Learning Economies, Innovation Systems and European Integration Birgitte Gregersen and Björn Johnson Department of Business Studies Aalborg University DRAFT November 22, 1996 (To be published in Regional Studies) Abstract This paper uses the ‘learning economy’ as an analytical framework to discuss how the process of European integration affects National Systems of Innovation. European integration is described as a process of institutional learning. It is argued that European integration will not do away with national systems of innovation in Europe and that only a very partial European System of Innovation in a narrow sense of the term is likely to emerge in the not too distant future. Learning Economy European Integration National Systems of Innovation INTRODUCTION The process of European integration affects the economic, political and social development in Europe in many different ways. The purpose of this paper is to pose the question of how it might affect innovation activities. More specifically, we will make three points. First, we suggest that the nation state still is a relevant level of analysis in the systems of innovation approach. Second, we propose that European integration may be described as a process of institutional learning, which will inevitably affect the national systems of innovation in Europe. Last, we argue that European integration will not do away with national systems of innovation in Europe and that only a very partial European system of innovation in a narrow sense of the term is likely to emerge in the not too distant future. One of the main links between integration and innovation goes through institutions. Institutions in the sense of “common habits, routines, established practices, rules or laws that regulate the relations and interactions between individuals and groups” (EDQUIST and JOHNSON, 1997) shape the interactive learning processes in the economy. They affect the creation, storing, distribution, use and destruction of knowledge since they shape the cognition, the visions, and the patterns of communication and interaction of economic agents. Integration changes the institutional set up of the economies participating in the process and hence it affects the process of learning and innovation. Furthermore, the character of the institutional link is profoundly affected by the fact that the integration process is going on between learning economies in which knowledge has become the most important resource and learning the most important process (LUNDVALL and JOHNSON, 1994). In this article we