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This chapter provides an insight into the nature of inter-Small and Medium Sized Enterprise (SME) linkages in high-technology milieux, and their effects on the innovative activity and productivity of local firms from both a theoretical and empirical standpoint. It presents interpretative results on the role played by vertical inter-SME links in factor productivity: labour productivity increases with institutional and organisational proximity to customers. The chapter also presents a more interpretative analysis of the role inter-SME links play in enhancing the innovative activity of firms. Innovative milieux are distinguished from simple agglomeration of economic activities by close inter-firm relations. An innovative milieu is defined as a set of relationships within a localised territory, encompassing in a coherent way a production system, different economic and social actors, a specific culture, a representational system, and generating a dynamic process of collective learning. The GREMI milieux innovateurs approach provides a dynamic interpretation of customer-supplier relationships based on the economic importance of cooperation and continuity.
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