Abstract
Inter-organizational networks are a resource-saving and risk-sharing strategy, especially in the field of innovation and for Small and Medium Enterprises (SMEs). The study investigates the role of innovation in interfirm linkages by combining a theoretical approach with an empirical case study. We link the concept of ‘Regional Innovation System’ (RIS) with the concept of ‘embeddedness’. Starting from a network analysis of SMEs in the autonomous province of Bolzano – South Tyrol (Italy), the analysis shows that, in the field of innovation, relations are not based purely on a market logic and that the linkages between firms, institutions and research institutes are not enough to be innovative; rather, a RIS is part of a particular social system, where the relational and social aspects of embeddedness and trust are of foremost significance.