TAMA Association, which has been a model case of the industrial cluster policy of Japan, is an organization established by the firms, universities, industrial associations, local governments and individuals in the western part of Tokyo Metropolitan area, which is called as TAMA (Technology Advanced Metropolitan Area), for promoting university-industry linkages and inter-firm linkages. Key elements of the Association's mechanism to form the linkages, and thereby create innovations, are the absorptive capacity of “product-developing SMEs” and the intermediary function of the Association itself. Main points of the recent and expected future developments of the TAMA cluster initiative are a closer alliance of the local governments with their increased involvement, formation of an innovation platform for the large global enterprises, further development of the university-industry linkages through exchange of human resources between universities and firms, and enhancement of international activities.