Recent transformations in the internal and external environment of nations require further developments of a comprehensive and strategic framework to analyze sources of national competitiveness. In order to be competitive, nations not only have to capture their core competitive advantages based on ;;hard” resources (e.g. material determinants) but also need to create and develop competitive attraction utilizing their ;;soft” resources (e.g. non-material determinants). This research is based on the notion that Porter’s single Diamond Model of national competitiveness is limited in its application to assess the overall competitiveness of nations including intangible elements such as culture and values. As a result, this study emphasizes different determinants of ;;soft” resources in explaining national competitiveness.Through the Soft Diamond Model, governments can obtain a better understanding of ;;soft” resources and their relationships to national competitiveness, and thus make the most of utilizing their national resources. This new cultural paradigm is able to provide companies and governments a better understanding of culture and its relationship to the business environment and national competitiveness.
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An Extension of National Competitiveness: Complementing Competitive Advantage through the Soft Diamond Model