51 International Journal of Innovation Management Vol. 4, No. 1 (March 2000) pp. 51–75 © Imperial College Press UNDERSTANDING RELATIONSHIPS BETWEEN UNIVERSITIES AND SMEs IN EMERGING HIGH TECHNOLOGY INDUSTRIES: THE CASE OF OPTO-ELECTRONICS CHRIS HENDRY City University Business School, Barbican Centre, London EC2Y 8HB e-mail: c.n.hendry@city.ac.uk JAMES BROWN City University Business School, Barbican Centre, London EC2Y 8HB e-mail: j.e.brown@city.ac.uk ROBERT DEFILLIPPI Suffolk University, Beacon Hill, Boston MA 02108-2770, USA e-mail: rdefilli@hotmail.com Received 3 June 1999 Revised 29 February 2000 Accepted 1 March 2000 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 commer- cialisation 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, particu- larly in view of the fact that current theories on regional development suggest that concen- trations 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,