ABSTRACT
A study of the relationships between large corporations and innovative small and medium-sized firms or high-technology sub-contractors as vertical links. Dualistic theory often erroneously conflates the small unit and small firm, thus overlooking the strategy of corporate deconcentration, the breakdown of large firms into small units, and their very real control over innovative small firms. This chapter studies local innovations in the light of the relationships between small firms and larger corporations. It specifies the kind of regional development that is linked to the present restructuring of the productive system, bearing in mind that the greatest mobilization of local resources does not inevitably signify a more independent regional development capacity, but the reverse. The chapter attempts to delineate the kind of relationships between corporations and small firms in the innovative process in order to explain the exact nature of recent regional development in particular areas.
