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There are debates in the research literature about the mechanisms responsible for the formation of local development trajectories. What is emphasised, as particularly scarce, are longitudinal studies which show how historical, social and institutional structures are reproduced and/or transformed into new paths of development in the case of industrial towns. This paper aims to capture the role of various social, cultural and institutional features that constitute localised capabilities, in the process of transition from an old to a new developmental path for older industrial towns. The authors use case studies of three medium-sized industrial centres in Poland: Dzierżoniów, Starachowice and Mielec, to illustrate how localised capabilities are shaped by the interplay of earlier economic activity and the characteristics of local firms, on the one hand, and the evolving social, cultural and institutional attributes of the particular town and its region on the other. As a result, industrial towns may differ significantly in their ability to absorb exogenous impulses, as well as their capacity to transform and recombine them into a new development pathway that is more resilient than the old one. [ABSTRACT FROM AUTHOR]