This paper foucuses on medium-sized cities (in Hungary, county seats) as key elements in transmitting innovations to the lower levels of the settlement hierarchy. In the cluster of county seats, there is a substantial group of innovative, adaptive, information-oriented individuals in their local societies which may facilitate early application of information technologies. Their local economies, particularly the information sector, are also able to adapt to new waves of innovation. Regional policy should concentrate on the most important elements in information transfer, the county seats, in order to build local information sectors into a larger, city network of knowledge centres.
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