Clusters are geographic concentrations of companies and institutions that are interconnected in a particular sector. They are related because of their mutual complement and encourage industry to compete one another. According to Porter (1998), a cluster is a geographically proximate group of interconnected enterprises and associated institutions in a particular field, linked by commonality and complementarily. Based on this definition, a cluster may include suppliers of inputs, or extend downstream to regular buyers or exporters. It also comprises government institutions, business associations, providers of business services and agencies that support clustered enterprises in such fields as product development, production process improvement, technology, marketing information. Schmitz (1997) defines a cluster as the similar companies or companies that related to each other, come together in certain geographical boundaries. While the Ministry of Cooperatives defines a cluster as a group of the core industry, related industries, supporting industries and economic activities and related supporting other in mutually supportive activities. Cluster Theory (Porter, 1998) focuses on the removing barriers and inefficiencies of productivity growth. Table 4.2 shows the potential of Batik Clusters SMEs in six districts as targeted research