Provision of policy guidance on the development of local clusters of entrepreneurship and innovation is one of the key work areas of the OECD Centre for Entrepreneurship, SMEs and Local Development. Clusters are one of the most remarkable features of local economic development and small and medium-sized firm competitive advantage. Localised groupings of suppliers, customers, competitors and support institutions, all specialised in related activities, are present in all economies. They are particularly productive locations for the economic activities they host. They are sites of strong entrepreneurship and innovation vitality. And, because of this, they drive economic and employment growth. But what makes clusters grow? What threats do they face? How should policy intervene? Answering these questions is the key motivation of this book.