NATIONAL SYSTEMS OF INNOVATION UNDER STRAIN: THE INTERNATIONALISATION OF CORPORATE R & D by

Press (forthcoming). It is based on research funding from the EC-TSER programme (SOE1-CT95-1006) of the European Union. We thank John Cantwell for his comments on an earlier draft. The responsibility for the final version is our own. 2SUMMARY The central components of national systems of innovation in the advanced OECD countries are the innovative activities performed by practitioners (mainly businesses), and the basic research and related training performed by universities. The close linkages observed between the national science base and innovative activities in nationally owned firms reflect the advantages of physical agglomeration in innovative activities, and allow companies and countries to extract major economic benefits from their investments. However, national systems of innovation are under increasing strain, because of emerging imbalances between what the science base has to offer, and the demands of the technology system. These imbalances reflect the combined effects of (1) th