Regional capabilities are regarded a key pillar of Smart Specialization (S3) policy. There is yet little focus in S3 on the role of inter-regional linkages, as there is little understanding of how inter-regional linkages may affect the development of new activities in regions, and to what extent these linkages may compensate for the lack of regional capabilities. The report analyses 292 NUTS2 regions in Europe and finds that inter-regional linkages have a positive effect on the probability of regions to diversify, on top of the impact of regional capabilities. Moreover, it seems this is especially true for inter-regional linkages that give access to new capabilities that are related to existing capabilities in the region. Finally, a complementarity indicator that has been developed that can be used by regions in their S3 strategy to identify regional strategic partnerships, depending on the presence of complementary capabilities in other regions.