers.
27) Lundvall, B-Å. (ed.) (1992), National Systems of Innovation: Towards a Theory of Innovation and Interactive
Learning, London: Pinter Publishers.
28) Nelson, Richard R. (ed.) (1993), National Systems of Innovation: A comparative Study, Oxford, Oxford
University Press.
29) Edquist, C. (editor) (1997), Systems of Innovation: Technologies, Institutions and Organizations, Pinter
Publishers/Cassell Academic, London.
30) Breschi, S. and Malerba, F. (1997), ‘Sectoral innovation systems’, Edquist, C. (ed.), Systems of innovation:
Technologies, institutions and organizations, London, Pinter Publishers.
31) Malerba, F. (2004), Sectoral Systems of Innovation: Concepts, Issues and Analyses of Six Major Sectors in
Europe, Cambridge University Press.
32) Cooke, P. and Morgan, K (1994), ‘The Creative Milieu: A Regional Perspective on Innovation’. The Handbook
of Industrial Innovation. In M. a. R. Dodgson, R. Aldershot, Edward Elgar.
33) Cooke P, Uranga MG (1998), Etxebarria G. Regional systems of innovation: an evolutionary perspective.
Environment and Planning A; 30:1563–84.
34) Carlsson, B. and Stankievicz, R. (1991), ‘On the Nature, Function, and Composition of Technological
Systems’. Journal of Evolutionary Economics, 1(2): 93-118.
35) Carlsson, B. (1994), ‘Technological Systems and Economic Performance’. The Handbook of Industrial
Innovation. In M. a. R. Dodgson, R. Aldershot, Edward Elgar.
36) Ørstavik et al, (1997) , Institutional mapping of the Norwegian national system of innovation, STEP group.
37) Malerba, F. (2002), Sectoral systems of innovation and production, Research Policy 31, 247–264.
38) Liu X., White S. (2001), Comparing innovation systems: a framework and application to China's transitional
context, Res. Policy 30 (7) 1091–1114.
39) Lundvall, B.-Å. (2005), National innovation systems - analytical concept and development tool, DRUID Tenth
Anniversary Summer Conference.
40) Edquist, C. (2006), ‘Systems of Innovation: Perspectives and Challenges’, in Fagerberg, J., D. Mowery and
R.R. Nelson (eds.), The Oxford Handbook of Innovation, Norfolk, Oxford University Press.