The paper examines the main trends of sectoral specialization and geographic concentration of the manufacturing industry in the Italian Local Labor Systems from 1981 to 2001. The main results are the following: both specialization and concentration show a tendency, although very weak, to decrease during the period under examination. Specialization decreases steadily in the Southern areas while in the Northern regions the trend slows down significantly during the nineties, presumably because Northern Local Labor Systems have been more affected by the European integration process. No such difference has been detected for concentration. Innovative industries shares are quite stable in the aggregate, however a technological convergence process can be detected among the territorial units. High tech industries tend to locate into territorial clusters and to diffuse into contiguous areas. High tech and increasing returns to scale industries are more geographically concentrated. A stable concentration degree over time is compatible with industries locational mobility across SLLs.