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This article provides a critical discussion of the recent econometric literature on “localised knowledge spillovers” and the related notion of tacit knowledge. The basic claim of the article is that the increasing, and more or less automatic reliance of industrial geographers upon such econometric evidence and theoretical concepts to support their work on industrial districts, hi-tech agglomerations and, more broadly, local innovation systems is not well placed and risks to ge nerate conceptual confusion and to distort research agendas. Following some recent advances in the economics of knowledge, the article also suggests that more research efforts should instead be devoted to exploring how knowledge is actually transmitted, among whom, at what distance, and on the basis of which codebooks.