The Evolution and Co-evolution of Technological Capabilities, Government Policies and Market Structure in Iran’s Gas Turbine Industry

Each sectoral system of innovation consists of its particular knowledge base and technology, institutions and policies and market structure. In addition, these components evolve and have co-evolution with each other based on specific patterns. Analyzing evolution and co-evolution sectoral systems of innovation especially in developing countries can lead to rewarding implications for both policy and management. Therefore, this paper aims at investigating the evolution and co-evolution of Iran’s gas turbine sectoral system of innovation by employing a qualitative approach and case study strategy. This research found that, existence of large local demand and market in different industrial sectors can be account as appropriate opportunity for local firms to acquire necessary technological capabilities, if policymakers look at this situation as a good opportunities to design and implement intelligent policies in terms of public procurements, investing in R&D and developing infrastructures and facilitating collaboration with foreign companies in order to accelerate accumulation of technological capabilities in domestic firms.