76 Copyright © 2016, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 5 DOI: 10.4018/978-1-5225-0021-6.ch005 ABSTRACT Following Nelson’s primary typology of enterprises based on a characterization of their technical change process (bulk commodities; complex systems producers; and chemical products producers) this chapter presents a case study on the innovation difusion in the European tile industry based on the analysis of its manufacturing process and supply chain. The producers of ceramic tiles, the machinery produc- ers and the frits and glazes producers it each of Nelson’s categories. Further, the European ceramic tile industry is clustered in two southern European regions: Emilia Romagna (Sassuolo – Italy) and Valencia Region (Castelló de la Plana – Spain) with a diferent coniguration of the type of predominant companies within the cluster but also regarding surrounding clusters. This relative specialization, the interactions between surrounding clusters, and the strong interlink supplier-producer between both ceramic tile clusters make the study of the innovation difusion in the European ceramic tile industry supply chain an interesting case. INTRODUCTION Ceramic tile production despite having a highly integrated production process it certainly matches Nelson’s (1993) primary typology of enterprises. Nelson distinguishes three types of industries (bulk commodities; complex systems producers; and chemical products producers) based on a characteriza- tion of their technical change process. The producers of ceramic tiles, the machinery producers and the frits and glazes producers fit each of those categories. Further, another characteristic of the European ceramic tile industry is that it is strongly clustered in two southern European regions: Emilia Romagna Innovation Diffusion in the European Ceramic Tile Industry Supply Chain Daniel Gabaldón-Estevan University of Valencia, Spain