The Cluster Development approach involves participatory diagnosis of the problems to build up synergies between institutions and entrepreneurs in the clusters. Cluster Development approach calls for the support institution to revamp its own working system to assume the role of a demand-driven agency in sync with the cluster needs. ADMCL facilitates the industry in improving its competitiveness, by way of cluster- based development programmes, which would be entirely felt- need driven. These programmes are aimed at providing total support solutions to various agencies and institutions in providing support in key areas such as developing models for local interventions and networking linkages, facilitating access of clusters to business development and research services.
Globalization has brought within its fold, increased knowledge-intensity across all economic activities. Knowledge intensive activities such as product design, process engineering, quality control, new management routines and organization of production are needed so that firms compete not only in price, but also through their ability to innovate. Innovation has thus become the key to sustained competitiveness for MSMEs in a globalizing economy to achieve new efficiencies. Enterprise clusters and networks are of particular importance in developing countries because they offer specific market benefits to small firms. Cluster development approach thus, for MSMEs, has a unique potential for specialization, technological capability, adaptability, and innovativeness, in addition to facilitating tacit knowledge flows and through interaction processes.