Background The importance of creativity as a driving force in regional economic growth and prosperity has been previously documented by one of us (Florida, 2002a; 2002b; 2002c). However, the mechanisms of this relationship not well understood. Knudsen et al (2003) have shown that innovative activity within a region is positively associated with population density and creative-class workforce, both jointly and separately. The explanation put forth suggests, but does not confirm, that high levels of density and creative-class employment create conditions under which innovations generated by the interactions between individuals are more likely to occur. In this paper we present evidence of these innovation-generating interactions.