The need for modernisation of university organisation and governance w ould be an example of such a failure. Rather, a key role for state policy making is bottleneck analysis to identify and rectify structural imperfections (Arnold et al., The balance among different system components needs to be appropriate and the policies need to be mutually consistent. For example, there must be some consistency between the thematic focus of innovation/industry policy and at least part of the national research effort. This is why coordination is an important aspect of innovation system governance. At best, it can be co-ordinated to some degree.