The paper discusses whether local development is still a policy instrument in a globalized world. Territories throughout the world are experiencing greater international competition, and respond by using local resources in an innovative way. Their effectiveness faces important challenges, such as compatibility of goals, innovation, interaction of the forces of development, and strengthening of institutions. What can be learned from local experiences? How does the local actors' participation in local development policies improve results? How can local productive systems compete within the global markets? The cornerstones are institutional change, agreement among the local actors, networks, innovation, entrepreneurship and resilience.