This paper analyses the relationship between knowledge production and urban locations in industrial design, a knowledge-intensive business service (KIBS). KIBS concentrate in urban locations. This is often explained by the co-location of client firms and market access in large cities. Recent research on knowledge production, however, reveals that knowledge productive networks are significant for both the competitiveness and location of KIBS. Thus, to understand the urban location of industrial design, it is important to analyse how knowledge production is organized within the industry. Industrial design is concentrated in urban locations, but most of its clients are located elsewhere. Hence, it seems that industrial design firms concentrate in urban locations mainly because their knowledge networks include specific types of formal and informal local social networks.