Innovation Networks in Economics From the Incentive-based to the Knowledge-based Approaches by Andreas Pyka November 1999 INRA-SERD, Université Pieres Mendés, France F-38040 Grenoble, Cedéx 9 ph. +33 476 82 83 37, fax: +33 476 82 54 55, e-mail: pyka@grenoble.inra.fr Key-words: Innovation Networks, Evolutionary Economics, Knowledge Abstract: Innovation networks have become a persistent organisational phenomenon in industrial innovation processes. However, in economics they were considered in the first place only as a temporary phenomenon between markets and a hierarchical organisation within a single firm. The main focus of traditional neo-classical analysis simply was on cost reduction of R&D within a network. Only with the coming up of evolutionary economics with its prevailing knowledge orientation also learning and synergistic partnering move in the centre of interest. Without a consideration of the roles true uncertainty, heterogeneity as well as the historical character of time play in innovation, networks cannot be explained as a self- organisational persistent phenomenon. The present paper wants to bring together different strands of the new theory of innovation and develop an evolutionary theory of innovation networks.