The UNIDO Approach
UNIDO has formulated a modular approach to guide the formulation and implementation of cluster development initiatives. This section contains the detailed methodological steps of the UNIDO Approach, which are presented in the form of modules. For more detailed information on each module, please download the respective explanatory documents.
The first step of the UNIDO cluster development approach is the selection of target clusters. A well-designed and participatory selection process based on clearly defined criteria is a precondition for a successful initiative as it allows the identification of those clusters, where the impact of planned interventions can be maximized given the available time and resources. In order to engage in such a selection process, existing clusters first need to be identified and properly mapped...
Governance & CDA
Once a cluster has been selected for support, the UNIDO methodology foresees the appointment of a Cluster Development Agent (CDA) or cluster broker, who facilitates the process of cluster development in the different target clusters. The CDA is appointed at the beginning of the intervention to undertake a cluster diagnostic study. Based on the findings of this initial assessment s/he will work with the cluster for a specified period (over the duration of the project or even beyond) to enable the cluster stakeholders to work together to take the cluster from an underdeveloped one to a performing cluster, and to ultimately establish and operate a cluster governance structure...
A cluster diagnostic study is generally prepared by the Cluster Development Agent and provides the basis for the elaboration of cluster-specific collective action plans. It focuses on an analysis of a cluster’s economic system, including features of the production system, institutional and business linkages, support institutions, and other framework conditions. The diagnostic study is not an academic but rather an action-oriented and heavily participatory exercise, which aims to provide practical and yet sufficiently accurate information that can be used in the formulation and implementation of cluster development activities. The diagnostic study can also serve to collect data for the establishment of a baseline for monitoring and evaluation...
Vision Building & Action Planning
Vision building and action planning are not one-off processes but develop in feedback loops through the life of a cluster initiative. Starting with a discussion on the results of the diagnostic study, cluster stakeholders formulate a shared vision for their future cluster performance or the overall cluster development path, which will be periodically reviewed and, if necessary, refined with time to take into account changes in the cluster or related framework conditions. Action planning then relates to the translation of the vision statement into a realistic and achievable development strategy over time and can be understood as a roadmap. Action plans are also revised periodically and by all cluster stakeholders based on a sound monitoring and evaluation framework...
Implementation refers to the execution of the activities described in the action plan and management thereof. The Cluster Development Agent facilitates this process, but does not engage in direct service provision or resource disbursement to cluster stakeholders. Key focus areas during the implementation process generally include (-) fostering of business linkages and facilitating the mobilization of resources for the financing of joint actions, (-) bridging coordination gaps between demand and offer for business support services by local institutions, and (-) enhancing the skills of cluster stakeholders...
Monitoring & Evaluation
Monitoring and evaluation (M&E) of cluster initiatives is a continuous process, which starts with the drawing up of a clear causal chain. A causal chain outlines how specific inputs and project activities are linked to the expected outputs and outcomes and how they contribute to the impact or overall development objective of a cluster project or programme. The causal chain also makes the risks and assumptions underlying the envisaged achievements of the project explicit. In line with the information needs of various stakeholders, key performance indicators, data collection methods, and reporting responsibilities and frequencies are defined and integrated into an overall monitoring framework...