Competitive advantage arises from leadership that
harnesses and amplifies the forces in the diamond
to promote innovation and upgrading. Here are just
a few of the kinds of company policies that will
support that effort:
Create pressures for innovation. A company
should seek out pressure and challenge, not avoid
them. Part of strategy is to take advantage of the
home nation to create the impetus for innovation.
To do that, companies can sell to the most sophisti-
cated and demanding buyers and channels; seek out
those buyers with the most difficult needs; establish
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norms that exceed the toughest regulatory hurdles
or product standards; source from the most advanced
suppliers; treat employees as permanent in order to
stimulate upgrading of skills and productivity.