Increasing university-industry interaction and university contribution to the local economy are compatible ?conventional wisdom would say. However, as other university activities, interaction with industry may be limited due to a lack of absorptive capacity in local firms. The data of those participating in the European Union?s 6th R&D Framework Programme (FP6) was used to obtain values for the number and, notably, the budgets of UII projects at regional level for the EU27. Two types of interactions were considered: inside and outside the region. Our analysis indicates that universities from regions with low absorptive capacity participate more often in FP6 projects with firms outside the region. Our results highlight the value of policies that facilitate firm R&D to enhance collaboration with regional universities.