The paper sets out to explain how and why industrial clusters evolve to new economically viable development paths. We focus on the interplay between MNEs global strategies and their local SMEs creating important dynamics leading to cluster change. Although various mechanisms are at play simultaneously, we consider that the understanding of the dynamics and interactions between MNE and SMEs' entrepreneurial behaviours are crucial. We define the boundary conditions to put the balance of exploitation and exploration into a more applicable framework. This allows us to present propositions of mindset and behaviour in regard to (a) the perceptions and preferences for environmental uncertainty; (b) the focus on exploration and exploitation processes; and (c) the means to derive at balancing these processes. Drawing on longitudinal data from a Swedish biorefinery cluster (Örnsköldsvik) we identify archetypical firms and document their interactions between the lead MNE and local/regional entrepreneurial SMEs; we conclude on dynamic changes that drive local firms' success in such a cluster.