AbstractMany executives in industry as well as decision makers in politics, see technology transfer and innovation as a linear and rather technical process. The authors emphasize the strong social linkage of these technological processes, as well as their implementation in networks on a regional level. Following the well‐known ‘chain linked model of innovation’ (Kline/Rosenberg) and recent efforts in network theory, they recommend a broader understanding of the processes and changes involved in innovation. Finally they give two examples of regionally successful arrangements for government‐industry cooperation, hence enhancing the benefits of modernization policies.