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4.2. Sources of Entrepreneurship and New Ideas 
4.2.1. Clusters 
Clusters are defined by the cooperation of producers, 
service providers, research and educational institutions, 
financial institutions and other private and public entities 
related through different types of connections. There is huge 
diversity among groups: they vary in their growth stage and 
during their life cycle. Some of these clusters are networks of 
SMEs, some are developed based on the most important large 
companies, while others have developed around universities 
(Drucker, 1985). The relatively low innovation performance 
in Europe was the subject of many recent analyses and 
reports. It is an important issue for Europe because 
innovation is becoming the driving force of prosperity and 
growth, as countries attain higher levels of income. While the 
poorest countries have the potential to grow by investing in 
production capacity and the adoption of technology 
developed in other countries, the richer countries should 
muster their productivity for the introduction of new 
products, services, or efficient customer service ways to 
maintain their prosperity. To this end, collaborative groups 
can play a key role. 
Innovation is characterized as an open process, which 
cooperates in complex ways many different factors, such as 
companies, customers, investors, universities and other 
organizations. 
The 
traditional 
linear 
model 
of 
entrepreneurship and innovation, with clearly defined roles 
for basic research in universities and applied research in a 
research and development company is no longer effective. 
Entrepreneurship and Innovation can take advantage of the 
geographical proximity, which facilitates the movement of 
knowledge and unplanned interactions that are critical parts 
of the innovation process. This is one of the reasons why 
innovation occurs at the local level, while the benefits are 
spread more widely through improved productivity. Clusters 
that may incorporate the features of the modern innovation 
process: can be considered as innovation systems on a small 
scale. Successful clusters undertake all activities required to 
deliver a great value to customers. At the same time, they go 
beyond traditional definitions of industries and construction 
in relation to the services and may even arise where the 
companies' locations are not determined by the location of 
markets or natural resources. The specific nature, including 
their territorial coverage, varies depending on the technology, 
market conditions and other factors affecting the 
geographical area and the relative strength of social ties 
(Praszkier & Nowak, 2011). 
Economic activity within a particular cluster tends to be 
more concentrated in some areas. Individual regions more 
specialized in specific, different clusters, and more 
interlinked. This allows the overall economic activity to be 
distributed relatively evenly in different areas, even if 
individual regions change specialization (Kiss, Danis, & 
Cavusgil, 2012). Areas without specialization are facing the 
risk of being left behind on economic development. 
Therefore, it must be provided in all regions of the conditions 
and opportunities for successful participation in this process. 
Clusters can contribute to the prosperity of a region, but not 
the only explanation for competitive advantages. The 
presence and depth of the teams in a regional economy is one 
aspect of the overall business environment facing enterprises 
in the region. Also, other factors and circumstances must be 
considered, such as the Competitiveness and demand 
conditions. Clusters are most likely to emerge, thrive and 
survive when these conditions maintain high productivity and 
innovation (Kiss, Danis, & Cavusgil, 2012). Clusters and 
regional specialization empirically associated with higher 
levels of innovation and prosperity. According to the 
European Cluster Observatory, about 30% to 40% of total 
employment located in sectors concentrated or formed at the 
regional level. The regions with the highest share of 
employment in industries that are part of major clusters are 
generally more robust. Since employment reflects the 
activities in many industries belonging to such clusters, 
prosperity grows longer. The location in cluster groups linked 
through common industries or groups operating in 
neighboring areas provides additional benefits. While there 
are many factors other than the formations, which may 
impact on prosperity, the data provide clear evidence that 
clusters largely associated with prosperity and, therefore, that 
there is a need to consider the clusters as central part of any 
economic strategy. A more extensive analysis of these factors 
is being carried out by the European Cluster Observatory, 
based on recent academic work on the subject (Kiss et al., 
2012; Dimitratos et al., 2012).