This paper discusses innovation and regional economic development in terms of socio-cultural structures, focusing on urban regions where high density of knowledge activities can be found. Urban regions tend to gain importance in knowledge based economy era due to the advantages of urban economy such as the presence of many institutions, high knowledge intensity and the geographical proximity. In this respect, urban economic development is determined by how to develop these advantages. In particular, since the role of institutions and dynamics in economic development is increasingly paid attention, institutional and evolutionary perspectives stressing social and interactive learning process between actors and their environments seem to be much more stressed in urban economic development and innovation. Accordingly, urban innovation policies need to focus on the creation and enhancement of regional technology transfer infrastructure and the encouragement of collaboration between academic institutions and industry.