Cluster Development Programme

UNIDO is the UN specialized industrial agency mandated to promote industrial development and international industrial cooperation. It has implemented technical cooperation projects based on cluster and network development since the mid 1990s with the following assumptions:

  • Clustering and networking among enterprises promotes enterprise competitiveness.
  • Public policy can facilitate clustering and networking.
  • Support targeted at groups of enterprises is more efficient and effective than if targeted at individual enterprises.


Programme Brief

The SME Cluster and Network Development Programme (CND) in Pakistan was initiated in 2001 as a component of the Integrated Programme for Pakistan. A small pilot project was launched to create awareness within Pakistan of the relevance and benefits of the UNIDO SME CND methodology for the development of the country’s industrial SMEs.  Limited to five clusters, and with very limited financial resources from UNIDO and substantial in-kind support from various national bodies in the public and private sectors, this project succeeded in popularising the UNIDO approach throughout the development community in Pakistan, leading to the signing of a follow-up project for the implementation of specific sub-projects in the five pilot clusters under a self-financed trust fund agreement with the Trade Development Authority of Pakistan (TDAP - formerly EPB) and with some co-funding from UNIDO. 

In the meantime, several other agencies adopted this approach and are now promoting some 20 additional clusters with UNIDO’s methodological support, with the number expected to rise significantly in the coming years.  In order to provide a stable and sustainable basis for UNIDO to continue to offer this methodological support, this project proposes to establish a UNIDO-funded focal point of experts and support staff in Pakistan that will become the core group to coordinate and promote best practices in CND, and to scale up CND activities to ensure that the end result will be a very high impact on industrial SMEs in the country.  In addition, because of the unique approach adopted in Pakistan, involving high impact with limited funding, the project will document the Pakistani experience and best practices, and prepare materials disseminating information about the approach.  These will be used to refine and adopt the UNIDO approach to CND in subsequent projects in other countries.



"A cluster is a sectoral and geographical concentration of small/medium enterprises facing common opportunities and threats."
Definition of a cluster