Public policy in support of SME over the past 20 years has been characterized by a an overlapping of jurisdictions. The 1946 Constitution was amended over several years in the late 1990s/early 2000s to hand responsibility for local economic policy from the central government to Regional authorities. In practice, however, the central government has continued to legislate and provide financial support (for example, for R&D or technology transfer incentives) to SMEs, while local authorities have so far failed to piece together a consistent set of industrial policy initiatives relative to small firms: at most some areas have adapted existing national legislation to specific needs of sectors located within their administrative boundaries. Furthermore, central legislation is often contradictory and open to interpretation, which leaves SMEs without much needed support in those areas where public action is most important. The data drawn from a number of studies of SMEs in central-northeastern Italy confirm the need for coordinated industrial policy action to assist these firms deal with rapid technical change, evolving market and growing competition.