The Competitive Advantage of Nations

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 Porter shows how traditional comparative advantages such as natural resources and pools of labor have been superseded as sources of prosperity, and how broad macroeconomic accounts of competitiveness are insufficient.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.

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All Customer Reviews
Average Customer Review:
0 of 0 people found the following review helpful:

Great book, 2008-11-28
I once read an article by Michael Porter called "Strategy and the Internet". In it the author argues against mainstream ideas such as "the internet will change everything in businesses". I did not necessarily agree with the author, but its good to read something critical of popular ideas once in a while. This is why I bought this book, and the author did not dissapoint. Michael Porter challenges alot of "facts" in this book and does a good job. The book is very rich with information and is easy to read. The author picks countries from both the rich world and the developing world. My only problem is that he didnt chose China or India. I think if he was writting the book now he would have definately chosen both of them, but even so, they would have been a goodchoice 30 years ago, I think. Its very challenging to write about "the rise and fall" of economic advantage as a general theory, but the author did an excellent job. I would recommend this book to anyone interested in economics or business, but I dont think socialists will like what they read. The author clearly states that there is a role for the government to play, but not the sort of role communists have in mind. Infact he strongly argues that any interference the wrong way would destroy a nations advantage.


0 of 0 people found the following review helpful:

Why do firms fail?, 2008-08-06
Will a firm that exports finished manufactured goods make more money than a firm that exports raw materials?

The Raw Material depression that hit Latin America cause a massive deficit in the 1990s. Decreases in raw material commodity prices contributed to the increasingly large trade deficit with Japan. The US bought electronics and automobiles from Japan and Japan imported US agricultural. The continue drop in US agricultural commodity price accelerate the trade deficit.

Every nation specializes in specific SIC code domains. US refrigeration and cooling domains as companies like Trane and Carrier establish position and global market share . Latin America could hold the key to removing US trade deficit. The US exports finished goods to Latin America, Wheat, Soybeans, Rice, and Corn to Brazil. Brazil consumes large quantities of US products, acquires easy credit, and the trade deficit shrinks. Local protectionism can not compete against global market price. US ethanol price drive demand for corn and wheat. The US imports biofuels and wood products. Commodity demand booms and a rise in commodity prices occurs. Government regulation attempts to soften fluctuations in commodity prices and appease local demand. Short term relief is possible.

Decreased regulation, removal of trade barriers, and lower taxes help global firms become more competitive. Lower corporate taxes provide more foreign investment. The growth of firms will be associated with increased investment opportunity. Lower taxes help reduce the risk associated with return on investment burdens.


0 of 1 people found the following review helpful:

Mr., 2008-04-23
One of my favorites titles. I started my experience about Porter's Competitiveness by this book.


1 of 1 people found the following review helpful:

Great writting , 2007-11-20
Recently pick up the book by lecturer recommendation, although its dry & boring with huge massive information but open up my mind and keep question the assumption in today market.


0 of 0 people found the following review helpful:

A Classic, 2007-01-24

"The Competitive Advantage of Nations" gives insights into why and how industries, regions, nations or some social groups thrive or fall short. The book explains and presents the theory on the sources of sustained prosperity in the contemporary worldwide economy. This seminal work has assisted countries to develop national policy based on their international competitiveness.

Porter methodically and systematically discusses why some nations achieve continual economic prosperity. He explains the roles of governments and companies in economic development. The author shows the distinction between competitive advantage as a source of wealth and the concept of comparative advantage which had been until recent years the paradigm on thinking about international competition.

Porter based his research in 10 leading trading nations. The book introduced the author's "diamond" which is a new way of looking and comprehending the competitive advantage of a nation. His concept of "clusters" or groups of interconnected firms, suppliers, related industries and institutions in certain locations opened a unique way for organizations and governments to look at economies and assess the competitive advantage of locations and set public policy.

This weighty tome is recommended reading for entrepreneurs, business executives, policy makers, economists and other readers who are interested in ensuring that companies can successfully face the future based on pragmatic assessment of how the firm can gain competitive advantage.

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