ABSTRACT
Networks of actors in an area are made up by a certain configuration of actors, relationships and resources involving certain activities. Two types of innovative networks can be distinguished within the context of the milieu: the territorial networks and the industrial networks. Government policies could focus on diminishing barriers and/or bottlenecks in physical elements, or the opposite: strengthening them for some time to stimulate interaction among local actors. Governments – local, regional, national and supranational – can play a stimulating role on the demand side by means of government spending and regulation. Changes in the physical elements may be important improvements in the innovation stimulating determinants. However, improved infrastructure and telecommunication facilities in many cases render the need for geographical concentration redundant, allowing networks to develop in economic space. It enables actors to locate their production closer to markets or – the opposite – centralize production in order to reach scale effects.
