National economies and business ecosystems do not function in isolation, but are open to global pressures and interactions. While policy-makers can intervene more or less directly to improve ‘internal’ factors (i.e. internal market demand, business culture, company system, education and research, political system, financial system, legal, regulatory and fiscal system and some others) it is much more difficult to exert an influence on global factors (i.e. global demand, international mobility and knowledge flows, sectoral trade patterns, policy and regulatory environment of exporting countries and main competitors, structure and dynamics of global value chains and some others).

This calls for an expansion of the traditional national innovation system concept towards a model which recognises the interdependencies between a national (or regional) system and other global technological and sectoral systems. The open innovation system concept starts retains the emphasis on well-functioning inter-linkages between the core elements of the national innovation system (the darker blue central blocks in the diagram above) and then adds an external dimension represented by the outer set of light blue blocks. The international components of the system include global market trends and demand, sectoral trade patterns, collaboration and positioning in value chains and international R&D networks, foreign direct investment, as well as policy and regulatory environment of countries to export and main competitors. Export-driven growth that is based on innovative business activities is highly dependent on inward and outward flows of knowledge and ideas, hence mobility of people and supportive frameworks that facilitate knowledge circulation are critical. Last but not least, the availability of renewable and non-renewable resources is a main trigger behind a range of geo-political developments and impact on national competitiveness.