Even though the adoption and implementation of innovation within the construction sector is an area that has attracted wide attention, gaps have been found in terms of the interface between innovation, construction sector and micro firms and the concept of clusters. Therefore the aim of this study is to focus on clustering as the way towards innovation, and to investigate what the Critical Success Factors (CSFs) are for the creation of a cluster within micro companies working in the construction sector within a specific context, Greece. To do this an explorative study was implemented adopting the Pragmatism approach and choosing for the research the mixed method approach. The research design was divided into three phases. The preliminary where the theoretical foundations of the conceptual framework has been set; the fieldwork where both structured questionnaires and in-depth interviews were used for data collection; and the modifications where the Conceptual Framework was refined to an Empirical one, within the specific context of the Greek construction industry. The findings of the research demonstrated that the Greek construction sector is mainly comprised by micro firms with less than five employees, and that such firms had interesting perspectives to innovation and clusters. In this regard, the results established that even though the Greek construction sector shared most of the evident CSFs, their importance was altered and more were added based on regional specificities and operating environment. Examining the original nineteen CSFs, clarifying them and resulting in thirty two CFSs for the construction sector in the Greek context is clearly one of the main contributions of this work. Therefore even though there is a number of contribution referred in this thesis's last chapter, this study's key contribution in terms of policy is by offering focused interventions to the local authorities; in terms of practice by presenting the Greek case study as an example for other European countries that share and faces similar challenges; and in terms of theory by introducing a framework based on the literature and refmed in practice linking CSFs for innovation adoption, clustering formation and the construction sector, under the scope of micro firms.