The aim of this paper is to discuss the role of various socioeconomic actors in the diffusion of knowledge in localised economies of small and medium sized economics SMEs. The ability of industrial districts to diffuse knowledge quickly and effectively is frequently mentioned as their major advantage, but the actual process has still to be explored. Issues such as the characteristics of localised economies and the relationship between information flow and knowledge diffusion are discussed. A sample of thirty entrepreneurs was contacted and interviewed in Kastoria, a major furcoat production area and Greece's only authentic industrial district. Major findings suggest that the information needs of SMEs have changed in favour of more external and formal information. The role of various local socioeconomic organisations is subsequently becoming more important in the diffusion and creation of knowledge. Policy implications include the creation of a regional network between all the local actors in the form of a discussion forum, the development of an information centre, the increased use of information technologies, the employment of a specialised workforce from outside the district, and the introduction of training programmes.
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