`This book is remarkable for several reasons. It provides highly relevant empirical analysis into a fundamental but under-researched area, namely medium technology industries. It proposes a new theoretical approach which builds on cognitive economics to explain how innovation in these industries is generated by interactive learning. It develops important policy implications based on the concept of governance. In doing so, the authors of this book are able to successfully blend together micro to macro levels of analysis as well as regional and industrial economics with public policy. The book should be carefully read by economists and social scientists, policy makers and businessmen interested in innovation at the regional level.' - Luigi Orsenigo, University of Brescia and Bocconi University, Italy This book explores the distinct nature of innovation in medium technology industrial sectors - which are the key to European international competitiveness - and examines the recent changes of networks within regional clusters. The authors present best-practice management and regional strategies, and develop an original and coherent theoretical framework for the analysis of innovation processes called `Territorial Knowledge Management'. They concentrate on the territorial dimension and the cognitive economics approach, and go beyond the traditional focus on R&D in high-tech sectors. The pivotal role of intermediate institutions in the governance of modern co-ordinated market economies is also highlighted. Working towards defining new guidelines for creating networks of competence centers and removing barriers to the enlargement of knowledge and innovation networks in Europe, this book will prove an enlightening read for those with an interest in postgraduate level management and innovation studies. Management and policy-making practitioners at both the regional and European level will also find much to interest them.