Following the previous chapter on firm behavior, this chapter presents an analysis of entrepreneurship and its context. The chapter digs into the historical and geographical depth to better understand Guangdong’s conditions of entrepreneurship that led to the creation of industrial clusters. It presents the contradictions between the macro policy and the establishment of private entrepreneurs and finds that local officials translated the state policies to promote regional innovation opportunities, and develop links between private entrepreneurs and the macro business environment. Together with firms’ learning strategy, the local cluster policy in fact accommodated and coordinated local entrepreneurs, providing them with a handful of tangible resources for venturing. The cluster policy of local authorities matches well the needs of learning firms for their first-step development.