This paper explores the nature and development of research in localized growth, focusing on the development of economic and industrial clusters. The renewed interest in agglomeration and localized economic growth research has come from a variety of disciplines, but ideas and thoughts about local thickening have a much older origin. Research in local agglomeration and embeddedness crosses through expressions such as cluster, industrial districts, innovative milieu and networks. ‘Internal’ versus ‘external’ influences, weaknesses of research, definitions and new approaches of research in clusters are also discussed. Not all spatial agglomerations of firms in the same or related sectors necessarily comprise a cluster.