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The manner in which innovation takes places follows a systematic manner. Scholars have over the years developed models to explain the manner in which innovation takes place. They have identified two models which they refer to as modes of innovation i.e. the STI mode of innovation and the DUI mode of innovation. These two modes of innovation draw from the four types of knowledge i.e. the know-what, know-why, know-how and know-who. Understanding these two modes of innovation, their strengths and weaknesses, is important to development of the national system of innovation. From this analysis the government can establish which mode is the most suitable for a particular sector of the economy. Organizations can also identify the suitable mode for innovation and knowledge management. For example, performance-oriented organizations would be suited to innovate using the STI mode of innovation while learning organizations will be more suited with DUI mode of innovation. This essay, therefore, presents an analysis of the STI and DUI modes of innovation, the merits and demerits they accrue to the UK System of Innovation

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