Canada at the Crossroads
Study of Canadian competitiveness with the Monitor Company
Summary
The reference has not verified this book in detail; the summary states only what the title, author and subject establish.
Porter produced this study of Canadian competitiveness for the Business Council on National Issues and the Canadian government, applying the framework from The Competitive Advantage of Nations to a single country.
The reference has not verified the report's detailed findings. The framework Porter applies is his diamond: factor conditions, meaning the inputs available including specialised skills and infrastructure; demand conditions, meaning whether domestic customers are sophisticated and demanding; related and supporting industries, meaning the presence of competitive suppliers and adjacent industries forming clusters; and firm strategy, structure and rivalry, meaning whether domestic competition is intense enough to drive improvement.
Applied to Canada, the analysis identified a set of concerns that Porter and others had raised: an economy dependent on resource extraction and on the exploitation of natural advantages rather than on created advantages; branch plant manufacturing operations owned by foreign parents that conducted little research and served only the domestic market behind tariff protection; weak domestic rivalry in several sectors; low commercial research spending; and an education and training system not producing the specialised skills that upgrading required. The report was produced as the free trade agreement with the United States was taking effect, which removed the protection that had sustained the branch plant structure.
Porter's general prescription in such studies is to upgrade from competing on inherited advantages toward competing on created ones, which requires investment in specialised skills, sophisticated domestic demand, cluster development and genuine domestic competition.
Readers should treat this as a commissioned country study from 1991 whose specific findings are dated, and should verify the report's actual content.
Key takeaways 7
- Competing on inherited natural advantages does not sustain rising living standards, which requires created advantages instead.
- Branch plant operations owned by foreign parents conduct little research and serve only the protected domestic market.
- Removing tariff protection removes the rationale for branch plants, which forces either upgrading or closure.
- Sophisticated and demanding domestic customers drive firms to improve in ways that undemanding markets do not.
- Clusters of competitive suppliers and related industries produce advantages that individual firm policy cannot.
- Weak domestic rivalry produces firms that cannot compete internationally regardless of their protected domestic profitability.
- The specific findings are from 1991 and should be verified rather than assumed current.
Who should read it
Readers interested in applying Porter's national competitiveness framework to a specific country, treating the findings as historical.
About Michael E. Porter
Bishop William Lawrence University Professor Emeritus, Harvard Business School; founder, Institute for Strategy and Competitiveness
Competitive Strategy and the five-forces framework are the primary source for industry analysis, and Competitive Advantage supplied the value-chain vocabulary the field still uses.
Harvard Business School, Institute for Strategy and Competitiveness
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