Learning objective

After reading the component you will have a better understanding of what are the main innovation assets and agents at local level and what are the benefits they bring for local economy and development. You will learn what are the key aspects of local innovation systems and what are the benefits it brings to local communities. The component describes the various types of companies that are established in smaller local communities and their innovative potential. You will learn about the importance that local business support and regional development agencies have in supporting micro companies in finding the most suitable path towards developing and exploiting their innovation endeavours. It will take about 30 minutes to read and discuss this component.


Innovation and Local Development are considered as two notions which are closely related to each other. A key to prosperity in local environments is increasing productivity. The growth of productivity is the basis for increasing salaries of employees, increasing profits for local businesses, and ultimately increasing the domestic product of a region. In the heart of increasing productivity lies innovation. Innovation is a place based and a social process that involves local business resources which is presented mostly by micro companies as the motor of economic development and the main innovative asset of communities. In this context EU policy is focused on providing a favourable environment for those local resources (SMEs and people) to invest in competitiveness and innovations for achieving sustainability.

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