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The concept of localized learning outlines how local conditions and spatial proximity between actors enable the formation of distinctive cognitive repertoires and influence the generation and selection of skills, processes, and products within a field of knowledge or activity. The localized learning argument consists of two distinct yet related elements. One has to do with localized capabilities that enhance learning, while the other concerns the possible benefits that firms with similar or related activities may accrue by locating in spatial proximity to one another. This article disentangles these two inherent elements of the concept, reviews some of the critiques that have been raised against it, and sorts out some misunderstandings that are often attached to its present use.