Nowadays the universities are expected to contribute increasingly to economic development in the country, region or locality in which they are sited. As in the case of the development of business clusters, national innovation systems or knowledge transfer, the locally anchored university is expected to serve as a producer, analyser and interpreter of knowledge for the needs of the knowledge economy. The 'Lisbon agenda' launched by the March 2000 Lisbon European Council and its subsequent policy document 'The role of universities in the Europe of knowledge' made this approach more prominent in the European context. The Commission argues that if Europe is to be competitive in an increasingly globalized market then it must enhance the potential of its higher education institutions by the creation of a European Higher Education Area and a European Research Area and harness the resources of the universities in the interests of local regional and European economic competitiveness. The Baltic region which represents the enlarged Europe in a nutshell is a case in point. The most vigorous debates about the role of universities in regional and national development have taken place in Sweden and Finland, which have long experience in research based innovation and economic growth. But also in countries like Poland, Lithuania, Latvia and Estonia which have only recently emerged from a Soviet style economy, the importance of relationship between the university and its locality has been upgraded. In these countries, perhaps more acutely than in the rest of Europe, there have been strong financial considerations to prompt universities towards a re-focussing on regional economic agenda. In the transition economies the new emphasis on a regional role is a response to the reduction of resources coming from national government and an attempt to tap into alternative sources of income. In some countries there has been a deliberate decision by national governments to channel funds to regional administrations or agencies which have then been able to use them as an incentive to university engagement with the regional agenda. In my presentation a number of different geo-political spaces will be referred to in considering the economic contribution of universities: to their roles in relation to the local, regional and national economic development and also to supra-national regions like 'the Baltic States' and to the globalized economy, which, in research terms is also linked to globalized research communities. I will demonstrate how the HE decision makers that are faced with a number of different choices with respect to the strategic development and management of their institutions make these choices. The influence of the two competing major trends unfolding in the environs of their institutions - globalisation and regionalisation on this process will be addressed. This will be done by presenting a number of cases from the Baltic region indicating that the major strategic decision facing any university is whether to seek a future primarily as an institution deeply embedded in its local community; as a 'regional university' with outreach to and engagement with a wider region (of the sub-national kind favoured in the policies of the European Community); as a national institution; or in the case of a favoured minority as a global player marked, probably, by the international excellence