AbstractMuch of the world is moving rapidly into a knowledge-based economy. Universities generate, interpret and transmit much of human knowledge, so it is natural that they have an increasing role in economic development. They do this within national or regional innovation systems. These are loosely coupled interactions among universities, governments and industry that create new knowledge and technology through research, educate young men and women to understand and extend it, and move it from the marketplace in the form of goods and services. MIT has experience in many dimensions of interaction with industry - through research partnerships, research consortia, knowledge integration communities, and activities that foster entrepreneurship. New models of innovation are emerging. Despite the important role universities play in innovation and economic development, their traditional roles as conservators of culture, heritage and values - and as critic and analysts of culture and society must be cherished and stewarded.