Technological globalisation or national systems of innovation?

Technological innovation is said to be breaking down borders. The internet, the explosion of globalised financial markets, the increased foreign direct investment by transnational corporations—all are portrayed as creating a global market in which the nation state is little more than an anachronism. And yet some economies have been more innovative and dynamic than others, and there seems no reason to believe that these differences in national economic performance will become a thing of the past. On the contrary, with a global market, any competitive advantage will bring larger rewards. So government action to enhance firms' competitive advantage becomes more important, not less. It is within this context that technological globalisation is analysed in this paper. The question is whether such globalisation spells the end of the nation state. The answer is no.