Problem 

While attempting to run job clusters using a service principal, you receive the error: 

You cannot set the job's identity to <SP ID> because you do not have the required permissions. Please contact your workspace administrator or the user who manages the service principal. 

Additionally, you may see PERMISSION_DENIED: Please contact your administrator. 

Cause

The job clusters are configured to run as a service principal, but the necessary permissions are not correctly set.

Solution

Ensure that the service principal has the 'Service Principal User' role. 

1. Explicitly assign yourself the service principal user role, even after creating the service principal. (Manager does not automatically inherit User permissions.) 
2. Indicate 'can use' permission on the cluster policy. 

For additional information, please refer to the Roles for managing service principals (AWS | Azure | GCP) documentation.