When Does a National Innovation System Start to Exhibit Systemic Behavior?

Despite the diversity of national profiles, the relationship between R&D structure and industrial structure, amongst others, is considered a crucial determinant of a country's national innovation system (NIS). This paper aims at investigating the systematic relationship between the two structures with respect to the portfolio of resource allocation. By proposing some operational definitions of R&D structure and industrial structure, a comparative analysis is conducted for the national profiles of OECD member economies. The correlation analysis reveals that, in an overall sense, there exists significant correlation between the two structures and the degree of correlation has increased over time, indicating that the linkage between innovation policy and industrial policy has become closer. Most interestingly, it is found that there may exist a threshold value of national R&D investment to GDP, around 2 percent, that makes the correlation between R&D structure and industrial structure significant. This threshold is the time point when R&D starts to exercise systematic effects on industrial structure and thus NIS starts to behave like a system.