The Competitive Advantage of Nations 25 years – opening up new perspectives on competitiveness

The purpose of this study is to analyze how The Competitive Advantage of Nations project led by Professor Michael E. Porter has opened up new perspectives on competitiveness of nations and firms for scholars, practitioners and policymakers. With the publication of The Competitive Advantage of Nations (CAON) book in 1990, Professor Michael E. Porter opened up a whole new perspective on competitiveness and clusters, including both new research avenues and new perspectives for practitioners and politicians. By questioning the traditional, more static and macroeconomic, views on competitiveness, he opened up for a new model of microeconomic drivers of long-run firm competitiveness. The new conceptual model, the Diamond model, pointed to the importance of healthy rivalry and dynamic clusters, in the proximate firm environment, as central to our understanding of how firms build sustainable competitive advantages in global markets.

Literature review and conceptual.

To distinguish between short-term, more static, and long-term, more dynamic competitiveness of firms, and the competitiveness of nations and regions, the paper proposes a conceptualization into three interrelated concepts: competitiveness and innovativeness of firms, and attractiveness of nations and regions.

This paper summarizes 40 years of Professor Porter’s seminal research with a focus on the CAON project that began with the 1990 book on The Competitive Advantage of Nations. The paper proposes three interrelated concepts to cover issues of competitiveness: competitiveness (firm’s static advantages), innovativeness (firm’s dynamic advantages) and attractiveness (national/regional advantages).