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This paper explores the experience of the University of Aveiro in attempting to promote a favourable environment for innovation in the Portuguese industrial region in which it is located. The authors first discuss the barriers faced by peripheral regions in their attempts to establish the continuous interactive process that feeds innovation. They then highlight the role played in such regions by higher education institutions (HEIs) as the main sources of knowledge, and as crucial agents in fostering the social learning processes needed to sustain regional competitiveness. Against this background, the organizational challenges and requirements associated with the role of HEIs in peripheral regions are explored. Finally, the authors emphasize the need for specifically designed intermediate structures linking academia and society and, using the case of Aveiro, examine the process of institutional innovation and learning.

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