This paper studies the nature of the dynamics of international technological specialisation. We consider variables related to knowledge accumulation, domestic knowledge linkages, innovative activities by public institutions and profit opportunities. Using data on patent applications and citations, R&D and export we build a panel of 135 micro-sectors for the G5 and Italy and estimate a dynamic specification. We show that technological specialisation is positively affected by local knowledge links. A significant lagged value of trade specialisation suggests that high levels of trade specialisation in a sector signal profit opportunities, foster best practice techniques and learning, and affect technological specialisation.