The first of the Asian nations mentioned by Porter (1990: 384-421) is Japan. Japan’s achievement of becoming a major economic power and the rapid rise of many of its industries is examined using the diamond framework. Japan is another country with few natural resources (except natural ports and available hydroelectric power) whose industries took advantage of a disciplined, educated work-force, good labour management relationships and a, more or less, constructive government. These initial advantages were later supplemented by a large pool of engineers, a low cost of capital, a tendency of related diversification for large firms, which promoted clustering, particular home demand conditions and an emphasis on product quality and automation. Fierce, emotional domestic rivalry is another characteristic of competitive Japanese industries.