The development of cultural districts has become a standard practice in policy-making worldwide at different scales – local, regional and national (Braun and Lavanga 2007). Government bodies have used cultural district policies to regenerate and rebrand urban areas, sometimes focusing on increasing cultural consumption, as in the case of museum districts, other times fostering innovation and entrepreneurship, as in the case of cultural production districts. This chapter first provides a definition of cultural districts and its roots in the Marshallian industrial district; secondly, it looks at the agglomeration economies that firms, organisations and individuals enjoy because they are not only co-located in the same area, but also highly interconnected among each other. The argument put forward in this chapter is the importance of intense face-to-face interaction and spatial proximity in the production, distribution and consumption of cultural goods and services.