ABSTRACT
The relationship between firms’ success, innovation and the use of external technological resources, and localization of economic development are themes currently being explored in the academic literature. The connection between them is clear. It is that as technological knowledge and information are key factors of production, their acquisition from external sources enhances firms’ profitability, and that processes by which they are transferred are more effective when localized. Therefore, the economic performance of regions can be improved when firms are encouraged to become better innovators by interacting both with institutions such as universities and government laboratories and with other firms within their region. Thus the organizing power of proximity can be augmented by technology transfer support from the local institutional framework.
