The dissemination of knowledge in industrial districts (ID) and clusters has often been linked to the existence of a specific tacit knowledge. Thus, the companies belonging to the ID?s specialization sector might sustain a distinctive competitive advantage against isolated firms. However, the technological changes in recent decades, and the presence of ID whose technological intensity has dramatically increased in the same period, suggest the existence and the need of codified knowledge in these agglomerations. As a result of a decline of tacit knowledge, the economic performance of ID could move backwards, since it would be easier for competitor firms, located in non district areas, to imitate and reproduce their contextual knowledge. The paper discusses the above assumptions, suggesting the existence of combinations/hybridizations of both types of knowledge in ID, which we have named locational-translational knowledge. This third type of knowledge could explain the continuity of ID?s contextual advantages even in presence of higher doses of codified knowledge. The explanation would require the presence of agents acting as interfaces able to absorb new pieces of codified knowledge, in order to combine them with local knowledge, thus fitting the specific needs of ID. However, this possible way can experiment some difficulties. Concretely, we argue the existence of several constraints, such as the size of a 'district?s creative market? in the ID, which may need its opening to knowledge imported from academic institutions and other formal research centers, in contrast with the apparent autarky or isolation suggested by the tacit knowledge. Finally, an analysis of the ID evolution has enable to appreciate that the process of absorption, combination and dissemination of external knowledge has existed throughout the ID life cycle although supported, at each stage, by different institutional agents: the impannatore, the cappofiliera firm, the mid-open innovation process and, lastly, the formal knowledge from research oriented institutions such as the above referred (virtual districts).