The role of Higher Education Institutions (HEIs) in society has been intensely debated and has usually re-emerged when HEIs are going through difficult times. The role that HEIs play within their societal environment will depend, among other factors, on the specific characteristics of the region in which they are located. Each region has to face different challenges framed by a different history and culture, and HEIs therefore follow different development patterns. HEIs have to respond as well to global changes and challenges. Therefore, their role has to be analysed in relation to their immediate environment, while also taking into consideration the institutions and organisations that surround it. In this contribution, I focus on the changing role of the HEIs in a local environment characterized by a high presence of small and medium firms from a specific traditional industry (a geographical space traditionally termed as an industrial district or cluster). To study this evolution, the research will address two main questions. First, how local HEIs are responding to the changes in the local and global environment; and secondly, how the local demand (mainly from the industrial sector) for knowledge is evolving. Answering these two questions requires the integration of two different fields of study: the analysis of the changing role of the HEIs and the study of the dynamics of knowledge generation and dissemination within specific local contexts.