This paper describes a concept of collaboration between industry, university and research institutes in the area of Smart Textiles in Sweden. The concept idea of a laboratory and Prototype Factory at The Swedish School of Textiles for development of Smart Textiles in knitting is presented. The result presented shows a concept where Smart Textiles can be developed and knitted in a prototype factory and a development laboratory. Companies, researchers and others with product ideas in the area of Smart Textiles can here get a first prototype and help to continue to make a ready made product for the market.