The national system of innovation in which a firm is embedded matters greatly, since it strongly influences both the direction and the vigour of its own innovative activities. This includes national market incentives and pressures to which firms have to respond. Which of the following is not a significant incentive?
A) Local production input prices, where international differences can help generate very different pressures for innovation.
B) Local (private and public) investment activities, which create innovative opportunities for local suppliers.
C) Local skills and knowledge.
D) Local natural resources, which create opportunities for innovation in both upstream extraction and downstream processing.

Question

Quizplus · Accepted Answer

Local skills and knowledge are crucial components that drive innovation within a firm, as they directly contribute to the firm's innovative capabilities rather than serving as an external incentive.

The National System of Innovation in Which a Firm Is