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It has long been recognised that the innovative and entrepreneurial capabilities of the small medium-sized enterprise (SME) sector can make an important contribution to the commercialisation of emerging technologies. In their role as centres of expertise and originators of new technical knowledge, universities are vital contributors to this process. Understanding the nature of relationships between universities and SMEs is therefore important, particularly in view of the fact that current theories on regional development suggest that concentrations of SMEs in certain regions, clustered around one or more university centres, can be effective locations for accelerating this process. As a counter to regional development theory, an alternative viewpoint is that the way emerging industries develop is affected more by the dynamics of industry life-cycles. The opto-electronics sector, which is characterised by regional clusters in the UK and USA, offers lessons for how SMEs and universities interact against a backdrop of these theories.
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