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Now beyond its eleventh printing and translated into twelve languages, Michael Porter's The Competitive Advantage of Nations has changed completely our conception of how prosperity is created and sustained in the modern global economy. Porter's groundbreaking study of international competitiveness has shaped national policy in countries around the world. It has also transformed thinking and action in states, cities, companies, and even entire regions such as Central America.
Based on research in ten leading trading nations, The Competitive Advantage of Nations offers the first theory of competitiveness based on the causes of the productivity with which companies compete. Porter shows how traditional comparative advantages such as natural resources and pools of labor have been superseded as sources of prosperity, and how broad macroeconomic accounts of competitiveness are insufficient. The book introduces Porter's "diamond," a whole new way to understand the competitive position of a nation (or other locations) in global competition that is now an integral part of international business thinking. Porter's concept of "clusters," or groups of interconnected firms, suppliers, related industries, and institutions that arise in particular locations, has become a new way for companies and governments to think about economies, assess the competitive advantage of locations, and set public policy.
Even before publication of the book, Porter's theory had guided national reassessments in New Zealand and elsewhere. His ideas and personal involvement have shaped strategy in countries as diverse as the Netherlands, Portugal, Taiwan, Costa Rica, and India, and regions such as Massachusetts, California, and the Basque country. Hundreds of cluster initiatives have flourished throughout the world. In an era of intensifying global competition, this pathbreaking book on the new wealth of nations has become the standard by which all future work must be measured.
Contents
Contents
Introduction
Preface
1 The Need for a New Paradigm
Conflicting Explanations
Asking the Right Question
Classical Rationales for Industry Success
The Need for a New Paradigm
Toward a New Theory of National Competitive Advantage
The Study
A Broader Concept of Competitive Advantage
PART I
FOUNDATIONS
2 The Competitive Advantage of Firms in Global Industries
Competitive Strategy
Competing Internationally
The Role of National Circumstances in Competitive
Success
3 Determinants of National Competitive Advantage
Determinants of National Advantage
Factor Conditions
Demand Conditions
Related and Supporting Industries
Firm Strategy, Structure, and Rivalry
The Role of Chance
The Role of Government
The Determinants in Perspective
4 The Dynamics of National Advantage
Relationships Among the Determinants
The Determinants as a System
Clustering of Competitive Industries
The Role of Geographic Concentration
The Genesis and Evolution of a Competitive Industry
The Loss of National Advantage
The Diamond in Perspective
PART II
INDUSTRIES
5 Four Studies in National Competitive Advantage
The German Printing Press Industry
The American Patient Monitoring Equipment Industry
The Italian Ceramic Tile Industry
The Japanese Robotics Industry
6 National Competitive Advantage in Services
The Growing Role of Services in National Economies
International Competition in Services
The Relationship Between Services and Manufacturing
National Competitive Advantage in Services
Case Studies in the Development of Competitive Service Industries
PART III
NATIONS
7 Patterns of National Competitive Advantage: The Early Postwar Winners
American Postwar Dominance
Stable Switzerland
Sweden's Choices
Renewing German Dynamism
8 Emerging Nations in the 1970s and 1980s
The Rise of Japan
Surging Italy
Emerging Korea
9 Shifting National Advantage
The Slide of Britain
Crosscurrents in America
Postwar Development in Perspective
10 The Competitive Development of National Economies
Economic Development
Stages of Competitive Development
The Stages and the Postwar Economies of Nations
Postwar Economic Progress in Perspective
PART IV
IMPLICATIONS
11 Company Strategy
Competitive Advantage in International Competition
The Context for Competitive Advantage
Improving the National Competitive Environment
Where and How to Compete
Tapping Selective Advantages in Other Nations
Locating the Home Base
The Role of Leadership
12 Government Policy
Premises of Government Policy Toward Industry
Government Policy and National Advantage
Government's Effect on Factor Conditions
Government's Effect on Demand Conditions
Government's Effect on Related and Supporting Industries
Government's Effect on Firm Strategy, Structure, and Rivalry
Government Policy and the Stages of Competitive Development
Targeting
Government Policy in Developing Nations
The Role of Government
13 National Agendas
The Agenda for Korea
The Agenda for Italy
The Agenda for Sweden
The Agenda for Japan
The Agenda for Switzerland
The Agenda for Germany
The Agenda for Britain
The Agenda for the United States
National Agendas in Perspective
Epilogue
Appendix A. Methodology for Preparing the Cluster Charts
Appendix B. Supplementary Data on National Trade Patterns
Notes
References
Index
About the Author
