This paper has analyzed and identified the spatial determinants of innovative activities, based upon 165 municipal data and capitalizing on spatial econometric techniques. The number of researchers have been considered as an essential spatial determinant of innovative activities regardless of any types of regions. In the Capital region, the spatial concentration of knowledge-based manufacturing has positively affected innovation. However, there were no clear positive relationships between the size of establishments and innovation in any forms of regions. In the annual data of 2003 and 2004 the spatial externalities derived across the existing administrative boundaries imply that innovation systems need to be built up at the regional or supra-regional level rather than at the local one.