This paper analyses the effects of geography on innovation by small and medium sized enterprises in the South-West and South-East regions of Ireland. Using an augmented innovation production function it estimates, both directly and indirectly, the effects of interaction with geographically proximate external agents and agglomeration economies on product and process innovation in these enterprises. The
findings question the premise that geography matters for innovation in the Irish case. There is little evidence that local/regional interaction is more important for innovation
and the close availability of a skilled labour pool and a range of urbanization indicators have no effect
