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The rationale of the project reported here was to explore the role of TAFE New South Wales (NSW) as an active partner in regional and community development. The objectives of the project were to: (1) Provide TAFE NSW Institute staff with skills to assist them in identifying entrepreneurial and innovative approaches for engaging with and supporting their local communities/industries; (2) Build effective local partnerships to identify innovative responses to business and other employment and social development; (3) Assist Institutes to recognise the community’s diversity in order to plan effectively; (4) Encourage economic revival, including employment creation; (5) Provide information for different groups (including individuals and employers) on education and training; (6) Provide learning opportunities for all as needed; (7) Provide forums for discussion and exchange. From a call for expressions of interest, three diverse TAFE projects were chosen to participate in the project, one in an urban area and two in rural areas. These projects were collaborative partnerships and can be viewed as early stage clusters or skill ecosystems. The results of the projects have successfully established that vocational education and training (VET) can play an active role in regional innovation and build capacity at the same time. TAFE staff have many of the skills required to foster regional innovation and can refine these skills further through active and ongoing involvement in regional innovation. The challenges faced by the three projects are no more or less than the challenges facing VET generally in an increasingly complex labour market and further projects should be encouraged.