This paper argues how the Fourth Industrial Revolution can change the global production chain and how core technologies function in industries. Furthermore, it focuses on how innovative clusters have to evolve to respond the Fourth Industrial Revolution. Last, but not least it also analyzes whether or not innovative clusters can play their roles as technology innovation hubs in the real world and CPS in the Fourth Industrial Revolution era.

The importance of an enabling environment for business and entrepreneurship, particularly for SMEs is complemented by the need to improve the impact of the economic-financial crisis from Europe, since disparities of economic development and structural economic differences still persist. In this context, the implementing clusters support policies became a priority for the European industrial policy. In addition, the Europe 2020 Strategy specifically stipulates the importance of clusters for business, especially for SME.

Despite their popularity and rapid proliferation and development, local cluster policies have met mixed results. This paper argues that an important reason for the limited success can be found in the way policies have been grafted onto a particular policy rationale, namely of “cluster building”. Responding to this critique, authors propose an alternative rationale, that of “policy leverage”, and a governance model which, in the pursuit of “policy leverage”, presents a new approach to intelligence gathering and to collective strategy-making.

Cluster policy implementation requires careful management if the different actors are to be properly engaged and committed. This article argues that a great deal rests upon the quality of leadership both at the strategic level of regions, or other administrative scales, and of individual projects or initiatives such as cluster support organisations. Furthermore, it examines cluster policy in the Austrian region of Styria where its successful application has assisted the transformation of the region from a crisis point in the 1980s.

The presentation explains the EU role in promoting clusters, provides an historical background, shows the relation between clusters and innovation with regional examples, and presents the European Cluster Observatory

Although there is increasing consensus that the presence of clusters enhances economic outcomes, there is little consensus on whether there is a case for policy intervention, as there can be pros (if government efforts are used to upgrade a region's competitiveness by supporting existing agglomerations) and cons (if governments attempt to create agglomeration artificially).

The article shows how the coordination between states, businesses, science and education is crucial for long-term economic development, and established a relation between these aspects and a successful cluster policy. Blurring lines between countries and forming a network society based on clusters have the potential to form a 'new economy'.

The article explored the pros and cons of the 'best practices' method used by the EC to promote an harmonised and EU-wide cluster policy. This creates issues such one size fits all approaches.

Three sets of challenges for what is now a mature policy are highlighted in this paper: the links between clusters, cluster policies and territorial strategy processes; more effective evaluation of how different policy instruments influence what happens inside clusters; and harnessing the capacity of clusters to respond to social alongside economic challenges.

Despite the popularity of the concept of "cluster of innovation" and its widespread use in policy, surprisingly little is understood regarding the nature of these interventions and their impact. Paradoxically, increasing demands for evaluation and evidence-based policy are being made at a time when increased policy complexity is challenging these very efforts towards policy learning. Cluster policy is an extreme example of this, given the lack of clear rationales, and the multidimensional and multi-instrument nature of the intervention.