In Afghanistan, many small businesses operating in the same area perform related work, such as handicrafts, carpet weaving, food processing and other local industries. Such concentrations are known as industrial clusters.
An April 2026 study by UNDP and the United Nations trade agency UNCTAD examined 1,350 micro, small and medium-sized enterprises across five Afghan urban centres. It found that businesses working near one another can benefit from shared skills, raw materials, certain services and market connections, although financial and infrastructure barriers remain.
When ten separate firms must each arrange their own procurement, transport and sales, their costs may be relatively high. Shared training, quality standards and marketing could reduce some of these expenses, but the effects will not be identical for every business.
The research also describes the importance of these clusters for women's economic participation. Regular measurement of job quality and earnings will be necessary.
The question of development here is not simply whether new factories are built, but whether existing craftspeople and small firms can improve their productive capacity.