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In recent years the development of policies to respond to the hollowing out of regional industry has become a pressing issue, so the importance of regional innovation systems utilizing science and technology activities and their achievements in regions has come to be widely recognized as an effective means of tackling this problem. There is strong evidence of the formation of clusters in regions in advanced nations ( Fig. 25 ).

Fig. 25 Concept Diagram of Clusters

Due to the agglomeration effect in clusters, the utilization of the "knowledge" of universities is stimulated, the mechanisms of competition between competing companies comes into play, and a mechanism that accelerates innovations comes into play. Furthermore, in clusters, it becomes possible to rapidly gain a clear picture of customer needs and trends, and an environment is provided in which it is easy to obtain the need for innovations and technical opportunities. It is also often the case that it is easy to procure the resources required for innovations (parts, services, machinery, etc.) in terms of costs and other aspects, and there is the expectation of close participation from local suppliers and allied companies, so it is conceivable that new technologies and products would be effectively produced one after another, contributing greatly to corporate growth and employment.

The formation of clusters, under a nationwide innovation system, would enable the incorporation of diverse systems making the post of regional potential and regional characteristics, and stimulate innovation through competition and cooperation between clusters and between companies within regions, with the result that it would contribute to a flexibility to respond to changes in the environment and strengthen the nationwide innovation system.

In creating regional innovation systems characterized by competition and diversity, creative innovations by local government bodies and other parts of regions are of the utmost importance. The size of clusters varies widely, and complementary effects between clusters are evident, so it is necessary for administrative organizations and universities to cooperate flexibly in response to clusters, rather than being guided simply by conventional administrative divisions.