In the UNIDO context, a cluster is understood to refer to a sectoral and geographical concentration of enterprises and/or individual producers that produce a similar range of goods or services and face similar threats and opportunities.
A cluster encompasses enterprises (MSMEs, but also larger firms) as well as their support institutions from the public and private sectors as well as civil society.
CLUSTER = FIRMS (PRODUCT + PLACE) + SUPPORT INSTITUTIONS
The definition thus highlights two essential features:
The UNIDO Approach focuses on enhancing the performance of existing concentrations by managing the common threats and building on shared opportunities. The foundations for successful cluster developments lie in the creation of social capital and the achievement of collective efficiency.