Purpose: The purpose of this paper is to report upon an initiative within a case study UK university to facilitate service innovation in small firms. The paper aims to outline how explicit use of such concepts has the potential to enhance the effectiveness of this form of university-industry interaction. Design/methodology/approach: The paper considers how an evaluative inquiry approach could be used to assess the contribution of explicit consideration of knowledge integration and absorptive capacity in university-industry interaction. Findings: The paper reveals how the study has been constructed and how the planned use of personal reflective tools and structured group interactions may enhance the consideration and utilization of the key concepts by the university and SME clients. Research limitations/implications: The paper brings a degree of theorizing upon university-industry interaction that is largely absent in reported studies. It adds to the knowledge/cognitive perspective upon small business support. Practical implications: The value of evaluative inquiry and explicit use of knowledge concepts in assisting the evolution of interactions with small businesses are highlighted. Originality/value: The paper presents a compelling case for an innovative approach towards facilitating collaboration.