United Nations Industrial Development Organization (UNIDO)

Overview

MOPAN released its most recent assessment of UNIDO in 2019.

UNIDO is the specialised agency of the United Nations (UN) that promotes industrial development for poverty reduction, inclusive globalisation and environmental sustainability. The mission of UNIDO is to promote and accelerate inclusive and sustainable industrial development (ISID) in member states. UNIDO’s stated comparative advantage is being the only international organisation mandated to support countries in pursuing inclusive and sustainable industrial development.

UNIDO’s 2018-21 organisational theory of change provides a clear vision and direction for the organisation. It states the overall aim to contribute to inclusive and sustainable industrial development (ISID) and to Sustainable Development Goal impacts. However, a lack of clear articulation of UNIDO’s normative role, and of its results for ISID reduces the organisation’s scope for contributing to ISID.

UNIDO’s core strengths, including its technical expertise, networks and knowledge functions, as well as its high levels of staff commitment, are highly valued assets on which the organisation can build. However, it has been slow to improve management and operational processes. Its centralised operational model prevents it from engaging fully with country and regional systems. Financial and personnel resources are greatly constrained, further limiting the speed of change. The organisation is aware of the changes it needs to make to improve operational effectiveness and efficiency as well as partnership working and has begun to implement them.

Performance rating summary

UNIDO organisational performance wheel — Organisational performance

Key findings

UNIDO’s vision of ISID enjoys solid support among member states in line with its mandate for industrialisation. The Lima Declaration is a strong endorsement of UNIDO’s role. It sets out core functions for UNIDO which are complementary to each other (technical co-operation; research and policy advice; standards and compliance; and a convening role) and leaves UNIDO to shape and adapt its pursuit of results in line with available resources.
UNIDO has strong technical expertise, relevant experience and pertinent knowledge. Stakeholders appreciate UNIDO’s technical expertise, particularly in areas that are fundamental to the development of low-income and least developed countries. These include agricultural business, off-grid renewable energy and environmentally friendly production technologies. Such expertise is one of UNIDO’s key comparative advantages.
UNIDO’s leadership has displayed openness to improvement. UNIDO has continuously introduced improvements, such as the increased use of technology to make its processes more efficient, the 2018 update of the evaluation policy and handbook, the 2019 revisions to the Integrated Results and Performance Framework (IRPF), the organisational theory of change, and the new Quality Assessment Framework. UNIDO used the run-up phase to the MOPAN assessment as an occasion to push forward with such reforms, which had lost steam. These changes are a positive signal that the organisation is eager to improve.
UNIDO has successfully collaborated with a large range of stakeholders to build engagement. UNIDO’s operational model is based on collaboration, which the organisation does effectively. Partners value both UNIDO’s experience in accessing bilateral and private sector finance and its positive engagement with other multilateral organisations on joint programmes. UNIDO also excels at providing tailored advice and niche solutions. This is praised by its members and has allowed the organisation to generate deep and long-standing relationships with its partners. In particular, UNIDO effectively co-ordinates its country work with other UN partners to increase its leverage and impact, despite limited country and regional resources.
UNIDO’s development of the Programme for Country Partnership (PCP) model is a positive step towards strategic partnerships. The flagship PCP model provides a potentially effective way to promote coherence and sustainable change at country level so that UNIDO can work at scale. The PCP will require adequate staffing and resourcing as well as sufficient time to deliver its full offering.
Finally, evaluation quality is strong. Evaluations present evidence, findings and conclusions in a balanced way and draw appropriate conclusions. The introduction of the revised evaluation manual and policy in 2018 will help to further strengthen evaluation quality and to place the evaluation function more clearly and centrally within the organisation.

UNIDO would benefit from clarifying its normative role and objectives. The Lima Declaration and the 2030 Agenda offer ample opportunities for UNIDO to develop a strong normative role. Norms and standards feature among the organisation’s four core functions, and the UNIDO Medium-Term Programme Framework 2018-21 makes several references to normative work indeed, including the new strategic objective on knowledge strengthening, introduced in 2018. The organisation’s role in relation to promoting global norms, and its objectives in doing so are, however, not yet clearly prioritised or articulated. One of the main reasons has been its focus on project work.
The continued reduction in the regular budget and increased dependency on earmarked funding pose a challenge to UNIDO’s maintaining both its normative and project implementation roles. Currently UNIDO is committed both to its technical co-operation/project implementation function and to its normative and knowledge function. Earmarked project funding is available primarily for technical co-operation, but only rarely for normative functions. With a reduced regular budget, this limits UNIDO’s normative capacity, and key normative, knowledge-strengthening and policy analysis functions are relatively under resourced. UNIDO’s strong focus on winning and managing individual projects diminishes the extent to which it prioritises strategic normative objectives.
UNIDO has stated its commitment to results-based management (RBM), yet more effort will be needed to close the gap between ambition and practice. UNIDO has yet to fully internalise RBM as an overall orientation for all its activities and resources. For the time being, governance documents, audits and evaluations point to limited implementation. This partly stems from the fact that the IRPF is not yet well-developed, and a results chain from field to headquarters (HQ) is yet to be established. A move to RBM is heralded by the 2019 revised IRPF, boding for a clearer and more consistent results reporting in the future. The most recent Programme and Budget 2020-21 also sets out the intent to align resources to results. Until RBM is fully internalised, the extent to which resources and activities are clearly prioritised to meet the organisation’s objectives will remain limited.
The high level of HQ centralisation of decisions affects UNIDO’s efficiency, effectiveness and relevance at country and regional levels. Decision-making is largely centralised at HQ and relies heavily on the “Executive Board”. While centralised management offers the chance of reaping economies of scale and scope, it limits the agility, relevance and responsiveness of UNIDO in the field. Unclear accountability and a certain lack of transparency remain practical challenges to clear delegation of authority and prompt decision-making at different levels. The contribution of country offices, which represent a significant investment, is not systematically structured to deliver strategic results. Centralised decision-making also led to important delays in implementing projects, which partners have widely cited as a challenge. Delays have negatively affected project quality and effectiveness, while also posing a risk to the organisation’s reputation.
UNIDO does not have the necessary risk management processes in place. A standard approach or documentation for risk analysis, mitigation and reporting has yet to be defined, and the organisation has yet to clarify how much appetite it has for risk, and define risk mitigation approaches. Weak risk identification and assessment exposes UNIDO to reputational, organisational and political risks. Since 2017, UNIDO has taken steps to develop organisational risk management, but progress has been slow.
Challenges remain in articulating and addressing cross-cutting priorities such as governance and human rights. While the organisation has made progress in integrating gender equality and environmental sustainability into its operations, the intended alignment of UNIDO’s work with good governance and human rights (as understood by UNIDO) is not clearly articulated. This is reflected in the absence of policies, in weaknesses in project design and implementation, in results frameworks and in the lack of demonstrable achievements in these areas. The new IRPF introduces a revised framework for assessing ISID which may enable a clearer approach in future.

2019 MOPAN assessment of UNIDO

Assessment

UNIDO

UNIDO 2019 Assessment Report

22 June 2020
Performance at a glance

UNIDO

UNIDO 2019 Performance at a Glance

22 June 2020
Management response

UNIDO

UNIDO 2019 Management Response

19 June 2020

Institutional leads

Republic of Korea

United Nations Industrial Development Organization (UNIDO)

Overview

Performance rating summary

Organisational performance

Results

Key findings

2019 MOPAN assessment of UNIDO

Institutional leads

Our work

Our impact

United Nations Industrial Development Organization (UNIDO)

Overview

Performance rating summary

Organisational performance

Results

Key findings

Areas of strength

Areas of opportunity

2019 MOPAN assessment of UNIDO

Institutional leads

Our work

Our impact