Double Diamond

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There is now a body of literature which is critical of Porter’s model.O’Donnell(1997) suggests that two types of critique could be of particular relevance for the study of small open peripheral economies. Those critiques concerning the role of multinational enterprises (MNEs), and those which propose that Porter’s diamond model be reformulated as a “double diamond” or “multiple diamond” model. As regards MNEs, Porter has been criticised for largely excluding foreign-owned MNEs as contributors to the competitive advantage of advanced host economies (unless they “become part of the host country diamond”). Accordingto Porter, many MNE subsidiaries lack key managerial and R&D functions and, as a result, the information flow and technical interchange between such foreign-owned subsidiaries and their local business partners will be limited. Further-more, the free and open flow of information might be impeded due to cultural differences between foreign firms and local business partners.

Although Porter when referring to developing countries, acknowledges that foreign MNEs can occasionally serve to “seed” a cluster, the main thrust of his theory puts the major emphasis on 2.

Clancy et al. (1998) include an outline of critiques of Porter, while Pentinnen (1994) provides a more detailed survey of such critiques.

See also Porter's Diamond of National Advantage

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