Another effect of the diamond's systemic nature is that nations are rarely home to just one competitive industry; rather, the diamond creates an environment that promotes clusters of competitive industries. Competitive industries are not scattered helter-skelter throughout the economy but are usually linked together through vertical (buyer-seller) or horizontal (common customers, technology, channels) relationships. Nor are clusters usually scatteredphysically; they tend to be concentrated geographically. One competitive industry helps to create another in a mutually reinforcing process. Japan's strength in consumer electronics, for example, drove its success in semiconductors toward the memory
chips and integrated circuits these products use. Japanese strength in laptop computers, which contrasts
to limited success in other segments, reflects the
base of strength in other compact, portable products
and leading expertise in liquid-crystal display gained
in the calculator and watch industries.