Pressman (1991) observed that the respective Government identifies these clusters to support and promote them as a source of economic growth. Factor Conditions: The position of a business as production capacity, skill manpower availability, infrastructure, legal frameworks etc aided by the government agencies determines the factor conditions. The conditions would determine the performance and ease of doing business in a particular economy. For an example the Chinese manpower is in plenty however the skill level is low, Japan, on the other hand, produces qualified engineers for innovation-driven industrial processes, US and UK have the infrastructure to motivate skill ad industry-oriented education infrastructure.
Therefore the factor in different nations for education infrastructure and policy determines its industrial skill sets as the example infers. Demand Conditions: The condition of demand is very much dependent on the customers in an economy. The more demanding the consumer, the more are the efforts spent by a business or the sector to achieve the desired output, preferred by consumers. This pressure to succeed in the economy makes the firms competitive and prone to innovation to create differentiation to improve competitiveness in quality and product attributes.
The Japanese, Korean and even Taiwan as the major electronic goods manufacturer at very cost-efficient processes. This was the net result of its competitive advantage where the internal consumers in those nations wanted more out of each penny spent. Nevertheless, the export focus of electronic goods was another where these nations ventured out for US and European markets. For product safety, Swedish giants like Volvo, AGA, Atlas developed safer products due to its national demands for safer product, giving this aspect an edge when compared in a Global Context. Related Supporting Industries: The supply chain for any business is dependent upon various sources and alibi or supporting firms.
Therefore the more the quality of competence of the related and supporting business the more is the pressure on the business to improve.
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