The current rationale is that geographic regions provide the best context for innovation systems to emerge and thrive because of localized learning processes and the need to transfer “sticky” knowledge through social interaction. The core idea is that innovative activity relies upon an entire system composed of a variety of institutions and infrastructures interacting to create a learning-conducive environment that is geographically bound. The benefits associated with establishing regional innovation systems is that physical proximity facilitates the necessary underlying social capital essential for the creation of new intellectual capital. However, this concept of promoting innovation by restricting researcher and private firm mobility to specific geographic regions has real limitations, for instance, there may not be enough developed land, housing or amenities to attract the top scientists and organizations to a specific region. This begs the question, can regional innovation systems designed in a virtual world generate the same dynamics? In this paper, we consider whether the term “regional” in the sense of innovation systems is limited to geographic proximity in the real world, or whether or not this concept extends to geographic proximity in a virtual world. The purpose of this paper is to present our design ideas about how to create a virtual regional innovation system in the virtual world Second Life. We base our community design on the theoretical foundation underlying the primary and support activities of innovation systems. We then present our ideas about how these activities may be translated to a virtual community. We end with a discussion of why this research is relevant in terms of both practice and research.