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Modern economies can be characterised as 'learning economies' in which knowledge is the crucial resource and learning is the most important process. Different kinds of learning and economically relevant types of knowledge can likewise be identified. It is argued that pure market economies, if such existed, would have severe problems in terms of learning and innovation. The 'learning economy' is a mixed economy in a fundamental sense.

The authors have worked on innovation systems for more than a decade. This paper is an attempt to take stock. In section 2 we reflect upon the emergence and fairly rapid diffusion of the concept 'national system of innovation' as well as related concepts. In section 3 we describe how the Aalborg version of the concept evolved by a combination of ideas that moved from production structure towards including all elements and relationships contributing to innovation and competence building. In section 4 we discuss the challenges involved both in a theoretical deepening of a fairly narrow version of the concept and in the movement toward the broader approach and in adapting the concept for the analysis of poor countries.

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