The Competitive Advantage
of Nations, States and Regions
Professor Michael E. Porter
Harvard Business School
National Council of Professors
Kuala Lumpur, Malaysia
July 7, 2011
This presentation draws on ideas from Professor Porter’s articles and books, in particular, The Competitive Advantage of Nations (The Free Press, 1990),
“Building the Microeconomic Foundations of Competitiveness,” in The Global Competitiveness Report (World Economic Forum), “Clusters and the New
Competitive Agenda for Companies and Governments” in On Competition (Harvard Business School Press, 2008), and ongoing research on clusters and
competitiveness. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means - electronic,
mechanical, photocopying, recording, or otherwise - without the permission of Michael E. Porter. Further information on Professor Porter’s work and the
Institute for Strategy and Competitiveness is available at www.isc.hbs.edu
20110707 – Malaysia VC – v3 07072011 – prepared by RA Stacie Rabinowitz
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Copyright © 2011 Professor Michael E. Porter
Prosperity Performance
OECD Countries
PPP-adjusted GDP per
Capita, 2010 ($USD)
OECD Average: 3.68%
$50,000
United States
Switzerland
$40,000
Iceland
Denmark
Netherlands
Austria Canada
Sweden
Ireland
Australia
Belgium
Germany
Finland
France
Japan UK
$30,000
OECD Average: $30,592
Spain
Israel
Italy
New Zealand
South Korea
Greece
Slovenia
Czech Republic
Slovakia
Estonia
Portugal
$20,000
Hungary
Mexico
Poland
Chile
Turkey
$10,000
$0
1%
2%
Note: Luxembourg Excluded
3%
4%
5%
6%
7%
8%
Growth of Real GDP per Capita (PPP-adjusted), CAGR, 2000-2010
Source: EIU (2011), authors calculations
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Copyright © 2011 Professor Michael E. Porter
Prosperity Performance
Lower and Middle Income Countries
PPP-adjusted GDP per
Capita, 2010 ($USD)
$20,000
Sample Average: 5.67%
$18,000
Croatia
$16,000
Panama
Lithuania
Russia
Argentina
Uruguay
Malaysia
$14,000
Latvia
Botswana
Lebanon
Trinidad and Tobago
Mauritius
$12,000
Venezuela
Serbia
Brazil
Costa Rica
South Africa
Macedonia
Thailand
Colombia
Algeria
Ecuador
Guatemala
$10,000
$8,000
El Salvador
$6,000
Jamaica
$4,000
Paraguay
Bolivia
Honduras
Namibia
Jordan
Egypt
Syria
Philippines
Kyrgyz Republic
Pakistan
Nicaragua
Cameroon Senegal Mauritania
Kenya
Benin
Zambia
Madagascar
Nepal
Burkina Faso Mali
Zimbabwe (-2.89%)
$2,000
$0
2%
3%
4%
5%
Kazakhstan
Bulgaria
Iran
Romania
Dominican Republic
Tunisia
Peru
Bosnia and Hercegovina
China (12.47%)
Albania
Sample Average: $6,720
Ukraine
Morocco
Angola (11.05%)
Sri Lanka
Georgia
India
Mongolia
Vietnam
Moldova
Nigeria
Ghana
Chad
Cambodia
Uganda
Bangladesh
Tanzania
Ethiopia
Mozambique
Rwanda Malawi
Indonesia
6%
7%
8%
9%
10%
Growth of Real GDP per Capita (PPP-adjusted), CAGR, 2000-2010
Source: EIU (2011), authors calculations
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Copyright © 2011 Professor Michael E. Porter
Innovation Output
Selected Countries, 1999 to 2009
Average U.S. utility patents per
1 million population, 2007-2009
Japan
Taiwan
250
United States
200
Israel
Finland
Switzerland
150
Sweden
South Korea
Germany
Canada
100
Singapore
Denmark
Belgium
50
Netherlands
Austria
Australia
Norway
France
Hong Kong
Ireland
UK
New Zealand
Italy
Hungary
Mexico South Africa Russia
0
-5%
0%
China (33.80%)
Malaysia
Spain
5%
10%
CAGR of US-registered patents, 1999 to 2009
India
15%
20%
10,000 patents (avg. 1999 – 2009) =
Source: USPTO (2010), Groningen Growth and Development Centre, Total Economy Database (2010)
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Copyright © 2011 Professor Michael E. Porter
What is Competitiveness?
• Competitiveness is the productivity with which a nation uses its human,
capital, and natural resources.
– Productivity sets the sustainable standard of living (wages, returns on
capital, returns on natural resources)
– It is not what industries a nation competes in that matters for prosperity, but
how it competes in those industries
– Productivity in a national economy arises from a combination of domestic
and foreign firms
• Only business can create wealth
• Nations compete to offer the most productive environment for business
• The public and private sectors play different but interrelated roles in
creating a productive economy
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Copyright © 2011 Professor Michael E. Porter
What Determines Competitiveness?
Endowments
•
Endowments create a foundation for prosperity, but true prosperity is created by productivity in the use
of endowments
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Copyright © 2011 Professor Michael E. Porter
What Determines Competitiveness?
Macroeconomic Competitiveness
Human
Macroeconomic
Development
Policies
and
Political
Institutions
Macroeconomic
Policies
Endowments
•
Macroeconomic competitiveness sets the potential for high productivity, but is not sufficient
•
Endowments create a foundation for prosperity, but true prosperity is created by productivity in the use
of endowments
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Copyright © 2011 Professor Michael E. Porter
Macroeconomic Competitiveness
Macroeconomic
Policies
•
•
Fiscal policy
–
–
•
•
•
Government surplus/deficit
Government debt
Human development
–
–
Monetary policy
–
–
–
Social Infrastructure and
Political Institutions
•
Inflation
Business cycle management
Savings
Political institutions
–
–
–
–
–
•
8
Political freedom
Voice and accountability
Political stability
Government effectiveness
Decentralization of economic policymaking
Rule of law
–
–
–
–
–
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Basic education
Health
Security
Civil rights
Judicial independence
Efficiency of legal framework
Freedom from corruption
Copyright © 2011 Professor Michael E. Porter
Rank in Global
Corruption Index,
2009
Corruption Perception Index, 2009
United Kingdom
Spain
Portugal
Lebanon
Iran
High
corruption
Netherlands New Zealand
Canada
Hong Kong
United States
Finland
Iceland
Norway
Low
corruption
Israel
Botswana
Mauritius
Costa Rica
Hungary
Poland
South Africa
Malaysia
Namibia
Italy
Cuba
Saudi Arabia
Tunisia
Kuwait
Croatia
Georgia
Romania
Greece
Ghana
FYR Macedonia
China
Brazil
Colombia
Thailand
Burkina Faso
Swaziland
Guatemala
Serbia
El Salvador
India
Malawi
Panama
Mexico
Zambia
Rwanda
Albania
Jamaica
Senegal
Madagascar
Gambia
Niger
Algeria Mali
Egypt
Togo
Vietnam
Ethiopia
Tanzania
Uganda Mongolia
Honduras
Mauritania
Nigeria
Pakistan
Mozambique
Cameroon
Bangladesh
Philippines
Belarus
Ukraine
Kenya
Russia
Zimbabwe
Paraguay
Côte d´Ivoire
Cambodia
Laos
Venezuela
DRC
Haiti
Burundi
Chad
Turkmenistan
Guinea
Iraq
Myanmar
Uzbekistan
Equatorial Guinea
Sudan
Chile
Improving
Worsening
Change in Rank, Global Corruption Report, 2009 versus 2006
Note: Ranks only countries available in both years (161 countries total)
Source:Global Corruption Report, 2010
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Copyright © 2011 Professor Michael E. Porter
What Determines Competitiveness?
Microeconomic Competitiveness
Quality of the
National
Business
Environment
State of Cluster
Development
Sophistication
of Company
Operations and
Strategy
Macroeconomic Competitiveness
Human
Macroeconomic
Development
Policies
and
Political
Institutions
Macroeconomic
Policies
Endowments
•
Productivity ultimately depends on improving the microeconomic capability of the economy and the
sophistication of local competition
•
Macroeconomic competitiveness sets the potential for high productivity, but is not sufficient
•
Endowments create a foundation for prosperity, but true prosperity is created by productivity in the use
of endowments
20110707 – Malaysia VC – v3 07072011 – prepared by RA Stacie Rabinowitz
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Copyright © 2011 Professor Michael E. Porter
What Determines Competitiveness?
The external business
environment conditions
that enable company
productivity and
innovation
Microeconomic Competitiveness
Quality of the
National
Business
Environment
State of Cluster
Development
Sophistication
of Company
Operations and
Strategy
Macroeconomic Competitiveness
Macroeconomic
Policies
Social
Infrastructure
and Political
Institutions
Endowments
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Copyright © 2011 Professor Michael E. Porter
Quality of the National Business Environment
Context for
Firm
Strategy
and Rivalry
• Local rules and incentives that
encourage investment and productivity
Factor
(Input)
Conditions
• Access to high quality business
inputs
– e.g. salaries, incentives for capital
investments, intellectual property
protection, corporate governance
standards
Demand
Conditions
• Open and vigorous local competition
– Openness to foreign competition
– Competition laws
• Sophisticated and demanding local
customers and needs
–
–
–
–
Human resources
– e.g., Strict quality, safety, and
Capital availability
environmental standards
Related and
Physical infrastructure
– Consumer protection laws
Administrative and information
Supporting
infrastructure (e.g., registration,
Industries
permitting, transparency)
– Scientific and technological
• Availability of suppliers and supporting
infrastructure
– Efficient access to natural endowments industries
• Many things matter for competitiveness
• Successful economic development is a process of successive upgrading, in which the
business environment improves to enable increasingly sophisticated ways of competing
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Copyright © 2011 Professor Michael E. Porter
What Determines Competitiveness?
A critical mass of firms
and institutions in each
field to harness efficiencies
and externalities across
related entities
Microeconomic Competitiveness
Quality of the
National
Business
Environment
State of Cluster
Development
Sophistication
of Company
Operations and
Strategy
Macroeconomic Competitiveness
Social
Infrastructure
Macroeconomic
and
Political
Policies
Institutions
Social
Macroeconomic
Infrastructure
Policies
and
Political
Institutions
Endowments
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Copyright © 2011 Professor Michael E. Porter
State of Cluster Development
Tourism Cluster in Cairns, Australia
Public Relations &
Market Research
Services
Travel agents
Tour operators
Restaurants
Attractions and
Activities
Food
Suppliers
Local
Transportation
e.g., theme parks,
casinos, sports
Property
Services
Maintenance
Services
Local retail,
health care, and
other services
Souvenirs,
Duty Free
Airlines,
Cruise Ships
Hotels
Banks,
Foreign
Exchange
Government agencies
Educational Institutions
Industry Groups
e.g. Australian Tourism Commission,
Great Barrier Reef Authority
e.g. James Cook University,
Cairns College of TAFE
e.g. Queensland Tourism
Industry Council
Sources: HBS student team research (2003) - Peter Tynan, Chai McConnell, Alexandra West, Jean Hayden
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Copyright © 2011 Professor Michael E. Porter
Kenya’s Cut Flower Cluster
Government Agencies, NGOs & Industry Associations
Horticultural Crops Development Authority (HCDA)
Government Export Policies targeting Horticulture
Government Policy for Revitalizing Agriculture; National Export Strategy; Export
Promotion Council (EPC)
Non-Governmental Organizations
The Rural Enterprise Agri-Business Promotion Project (USAID, CARE, IFAD)
Horticultural Produce Handling Facilities Project (JBIC)
Plantstock
Greenhouse;
Shading
Structures
Trade & Industry Associations
Kenya Flower Council (KFC)
Fresh Produce Exporters Association of Kenya (FPEAK)
Regional Growers Associations e.g., North & South Kinangop; Lake Naivasha, etc
Irrigation
technology
Pre-Cooling
Technology
Fertilizers,
pesticides,
herbicides
Agricultural
Cluster
Horticultural
Cluster
Post-Harvest
Handling;
Transport to
Market
Flower
Farming
Post-Harvest
Cooling
Technology
Grading /
Packaging Sheds
Packaging &
Labeling
Materials
Refrigerated
Trucks
Freight
Forwarders
Education, Research & Quality Standards Organizations
Research Institutions:
Clearing and
Forwarding
Agents
Public universities with post graduate degrees in
horticulture:
Air Carriers
(Commercial /
Charters)
Kenya Agricultural Research Institute (KARI)
International Center for Insect Physiology and Ecology (ICIPE)
University of Nairobi; Jomo Kenyatta University of Agriculture & Technology
(Fruits & Vegetables)
Quality & Standards:
EUREGAP Standard (UK & Dutch Supermarkets)
Kenya Plant Health Inspectorate Services (KEPHIS)
Tourism
Cluster
Sources: MOC student team research by Kusi Hornberger, Nick Ndiritu, Lalo Ponce-Brito, Melesse Tashu, Tijan Watt, Harvard Business School, 2007
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Copyright © 2011 Professor Michael E. Porter
Development of the Australian Wine Cluster
1930
1965
1980
1991 to 1998
First oenology
course at
Roseworthy
Agricultural
College 1955
Australian Wine
Bureau
established
Australian Wine
and Brandy
Corporation
established
1990
New collective
organizations created
for education,
research, market
information, and
export promotions
1970
Winemaking
school at Charles
Sturt University
founded
Australian Wine
Research
Institute founded
Winemaker’s
Federation of
Australia
established
1950s
1960s
1970s
1980s
1990s
Import of
European winery
technology
Recruiting of
experienced
foreign investors,
e.g. Wolf Bass
Continued inflow
of foreign capital
and
management
Creation of
large number of
new wineries
Surge in exports
and international
acquisitions
Source: Michael E. Porter and Örjan Sölvell, The Australian Wine Cluster – Supplement, Harvard Business School Case Study, 2002
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Copyright © 2011 Professor Michael E. Porter
National Cluster Export Portfolio
Malaysia, 1999-2009
4.0%
Entertainment and Reproduction Equipment
Malaysia’s world export market share, 2009
3.5%
Change (99-09)
Information Technology (6.24%)
Rising Exports
Change In Malaysia’s average
world export share: - 0.16%
Declining Exports
3.0%
Construction Materials (1.12%)
Hospitality and Tourism (1.22%)
2.5%
Furniture
2.0%
1.5%
1.0%
Oil and Gas Products
Building Fixtures and Equipment
Lighting
And
Electrical
Jewelry, Precious Metals and Collectibles
Chemical Products
Malaysia’s average
world export share:
1.34%
Motor Driven Products
Apparel
Transportation and Logistics
Forest Textiles
Communications Products
Metal Mining and Services
Medical Production Manufacturing
Devices
Technology
Automotive
0.5%
Business Services
-1.0%
Plastics
Processed Food
Analytical Instruments
Communications Equipment
0.0%
-1.2%
Agricultural Products
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
Change in Malaysia’s world export market share, 1999 – 2009
Source: Prof. Michael E. Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard Business
School; Richard Bryden, Project Director. Underlying data drawn from the UN Commodity Trade Statistics Database and the IMF BOP statistics.
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0.2%
0.4%
Exports of US$2.3 Billion =
Copyright © 2011 Professor Michael E. Porter
Cluster Linkages and Economic Diversification
Fishing &
Fishing
Products
Textiles
Hospitality
& Tourism
Agricultural
Products
Processed
Food
Jewelry &
Precious
Metals
Transportation
& Logistics
Distribution
Services
Business
Services
Financial
Services
Building
Fixtures,
Equipment &
Services
Construction
Materials
Heavy
Construction
Services
Lightning &
Electrical
Equipment
Power
Generation
Medical
Devices
Communications
Equipment
Forest
Products
Heavy
Machinery
Production
Technology
Motor Driven
Products
Tobacco
Oil &
Gas
Mining & Metal
Automotive
Aerospace Manufacturing
Engines
Plastics
Footwear
Aerospace
Vehicles &
Defense
Analytical
Instruments
Biopharmaceuticals
Chemical
Products
Apparel
Furniture
Entertainment
Information
Tech.
Education &
Knowledge
Creation
Publishing
& Printing
Prefabricated
Enclosures
Leather &
Related
Products
Sporting
& Recreation
Goods
Note: Clusters with overlapping borders or identical shading have at least 20% overlap (by number of industries) in both directions.
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Copyright © 2011 Professor Michael E. Porter
Share of World Exports by Cluster
Malaysia, 2009
Fishing &
Fishing
Products
Processed
Food
Hospitality
& Tourism
Business
Services
Financial
Services
Prefabricated
Enclosures
Agricultural
Products
Transportation
& Logistics
Distribution
Services
Jewelry &
Precious
Metals
Textiles
Entertainment
Furniture
Building
Fixtures,
Equipment &
Services
Aerospace
Vehicles &
Information Defense
Tech.
Forest
Products
Power
Generation
Heavy
Machinery
ceuticals
Chemical
Products
Motor Driven
Products
Apparel
Automotive
Plastics
LQ > 4
Aerospace Mining & Metal
Engines Manufacturing
LQ > 2
Leather &
Related
Products
LQ > 1.
Sporting
& Recreation
Goods
LQ, or Location Quotient, measures the country’s share in cluster exports relative to its overall share of world exports.
An LQ > 1 indicates an above average export share in a cluster.
20110707 – Malaysia VC – v3 07072011 – prepared by RA Stacie Rabinowitz
Production
Technology
Tobacco
Oil &
Gas
Footwear
Heavy
Construction
Services
Lightning &
Electrical
Equipment
Analytical
Education &
Instruments
Knowledge
Medical
Creation
Devices
Communications
Publishing
Equipment
& Printing
Biopharma-
Construction
Materials
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Marine
Equipment
Copyright © 2011 Professor Michael E. Porter
Geographic Influences on Competitiveness
Neighboring Countries
Nation
Regions and Cities
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Copyright © 2011 Professor Michael E. Porter
Prosperity Performance
U.S. States, 1999 to 2009
$70,000
Delaware
Gross Domestic Product per Capita, 2009
$65,000
High but declining
versus U.S.
Wyoming
U.S. GDP per Capita
Real Growth Rate: 0.86%
Alaska
High and rising
prosperity versus U.S.
Connecticut
$60,000
New York
Massachusetts
New Jersey
$55,000
Washington
$50,000
Illinois
Nevada
U.S. GDP per
Capita: $46,093
Minnesota
Texas
North Carolina
New Hampshire
Rhode Island
Kansas
Pennsylvania
Wisconsin
Indiana
Ohio
Utah
Missouri
Florida
Maine
Arizona
Tennessee
Georgia
Michigan
$35,000
New Mexico
Kentucky
South Carolina
West Virginia
North Dakota
Nebraska
Louisiana
$45,000
$40,000
Virginia
Hawaii
Maryland
Colorado California
Iowa
Oregon
Oklahoma
Vermont
Alabama
Arkansas
Montana
Idaho
Mississippi
Low and declining
versus U.S.
South Dakota
Low but rising versus U.S.
$30,000
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Gross Domestic Product per Capita Real Growth Rate, 1999 to 2009
Notes: Real GDP figures in 2005 chained US dollars from the Bureau of Economic Analysis. Growth rate is calculated as compound annual growth rate. D.C. excluded
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Copyright © 2011 Professor Michael E. Porter
Regions and Competitiveness
• Economic performance varies significantly across sub-national
regions (e.g., provinces, states, metropolitan areas)
• Many essential levers of competitiveness reside at the regional level
• Regions specialize in different sets of clusters
• Cluster strength directly impacts regional performance
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Copyright © 2011 Professor Michael E. Porter
Specialization of Regional Economies
Leading Clusters by U.S. Economic Area, 2008
Denver, CO
Business Services
Medical Devices
Entertainment
Oil and Gas Products and Services
Chicago, IL-IN-WI
Metal Manufacturing
Lighting and Electrical Equipment
Production Technology
Plastics
Pittsburgh, PA
Education and Knowledge Creation
Metal Manufacturing
Chemical Products
Power Generation and Transmission
Boston, MA-NH
Analytical Instruments
Education and Knowledge Creation
Medical Devices
Financial Services
Seattle, WA
Aerospace Vehicles and Defense
Information Technology
Entertainment
Fishing and Fishing Products
New York, NY-NJ-CT-PA
Financial Services
Biopharmaceuticals
Jewelry and Precious Metals
Publishing and Printing
San Jose-San Francisco, CA
Business Services
Information Technology
Agricultural Products
Communications Equipment
Biopharmaceuticals
Los Angeles, CA
Entertainment
Apparel
Distribution Services
Hospitality and Tourism
San Diego, CA
Medical Devices
Analytical Instruments
Hospitality and Tourism
Education and Knowledge Creation
Raleigh-Durham, NC
Education and Knowledge Creation
Biopharmaceuticals
Communications Equipment
Textiles
Dallas
Aerospace Vehicles and Defense
Oil and Gas Products and Services
Information Technology
Transportation and Logistics
Houston, TX
Oil and Gas Products and Services
Chemical Products
Heavy Construction Services
Transportation and Logistics
Atlanta, GA
Transportation and Logistics
Textiles
Motor Driven Products
Construction Materials
Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.
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Copyright © 2011 Professor Michael E. Porter
The Evolution of Regional Economies
San Diego
Climate
and
Geography
Hospitality and
Tourism
Sporting Goods
Transportation
and Logistics
Power Generation
Aerospace Vehicles
Communications
Equipment
Information Technology
Analytical Instruments
U.S.
Military
and Defense
Education and
Knowledge Creation
Bioscience
Research
Centers
1910
1930
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1950
Biotech / Pharmaceuticals
1970
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Medical Devices
1990
Copyright © 2011 Professor Michael E. Porter
Regions and Competitiveness
• Economic performance varies significantly across sub-national
regions (e.g., provinces, states, metropolitan areas)
• Many essential levers of competitiveness reside at the regional level
• Regions specialize in different sets of clusters
• Cluster strength directly impacts regional performance
• Each region needs its own distinctive competitiveness strategy and
action agenda
• Improving competitiveness requires effective policy collaboration
between regions and the national government
• Decentralization is important to foster regional specialization, internal
competition, and greater government accountability
• Effective decentralization requires clarity on roles and responsibilities,
and sufficient administrative capacity at local and regional level
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Copyright © 2011 Professor Michael E. Porter
Competitiveness and Integration with Neighboring Countries
Turkey’s Neighborhood
• Turkey sits at the crossroad between Europe and the Middle East
• Economic coordination among neighboring countries can significantly enhance competitiveness
• Integration offers greater opportunities than participation in broader economic forums (e.g., EU)
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Copyright © 2011 Professor Michael E. Porter
Competitiveness and the Neighborhood
• Opening trade and investment among neighbors
– Expands the available market
– A nation’s neighbors are its most natural trading and investment partners
– The natural path of internationalization for local firms is the neighborhood
– Open trade and investment make each country a more attractive location for
investment
• Economic coordination to drive improvements in the business
environment
– Capture synergies in policy and infrastructure
– Gain greater clout in international negotiations
• External agreements to help overcome domestic political and
economic barriers to reform
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Copyright © 2011 Professor Michael E. Porter
Competitiveness and Integration with Neighboring Countries
Central American Logistical Corridor
Belize
Mexico
Guatemala
Honduras
Nicaragua
El Salvador
Roads
Ports
Airports
Logistic Corridor
Costa Rica
Country Boundary
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Panama
Copyright © 2011 Professor Michael E. Porter
The Shifting Process of Economic Development
Old Model
New Model
• Government drives economic
• Economic development is a
development through policy decisions
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collaborative process involving
government at multiple levels,
companies, teaching and research
institutions, and private sector
organizations
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Copyright © 2011 Professor Michael E. Porter
Creating a National Economic Strategy
National Value Proposition
• What is the distinctive competitive position of a nation
given its location, legacy, existing strengths, and potential
strengths?
– What unique value as a business location?
– For what types of activities and clusters?
– And what roles with neighbors, the region, and the broader
world?
Achieving and Maintaining Parity
with Peers
Developing Unique Strengths
• What elements of the business
environment can be unique strengths
relative to peers/neighbors?
• What existing and emerging clusters
represent local strengths?
• What weaknesses must be addressed to
remove key constraints and achieve parity
with peer countries?
• Priorities and sequencing are necessity in economic development
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Copyright © 2011 Professor Michael E. Porter
Universities’ Role in Competitiveness
Business Environment
Quality
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Competitiveness
Efforts
Educate future managers, researchers,
and employees
Transfer of technology and knowledge
Adapt global knowledge to local
circumstances
Act as a launching pad for new
companies and clusters
Create networks of alumni and other
partners to enable collaboration
Collect and provide data on all aspects
of the economy
Create new knowledge
Raise visibility and provide profile to the
region and its economy
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Generate specific data and analysis on
competitiveness
Educate public and private leaders
about competitiveness
Provide a platform for public-private
action
Initiate and lead competitiveness efforts
Competition in the global economy is increasingly knowledge-driven, putting universities
at the very heart of the competitiveness agenda
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Copyright © 2011 Professor Michael E. Porter
Universities and Cluster Development
• Universities should identify and reach out to local clusters
• Universities should focus on clusters where they have a material
impact on cluster performance
• Universities should consider specializing in areas in which the local
economy has an established position
• Universities should, alone or with others, get involved in upgrading the
cluster-specific cluster environment
– Conduct joint R&D programs with companies
– Develop training programs with the cluster
– Participate in the attraction of companies and research centers
important for the development of the cluster
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Copyright © 2011 Professor Michael E. Porter