Sombor and Belišće are both major industrial centres of their respective counties and are currently confronted with similar constrains that hinder their competitiveness as business-friendly urban areas. Both historically, and up to this date, two cities have relied on agriculture, paper industry and mechanical engineering as important economic pillars. Bridging of the border through the establishment of two CBCs will contribute to the efforts of two cities to improve local business climate and competitiveness and innovativeness of mentioned sectors. Additionally, it will facilitate the collaboration and trade flow between the two areas allowing SMEs to internationalize their market range. Benefits of the target groups: Application of CB regional approach will enable cluster companies to exploit their competitive advantages in greater measure and scope than would be possible if only acting individually on local level. Cluster membership will enable them to potentially form partnerships with vendors of complementary offerings, further expand their supplier and customer base (market penetration strategy), lower their transportation costs and stimulate labour mobility. In addition, interaction of SMEs, but also BSO and local public authorities, with relevant faculties and NALED, as sources of marketable knowledge and technology generation and transfer, will directly address SMEs knowledge gaps in innovation capacities, allowing them to increase added value of their products and maximize profit in general. Benefits for the partners and project area: The establishment of two clusters is an opportunity for economic enhancement of the project area due to the multiplier, synergetic effects between and within the clusters that will generate additional labour demand and foster economic prosperity in general. Also, it will allow university to assume a more entrepreneurial role by reshaping teaching and research according to market requirements and broader societal needs.