Government's proper role is as a catalyst and challenger; it is to encourage— or even push— companies
to raise their aspirations and move to higher levels of
competitive performance, even though this process
may be inherently unpleasant and difficult. Government cannot create competitive industries; only
companies can do that. Government plays a role that
is inherently partial, that succeeds only when working in tandem with favorable underlying conditions
in the diamond. Still, government's role of transmitting and amplifying the forces of the diamond is a
powerful one. Government policies that succeed are
those that create an environment in which companies can gain competitive advantage rather than
those that involve government directly in the process, except in nations early in the development process. It is an indirect, rather than a direct, role.