This study focuses on the interactions between economic agents, verifying the assumption that innovation and competitiveness in an industry are systemic, with relatively diffuse sources, which co-evolve. In this sense, were used the approach of the Sectoral Innovation System defined by Malerba (2002), analyzing the relationship between three dimensions of analysis: organizations, institutions and technologies. The object of this study was the Industry of Sugar and Ethanol in Alagoas, the largest producer and exporter of sugar and ethanol in the Northeast of Brazil. The results indicated a positive interaction between those three dimensions of analysis; show that there is interaction between universities and research centers, and much of the technological advancement comes from public and private partnerships. It is noteworthy that the research effort focuses on genetic improvement and on innovations of process. Thus, the study indicates that there is an innovation system locally circumscribed.