The aim of this paper is to estimate the role of territory and the individual firm in innovation in the Brazilian industrial economy after the trade-opening period from1998 onwards. This study is based on a database whose micro-data are a merger between the Technological Innovation Survey (PINTEC) and the Yearly Industrial Survey (PIA) of the Brazilian Institute of Geography and Statistics (IBGE). These micro-data are analyzed by the logit regression method as well as using hierarchical regression models. The main results reveal that firm-level variables and region-level variables are complementary but with the former having more impact on the propensity to innovate than the latter.