Clustering has experienced incredible development in the last 15 years. Connection of the companies under clustering principles with the aim to enhance their long-term competitiveness has emerged as an answer to increasingly greater globalisation pressures. Clusters, namely, have proved a ssuccessful leverage for enhancement of productivity, and as an effective means for leading developmental dialog on the state, region and also town levels. General characteristics of network organisation development also apply to the cluster formation and their development. It is important that the cluster succeeds in developing their members` inventiveness and in enhancing the business environment. The key role in the cluster formation and development belongs to the government, which can significantly contribute to the success of the clustering process with suitable policies and creation of adequate "macro" conditions. Without this initial impulse, the clustering can hardly develop. It can also be established that beside suitable governmental support in initial phases of the development, success of the clustering depends first of all on successful acquisition of the external sources of income. In Slovenia, the process of clustering has found favourable conditions, like similar processes in the neighbouring countries and all over the world. In the Slovenian wood-processing branch the Wood Industry Cluster and a few local entrepreneurs` clusters have been developed. The course and results of the cluster development so far prove that in the companies there exists an actual and vital need for this sort of connection, which results first of all in increasing the long-term competitiveness.