Porter's Diamond of National advantages

Topics: Innovation, International trade, Comparative advantage Pages: 34 (7850 words) Published: December 20, 2013
Transit Stud Rev (2008) 15:303–319
DOI 10.1007/s11300-008-0017-2
ENTREPRENEURSHIP AND INTERNATIONAL MANAGEMENT

Cutting Porter’s Last Diamond: Competitive
and Comparative (Dis)advantages in the Dutch Flower
Cluster
Ernesto Tavoletti Æ Robbin te Velde

Received: 14 March 2008 / Accepted: 13 April 2008 / Published online: 10 July 2008 Ó Springer-Verlag 2008

Abstract The Dutch are the world’s leaders in the flower business even though they seem to lack comparative advantage in the traditional sense. Comparative advantages played a role in the history of the Dutch flower cluster and they still have a role today. Based on a critic of Porter’s theories, the investigation suggests that the exploitation of comparative advantages is allowed only to those firms and clusters that already possess a competitive advantage, based on technology, logistics infrastructure, innovation and human skills. So that comparative advantages and competitive advantages join in a sort of helix process based on social innovation and collective learning.

Keywords Dutch flower cluster Á Comparative advantages Á
Competitive advantages Á District Á Innovation Á Cluster
JEL Classification

Q17 Á M16 Á L26

Introduction
The present article is an exploratory case study of the Dutch flower cluster and it is intended to forecast opportunities and threats for its future. The Dutch flower cluster has gone through significant success for decades but recent development in the international markets has raised questions about its competitiveness and environ-

E. Tavoletti (&)
University of Macerata, Macerata, Italy
e-mail: ernesto.tavoletti@unimc.it
R. te Velde
Dialogic Innovation and Interaction, The Hague, The Netherlands e-mail: tevelde@dialogic.nl

123

304

E. Tavoletti, R. te Velde

mental sustainability. Is the Dutch flower cluster going to survive the competition from developing countries with cheap labour, superior climate and increasing long distance distribution? Is there a future in a global economy for the over regulated Dutch flower cluster based on family SMEs and greenhouses?

Our research questions have a general theoretical interest in the cluster literature because agriculture clusters are potentially the more affected by superior Ricardian comparative advantages in developing countries. As the Dutch flower cluster is a very high-tech and knowledge intensive one, this makes the issue even more relevant: Can the socially driven knowledge exchanges (Storper 1993, 1995, 1997) and long lasting ‘‘social fabric’’ rival developing countries advantages on production factors?

Porter is the most cited scholar with reference to clusters’ competitive advantage and he defines a cluster as ‘‘a geographically proximate group of interconnected companies and associated institutions in a particular field linked by commonalities and complementarities’’ (Porter 2000, p.16) with a strong focus on constituent firms and no significant reference to the cluster ‘‘social and territorial’’ knowledge while the most recent literature about cluster competitive advantage shifted from the cluster and its constituent firms to the character of the organizational knowledge within the cluster (Tallman et al. 2004; Asheim et al. 2006). Developing countries’ strong performance has introduced some doubts into the general view. Are comparative advantages based on cheap labour and superior climate taking ‘‘historical revenge’’, as opposed to Porter’s competitive advantages and ‘‘knowledge based clusters’’ (Cooke and Leydesdorff 2006)? The article investigates this theoretical issue through the Dutch flower cluster. ‘‘Theoretical framework and methodology’’ presents our theoretical framework and methodology: starting from a critic of Porter’s competitive advantage approach, we introduce a new theoretical framework based on a revaluation of comparative advantages and their dynamic historical relationship with competitive advantages. ‘‘The Dutch flower cluster’’ provides an...

References: Aktouf O, Chenoufi M, Holford D (2005) The false expectations of Michael Porter’s strategic
management framework
Asheim B, Cooke P, Martin R (eds) (2006) Clusters and regional development; critical reflections and
explorations
Cooke P, Leydesdorff L (2006) Regional development in the knowledge-based economy: the construction
of advantage
Davies H, Ellis P (2000) Porter’s competitive advantage of nations: time for the final judgement?
J Manage Stud 37:1189–1214
De Groot N (2001) Het glastuinbouwcomplex in het 3e millenium (mimeo)
Den Hertog P, Alleblas J, Bongers F (2001) Het glas is halfvol, het glas is halfleeg: Clustermionitor
Glastuinbouw. Dialogic/LEI, Utrecht/Den Haag
Den Hertog P, Kern S (2007) Innovatie in de glastuinbouw (mimeo)
Grant RM (1991) Porter’s competitive advantage of nations: an assessment. Strategic Manage J 12:535–
548
¨ ¨
Haikio M (2002) Nokia: the inside story
Jacobs D, de Jong MW (1992) Industrial clusters and the competitiveness of the Netherlands: empirical
results and conceptual issues
Langford CH, Wood JR, Ross T (2003) Origins and structure of the Calgary wireless cluster. In: Wolfe
DA (ed) Clusters old and new: the transition to a knowledge economy in Canada’s regions
of Policy Studies, Kingston
Martin R, Sunley P (2003) Deconstructing clusters: chaotic concept or policy panacea? J Econ Geogr
3:5–36
Moore JF (1996) The death of competition: leadership & strategy in the age of business ecosystems.
HarperCollins, New York
O’Shaughnessy NJ (1996) Michael Porter’s competitive advantage revisited
Pfeffer J (1994) Competitive advantage through people. Calif Manage Rev 36:9–28
Porter ME (1979) How competitive forces shape strategy
Porter ME (1990a) The competitive advantage of nations. London Free Press, London
Porter ME (1990b) The competitive advantage of nations
Porter ME, van der Linde C (1995) Green and competitive: ending the stalemate. Harvard Bus Rev
73:120–134
Porter ME (1998) On competition. Harvard Business School Press, Boston
Porter ME (2000) Location, competition and economic development: local clusters in a global economy.
Econ Dev Quart 14:15–34
Porter ME (2001) Strategy and the Internet
Prahalad CK, Hamel G (1990) The core competence of the corporation. Harvard Bus Rev 68:79–93
Reich R (1990) Who is us? Harvard Bus Rev 68:53–64
Reich R (1991) Who is them? Harvard Bus Rev 69:77–88
Storper M (1993) Regional ‘‘worlds’’ of production: learning and innovation in technology districts of
France, Italy and the USA. Reg Stud 27:433–456
Storper M (1995) The resurgence of regional economies, ten years later: the region as a nexus of untraded
interdependencies. J Euro Urban Reg Stud 2:191–221
Storper M (1997) The regional world: territorial development in a global economy
The jump from antithesis to synthesis is not a trivial and easy one since it involves a genuine paradigm
shift from labour substitution (the high-tech trajectory) to labour upgrading (Den Hertog and Kern 2007).
319
Tallman S, Jenkins M, Henry N, Pinch S (2004) Knowledge, clusters and competitive advantage
Manage Rev 29:258–271
Yetton P, Craig J, Davis J, Hilmer F (1992) Are diamonds’ a country’s best friend? A critique of Porter’s
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Porter's Diamond Essay
  • Essay about Porter's Diamond
  • Essay on Criticisms of Porter's Diamond
  • Essay on Porter's Diamond
  • Porter's Diamond Essay
  • Porter's Diamond Essay
  • Porter's Diamond Model Essay
  • National Competitive Advantage Research Paper

Become a StudyMode Member

Sign Up - It's Free