12. Relation of Company and Innovation in National Innovation System

The national innovation system is defined as a network of public and private sectors that initiate, import, modify, and distribute new technologies, activities, and interactions. These interactions constitute the structure of the system and are shaped by culture, norms, institutional arrangements, and public policies. They are the primary innovative actors in the innovation process as companies are eager to seek, accumulate, and retain innovative talents. However, firms’ ability to innovate is influenced by interactions with a wide range of external organizations, government and private actors, suppliers, customers, and markets. As the state is responsible for providing infrastructure and creating an appropriate institutional platform for exchange and dissemination of information, it has an important role to stimulate the capabilities of firms. The national innovation system emerges in different fields including social sciences or engineering, and is used by policy makers. The components of innovation vary from country to country, and these differences can be explained by systemic characteristics. These differences in economic and institutional structure are reflected in the ratstructure are reflected in

tion. According to the national innovation system, the innovation ability of a firm depends on the factors including the quality of the national education system, the industrial relations, the quality of technical and scientific organizations, government policies, cultural traditions, and the interactions between them. In this paper, the most important variable affecting a national innovation system which is the firm variable will be discussed. Additionally, theoretical foundations on the interaction between firms, research and development (R&D), and innovation will be provided.