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The purpose of this paper is to prove the importance of both cluster leadership and identification on cluster innovation.

The case studies presented in this study involve a cluster by micro-enterprises in Yilan, Taiwan. Data collected during interviews, observations and secondary data provide understanding and practices for the impact of cluster identification on cluster innovation.

This study proved: first, the importance of cluster identification on innovation by representing the need of consensus and collaboration of the members in conducting innovation actions; and second, the cluster identification is influenced by the cluster leadership by showing high satisfaction of the leader, close interaction between the members and high identification with the cluster.

This study predicts the ongoing cluster innovation activities will be achieved due to the transformational leadership and high cluster identification.

This study enriches the factors of cluster innovation accomplishment and proposes the important of cluster identification, which has not been discussed much in the past.