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 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.

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.