Little research has been conducted on the influence of space on competency-building between organizations. The aim of this paper is to investigate the role of partnership arrangements in building competencies at the local level. Based on the literature of strategic alliances, we use case studies on innovation projects with joint venture development involving agricultural co-operatives in the Midi-Pyrénées region (France). We propose an analysis grid of partnerships in line with the nature of activities (Research and Development, production or commercialization) and reveal several factors which can explain when geographical proximity between actors is relevant according to the nature of competencies and to the stage of the project. The importance of geographical proximity depends on the objectives of the joint venture and on the diversity of partnerships. It goes from traditional partnerships between co-operatives which search for combining capacities and risk sharing to strengthen local agricultural production areas and to enhance the value-added of the final product, to more diverse partnerships where the issue is to mobilize “leader” private groups to promote local agri-food “filières”. Our research underlines also the importance of interpersonal relations on the organizational dynamics and on partnership building at the different stages of the innovation project