Abstract
This study analyses the relation between innovation in industrial SMEs and cooperation with key players in the field of innovation in the context of an innovation system set up in the Basque Country. The empirical information used in the study is from samples of microdata taken from the Company Innovation Survey 2008 regarding 650 industrial SMEs in the Basque Country, and from 12 interviews conducted with important operators in the Regional Innovation System. The study demonstrates a positive relation between government policies on technology, the innovation carried out by companies, cooperation between the different participants and the subsidies that they receive
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