The innovation system approach shows growing presence in the debate about the determinants of innovation, and has

relevant implications on innovation policy. This approach identifies the agents and its connexions in different contexts such as territories, sectors or technologies allowing an improved understanding on how innovation processes function. However, often that

boundary may not be the appropriate unit of analysis for studying the most significant relationships regarding innovation in certain

contexts such as industrial districts. The industrial district approach, on the other hand, offers the appropriate unit of analysis for studying the relevant relations. However, for this approach innovation has not been of central focus. We therefore propose the Distritual Innovation System that merges the innovation system approach, where learning by interacting is central, and the main elements of the industrial district concept. This new conceptual proposal draws various conclusions on and has implications for the debate on the processes of innovation.