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This paper examines the changing nature of knowledge-based innovation systems in light of the dynamic interconnections between the university, industry and government. Industries have to assess in what way and to what extent they decide to internalize R&D functions. Universities position themselves in markets, both regionally and globally. Governments make informed trade-offs between investments in industrial policies, S&T policies, and/or delicate and balanced interventions at the structural level. Such policies can be expected to be successful insofar as one can anticipate and/or follow trends according to the dynamics of the new technologies in their different phases. The evolutionary perspective in economics can be complemented with a turn towards reflexivity in sociology in order to obtain a richer understanding of how the overlay of communications in university-industrygovernment relations reshapes the systems of innovations that are currently subjects of debate, policy-making, and scientific study.
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