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Many scholars have studied various sectoral innovation systems that are categorized as mass-produced goods, whereas there are only a few previous studies that have investigated complex product systems (CoPS). CoPS are defined as high-cost, engineering, and software-intensive goods, systems, networks, infrastructure, engineering constructs, and services. However, many differences between these two categories of industries have been reported by a large number of scholars. To address this shortcoming, this paper intends to study the evolution of Iran’s gas turbine sectoral innovation system as a CoPS industry. To this end, a qualitative approach and a case study research design were employed. To do this, we conducted 17 in-depth interviews, participated in different conferences and conventions, as well as studied various documents as secondary data. Our findings suggest that: firstly, technological capabilities in Iranian gas turbine producers have evolved from assembling to manufacturing, and re-designing existing gas turbines; Secondly, diverse and dynamic governmental policies associated with the gas turbine industry over the last two decades have played a key role in encouraging domestic firms to acquire technological capabilities; and thirdly, the large and growing domestic market not only justified investing in R&amp;D and building infrastructure by the government but also contributed to improved interaction and collaboration between domestic and overseas’ companies. As the main policy implication, our paper suggests that the transition from product-using to product-manufacturing in CoPS industries is not an automatic process. It is important to design the corresponding policies and institutional arrangements following the evolving technological capabilities and demand conditions. Finally, this paper has contributed to sectoral innovation systems and CoPS literature by shedding light on the evolution of the gas turbine industry as CoPS in the context of Iran as a developing country with some restrictions in global technology collaborations.

Evolution of Iran’s gas turbine sectoral innovation system as a complex product system (CoPS)