Innovation is often understood as merely the capacity to create new knowledge and commercialise it successfully. This is because traditionally, the focus of innovation policy has been more on the ability of places to develop and exploit new knowledge locally, and less on their capacity to access, anchor, or diffuse new knowledge acquired from elsewhere. This is despite the fact that most innovation happens by absorption. While domestic knowledge creation and exploitation are very important for local innovation system, external knowledge in the making of local capacity must not assume a secondary role for public policymakers.
This report presents preliminary results of a NESTA research project looking at mapping and measuring innovation by absorption. It introduces a new conceptual framework coined AC/DC, which stands for Absorptive Capacity/Development Capacity.