This paper describes the challenges, impediments and lessons learned of a leading Birmingham creative company working in conjunction with Birmingham City University, to deliver a successful combined Technology Strategy Board (TSB) and European Regional Development Fund (ERDF) Knowledge Transfer Partnership (KTP). KTP is a UK-wide programme helping businesses improve their competitiveness, productivity and profitability through the better use of knowledge, technology and skills that reside within the UK Knowledge Base. This paper looks at how the placing of KTPs within the creative industry with its piece-meal gathering of expertise for the delivery of products and services to clients, particularly within the fast moving goods market (FMCG) is different to the vertical supply chains more likely found in engineering and manufacturing in UK industries. It will also look at this unique industry environment as a vital contributor to the UKÕs gross value added (GVA), a key economic measure. It will describe these issues within the context of a case study of a KTP between Clusta Ltd, an interactive 'ideas' agency and Birmingham City University, to implement a systematic innovation procedure within the company. It also explores the impact of the ERDF as a funding partner and contributor to the KTP programme within the context of the Clusta project. This also brings to the fore what innovation means for the creative industry and how organisations such as the National Endowment for Science, Technology and the Arts (NESTA) are responding to the innovation agenda for the industry. Keywords: creative industry, corporate strategy, operation strategy, creative design innovation, supply chain management, university procurement, Technology Strategy Board, European Regional Development Fund