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Cluster development (or cluster initiativeor Economic Clustering ) is the economic development of business clusters. The cluster concept has rapidly attracted attention from governments, consultants, and academics since it was first proposed in 1990 by Michael Porter. Many governments and industry organizations across the globe have turned to this concept in recent years as a means to stimulate urban and regional economic growth. As a result, a large number of cluster initiative organizations were started during the 1990s, and the trend continues. The first comprehensive study of cluster initiatives around the world was reported in the "Cluster Initiative Greenbook" published by Örjan Sölvell, Christian Ketels and Göran Lindqvist, with a foreword by Michael Porter. The report was presented at the annual meeting of The Competitiveness Institute, TCI, in Gothenburg in 2003. A follow up study in 2005 covered more than 1400 cluster initiative organizations across the globe.

While the purpose of cluster initiative organizations is to promote economic development within the cluster by improving the competitiveness of one or several specific business sectors, it is important to differentiate these public-private organizations from policy-making organizations at different levels, e.g., national government units such as the UK Department of Trade and Industry (DTI), and supranational bodies such as the OECD and the European Commission and from industry associations comprising firms within one business sector, e.g., biotech, steel.

More specifically, cluster initiatives are organizations or projects that are organized as collaborations between a diverse number of public and private sector actors, such as firms, government agencies, and academic institutions. Whereas lobbying policymakers may be one of the cluster initiative’s activities, cluster initiatives generally are involved in a broad range of activities, e.g. supply-chain development, market intelligence, incubator services, attraction of foreign direct investment, management training, joint R&D projects, marketing of the region, and setting technical standards.

In June 2007, the European Cluster Observatory was launched. Financed by the European Commission (DG Enterprise and Industry), it provides information about clusters, cluster initiatives, and cluster policy throughout 32 European countries.

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