The issue we wish to explore in this contribution is how relocation of production activities to countries such as India and China influences the organisation of innovation activities in a regional cluster. The study provides an account of the ongoing re-organisation of production activities in the telecommunication cluster in Northern Jutland. Despite that large-scale production activities are quickly disappearing from the area, companies are seem still able to exploit current competencies and explore new technological possibilities - focusing on their ability to develop new applications for their technological know-how and set this into production. The question we seek to explore here is: How do these companies focus innovation - while having no directly involvement in production - engage collaboration partners, orchestrate global production networks and lead product development activities? What managerial skills are called for? What are the strategic challenges development-oriented and often small companies faces from this position?