In our understanding, an innovation system is a parallelly running “exploration (sub)system,” which is part of the overall organization design of an organization. Such a complementary second system is vital because most organization designs are only geared towards exploitation, i.e., running the established business, and may cease to exit due to a failure to renew eventually.
Today, enabled by digital technologies, modern forms of “organizations as marketplaces” do emerge, which might make the need for parallel operating systems obsolete. Examples are Haier’s Rendanheyi (“Ren” (employees) + “Dan” (user needs) + “Heyi” (integration)) or Amazon’s small teams and APIs-first organizational model. But for most established companies, the notion of having two systems under one roof is already very “radical and new” ever since Robert Duncan described this necessity in the 70s [sīc].