Fostering the Growth of Innovation Clusters for Regional Development : Building a Network of Software Clusters in Paraná, Brazil Carlos Quandt Luiz Márcio Spinosa Fernando Pacheco Pontifical Catholic University of Paraná Rua Imaculada Conceição, 1155 – P. Velho CEP 80215-901 – Curitiba – Brazil spinosa@cits.br quandt@skm.pucpr.br ffpacheco@inetone.com.br ABSTRACT Competitiveness and growth in the knowledge-based economy are directly linked both to the development of local innovation capacity and connectivity to global resources. Clusters and networks are emerging as significant tools to promote regional development, foster SME growth, reduce spatial and social inequalities, and to activate, diffuse and expand locally generated knowledge. The present work seeks to move toward these objectives by investigating ways to promote the creation and expansion of regional innovation, while contributing to build local research capacity in the field. It is based on the notion that small and medium enterprises (SMEs), particularly technology - intensive ones, can trigger and sustain economic growth and equitable development, strengthen university-industry-government cooperation, and promote technological innovation and regional competitiveness. The general approach is centered on the relevance of two key concepts for SME (Small- and medium-sized enterprises) development: innovation clusters and cooperation networks. The general approach also involves the application of those concepts to the case of W-CLASS (Paraná World Class Program for Software, E-commerce and E-business). The research focuses on issues related to building and growing clusters, based on this in-depth study of the Paraná clusters.