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Over the past decade, there has been growing interest in local industrial agglomeration and specialization, not only by economic geographers but also by economists and by policy‐makers. Of the many ideas and concepts to have emerged from this new‐found focus, Michael Porter's work on ‘clusters’ has proved by far the most influential. His ‘cluster theory’ has become the standard concept in the field, and policy‐makers the world over have seized upon Porter's cluster model as a tool for promoting national, regional, and local competitiveness, innovation and growth. But the mere popularity of a construct is by no means a guarantee of its profundity. Seductive though the cluster concept is, there is much about it that is problematic, and the rush to employ ‘cluster ideas’ has run ahead of many fundamental conceptual, theoretical and empirical questions. Our aim is to deconstruct the cluster concept in order to reveal and highlight these issues. Our concerns relate to the definition of the cluster concept, its theorization, its empirics, the claims made for its benefits and advantages, and its use in policy‐making. Whilst we do not wish to debunk the cluster idea outright, we do argue for a much more cautious and circumspect use of the notion, especially within a policy context: the cluster concept should carry a public policy health warning.