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The paper aimed at exploring the role of local industrial clusters as a part of an important evidence-based pathway for operationalizing smart specialization policy. Hitherto, the scientific debate has been largely focused on the relationship of clusters with the local business environment to boost competitiveness and has mostly searched for the operationalization of smart specialization policy in economically successful regions. However, the understanding of the role of local clusters (LCs), in terms of cluster industries that serve local businesses and residents, as potential “building-blocks” of Smart Specialization Strategies (S3) still lacks interpretive studies. We proposed a conceptual framework to unveil those factors of LCs that may be enhanced in the S3 policy design, around the concepts of adaptiveness and responsiveness to structural and influencing features of a local economic system. The distinction between Local and Traded clusters, applied in the US context, allows the identification of Local Cluster performance because of the availability of a robust data set. Accordingly, a tool is proposed to investigate those factors that are likely empowering smart specialization strategies: The dynamic SWOT analysis on the case of San Diego provides interesting insights toward building this conceptual framework. The findings may help explain how to relate LCs with smart specialization as building-blocks, based on potential risks and opportunities associated with the local economic system.

Local Clusters as “Building Blocks” for Smart Specialization Strategies: A Dynamic SWOT Analysis Application in the Case of San Diego (US)