Purpose: By comparing two small high-tech firms specialising in medical technology this article seeks to answer the following questions: What are the key characteristics of innovation processes in the case firms? How do the mutual relationships between mental, social and physical spaces explain the different pathways in the innovation processes in the firms? Design/methodology/approach: One case is based on an in-depth study conducted by the authors. Regarding the other case, a secondary analysis is conducted of a case described in the literature. Both cases apply several data sources. The case firms are comparable in their most crucial aspects (field, main product, geographical location, joint learning space in the start-up phase). Findings: The firms have many similar features. The study, however, draws attention to the factors that have made them substantially different as contexts of innovation activities. The differences are interpreted through the concepts of physical, social and mental space. Special attention is paid to the tightness/permeability of boundaries circumscribing spaces and to how this condition supports/inhibits cooperation between different occupational groups in the product planning process. Tightness of boundaries is not unambiguously a good or a bad thing but permeable boundaries are needed when a mix of different knowledge bases is vital. Research limitations/implications: The focus remains within the firms. Innovation activities extend also beyond the borders of the organisation. Practical implications: Management should be aware of the productive and counterproductive effects of spaces and the means to influence their shaping. Originality/value: The study highlights the potential of the concept of space in an empirical comparative setting for studying organisational prerequisites for innovation processes and related learning and cooperation.