The ongoing debates on updating Smart Specialisation Strategies (S3) in the European innovation policy framework mainly focus on practical implementation challenges. Potentially critical elements are identified at various levels ranging from a lack of understanding of the entire S3 concept to missing compatibility between S3 and policy tools for implementation, missing political commitment to focus on a limited field with high transformative potential, or a lack of critical mass in terms of innovation actors and public investments. This paper draws on the specific experience from the Interreg Alpine Space project S3-4AlpClusters, which put the interplay between S3 and clusters at the core of its conceptual and practical study of S3-implementation across the Alpine Space. While overlaps between the two concepts are evident and cluster initiatives are acknowledged in the relevant literature as tools in the context of S3, there is, to our knowledge, no comprehensive study on how clusters are currently involved in the practical development and implementation of S3. Moreover, practical implementation of S3 with cluster initiatives is found to be far from trivial and involves specific challenges. We therefore introduce an innovation model as a practical effort to better integrate cluster initiatives in the S3 process. The model is a systematic process for the regional and cross-regional identification and development of transformative activities (TA). Tools and methodologies for S3-implementation, such as S3-synergy diamonds, entrepreneurial discovery workshops (EDW) or action development workshops (ADW) are valuable individual contributions for future policy designs. Nevertheless, it is only by putting them into the context of a systematic innovation model, with a strong focus on transformative activities, and by making them the levers for cross-regional cooperation and a systematic involvement of cluster initiatives in regional economic development, that they become fully relevant for smart transformation processes leading to innovation within businesses, new value chains and jobs in innovative new areas.