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Porter's Diamond in Ethical Mining and Local Procurement

Applying Porter’s notion of NCA to understand how local industries which support national mining industries have, in some cases, evolved along his continuum of NCA from factor-driven NCA, to investment-driven NCA, to innovation-driven NCA, this analysis shall illustrate where the LPRM may support local industries through this evolution.

Potential countries of entry and subsequent modes of entry, shall be identified by assessing how uptake of the LPRM by specific mining eco-system actors my contribute to firm-level and country-level symbiotic efficiencies, attracting foreign direct investment (FDI), intent in further developing NCA and therefore moving counties through porter’s continuum.

Michael Porter’s theory of National Advantage, is a model that is designed to bring an understanding of “the competitive advantage nations or groups possess due to certain factors available to them, and to explain how governments can act as catalysts to improve a country's position in a globally competitive economic environment.

Seeing the eco-system as a system of interdependent “reinforcing factors,” Porter designed the visual representation of this system in the “Diamond Model,” which is depicted here.13 Porter’s Diamond puts forth, that in the development of a national competitive advantage, “industries cannot be made up by singular firms,” but rather “clusters of firms and all participants, in the in the wider industry.” A term of the era, intent on capturing this concept is “eco-system.” However, Porter does stipulate that while typically, industrial national competitive advantage does require the illustrated above reinforcing systems, in the natural resources sector, “competitive advantage, based on only one or two determinants, is possible.”

Here, Porter ultimately describes where a national mining industry, with a factor-driven NCA, fits into the Diamond Model. He further presumes that in this case, NCA can be achieve with “dependent industries involving little sophisticated technology or skills.”16 Within the literature of international development, such a paradigm is resonating of the “resource curse.”

Sources available upon request.

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