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The paper presents an Agent-Based model to analyze the reciprocal influence between industry structure and industry innovation patterns. This topic was originally investigated through the seminal models of Schumpeterian competition developed by Nelson and Winter (Am Econ Rev 67:271–276, 1977, An Evolutionary Theory of Economic Change. Harvard University Press, Cambridge, 1982), Winter (J Econ Behav Organ 5:287–320, 1984), and Nelson (National innovation systems. A comparative analysis. Oxford University Press, Oxford, 1993). However, the knowledge accumulation process depicted in these models was extremely simplified. In particular, they did not provide any insight about the direction of firms’ technological advancement, within the range of possible alternative technological paths. This aspect is instead of topical importance for the generation of sectoral spillovers affecting the …