"Cross-border regional cooperation in education, human welfare , migration, environmental conservation, and tourism has been recently established in the form of supranational alliances supported by EU funding, aimed at decreasing the political barriers created by boundaries and increasing regional competitiveness, European cohesion and economic prosperity for peripheral areas across the union. This collaboration is particularly successful amongst SMTEs and includes marketing, joint promotion, and training programmes for owners and employees. While these and processes of regionalization have been studied, knowledge transfer and diffusion of innovations amongst SMTEs and the contribution of the unique characteristics of cross-border regions to these processes have been ignored. Since border regions host people from different countries, cultures and backgrounds, they may as well be considered a ‘melting pot’ for creativity and innovations hosting that makes than an innovative milieu for the tourism industry. The study will identify knowledge transfer and innovative processes amongst SMTEs in cross-border regions in the context of EU funded initiatives, such as INTERREG, between Finland, Sweden and Norway and the aspects influencing their nature. It questions whether proximity to border intersection influences the levels of innovations and creativity and whether intensive movement of people and tourists influence the transfer of ideas and diffusion of innovations. The study will also identify indicators for monitoring levels of creativity and innovations in these areas and whether cross-border business networks are used as knowledge transfer mechanisms. In-depth interviews with SMTEs owners/manager, tourism officers and programme leaders, will take place in both regions as well as some quantitative data regarding the exchange of products and levels of revenues from the introduction of new tourism facilities and products will be compared."