The creation and development of industrial clusters has spread out as an effective instrument to channel business co-operation initiatives towards innovation and internationalisation. It has been widely proved and documented that geographical concentration of interconnected businesses, suppliers and associated institutions in particular fields increase the productivity of companies, in particular of SMEs, and therefore their national, European and global competitiveness. Within the former EU 15 countries and from the early 90s, most of the RDAs have promoted the creation of industrial clusters in their respective territory. “Innovation poles” or clusters are not easily built from scratch but strongly depend on pre-existing scientific and/or industrial strengths. The successful design and implementation of cluster policies therefore depends on a clear and thorough identification of the existing industrial and science base.

The role of clusters in EU innovation policy was highlighted by Commission Communication of 11 March 2003, "Innovation policy: updating the Union's approach in the context of the Lisbon strategy” stating that successful cooperation with other companies and the public authorities calls for the creation of "clusters", which are geographic concentrations of complementary, interdependent yet competing enterprises.

Furthermore, in its Communication to the 2005 Spring European Council on the Mid-Term Review of the Lisbon Strategy, the Commission underlines the importance of “innovation poles” for competitiveness and growth. Such “innovation poles” or clusters bring together innovative enterprises with R&D and financing institutions, thus acting as a bridge between research and industry, usually at regional level. In this sense, clusters are defined as geographically proximate groups of interconnected companies, suppliers, service providers, and associated institutions in a particular field, linked by commonalities and complementarities. Clusters are often concentrated in a particular national region, and sometimes in a single town, but increasingly “clusters of clusters” across regional and even national borders are emerging.

Clusters are successfully operational at regional and national levels, and one of the European Commission policy lines is to promote transnational knowledge and innovation driven clusters.

More recently, the 7th Framework Programme is considering clusters as a key instrument in the Regions for Knowledge initiative, as suitable participants would be ‘Consortia of Regional research driven clusters or a single research-driven cluster having multinational partnership’. Research driven clusters are concentrations of research organisations (public research centres, universities, not-for-profit bodies), enterprises (large firms, SMEs), regional or local authorities (local government, regional development agencies) and where appropriate local entities such as chambers of commerce, savings banks and banks, operating in a particular scientific and technological domain or economic sector.