A technological system is defined as: <blockquote>… networks of agents interacting in a specific tech- nology area under a particular institutional infras- tructure to generate, diffuse and utilize technology. Technological systems are defined in terms of knowledge or competence flows rather than flows of ordinary goods and services. They consist of dynamic knowledge and competence networks (Carlsson and Stankiewicz, 1991, p. 111)</blockquote>
Negro and Hekkert discussed seven functions of innovation systems in a model that seems to be driven by free market ideals. The first function entrepreneurial activities can be cast as more agent or creative based.