The aim of the article is to analyse the determinants and good practices in using knowledge as a factor in the development of entrepreneurship at local level. The article consists of three sections. In the first section, the authors discuss the genesis of perceiving knowledge as a factor of socio-economic development. In the second part, the understanding of the concept of local development in the view of various economic theories is presented. Finally, section three provides an overview of international research and experience in the modelling of development based on knowledge and entrepreneurship.