The relatively weak performance of sparsely populated areas has been given substantial attention in many regional, national and European Union initiatives. Many rural areas are struggling with development problems such as depopulation, advanced ageing, industrial restructuring and high levels of structural unemployment. In Sweden these issues are mainly associated with the difficulties in the non-metropolitan sparsely populated areas in the northern and southeastern parts. Here, the issue of implementing general cluster policies in sparsely populated regions in order to enhance their economic development is in focus. This research includes an overview of existing Swedish regional growth and development programmes that exemplify the current regional policies. It is found that the concepts of clusters and innovation systems have become important for policy on national and regional levels of government, but the understanding of the concepts is poor. In spite of regional variations in preconditions for cluster development, there are no clear regional modifications in the interpretation of clusters as described in the documents. One conclusion is that regional and local strategies to develop businesses in sparsely populated areas would benefit from using examples from non-metropolitan regions as a point of departure rather than using experiences drawn from high-tech industries located in metropolitan areas usually referenced in the international literature. The routine use of cluster and innovation systems in policy on the regional level underlines the need for more empirically based research on the preconditions for cluster development in sparsely populated areas.