Hi guys, welcome back to Global Business Environment. We're still in module six. This will be the sixth, and final part of module six. In which we've been trying to answer the question, is the world dominated by free trade, freer trade or managed trade? If you recall last time we had really got into depth into the Porter's Diamond Model. And we started with the examples of Hollywood in the United States of America as a cluster of success, and a cluster source of exports around the world. We were looking at the practical creation of comparative or competitive advantage. That was com, more formally discussed in a previous module. So let's go back to this model, and let's talk about some of these other factors in the diamond. We looked at factor conditions specifically. Let's move on now to related and supporting industries. So you've got in the early part of the 1900s, this cluster of success, or this industry developing, this creative media industry probably largely dri, or driven in most part by the motion pic, picture or the movie industry, and we saw that there were these unique factor conditions that developed. And as more and more people were attracted to work there, and more movies were made what happens, what happened there and what happens in other industries is that, is that related and supporting industries develop. So, for example, in the case of Hollywood, not only did you see, the movies being made there, but you saw costume and makeup companies develop. You saw the studio design and the financing of films, companies related those particular aspect of film development crop up, and grow in that part of the country. So not only did you have the movie studios themselves. But you saw related, and supporting industries or suppliers locate close by to facilitate the development of the product. This co-location, we call it, facilitates communication, innovation, and just the development of better products and services. And you see it in many industries. You see a computer company like Dell in the United States, headquartered in Austin, Texas. And it had a number of suppliers that it convinced to build right around them in the Austin, Texas region to facilitate the manufacture of computers there in the 1980s. And as these related and supporting industries develop, we see companies really emerge, and we see new strategies. And hopefully, for the success of the industry, and also for the benefit of customers, we see rivalry or competition occur. And the reason this is important is, if the infrastructure in the laws and regulations in the economy don't support rivalry, then this cluster probably won't develop as successful, as successfully. If competition is allowed, the co-location of these companies, the, the, the focal companies, and these related and supporting companies. Creates further improvements as they compete for more dollars, and more success, more exports. And so they push each other to do better. Sometimes we think that seeing several companies together in one location is an example of, of a lack of competition, but in fact forces forces companies to do better for the customer. And that in fact is this final category, demand conditions, what you would expect in any region of the world, or cluster that has this famous product or service made, or produced there, is you have very demanding consumers. You have for example in the Hollywood region, some of the most critical, and the most interested in the creative media products, the movies, the music being made there located right there in the region. And so, those demanding customers push the companies to compete and for better you know, better actors and actresses, and even better conditions to develop. And all this is encouraged by other or, the, the factors reinforcing themselves. We see university programs developed to train eh, the human capital in these in the particular cluster of success. For example if it were if this were a cluster that was focused on the aviation or aircraft industry, and we saw airplanes being made and the parts supplied to make the planes also located in the same region. We would expect University programs to develop perhaps, in cooperation with the government or from private institutions, to educate individuals to work in that industry. And so, this is how a cluster develops. You have demanding customers, who want better products. You have companies trying to improve themselves. You have individual employees trying to improve themselves. And this diamond reinforces itself, and allows an area to develop a cluster of success. And you, you'll see it all across the world. You see regions known for food for high technology products,. For creative products, and so most economic development officials across the world are actively trying to cooperate with the private sector, the governmental sector, to create clusters of success to improve their export position, and to be able to buy better imports from across the world. And so this is really where we are today, with managed trade. We see companies and governments actively managing their positions in competition for more exports, and better imports. This concludes our module six in which we've answered the question, or attempted to answer the question is the world dominated by free trade, freer trade, or managed trade, and we've deter, determined that it's not completely free trade. It's definitely freer, or managed trade, in today's world, as demonstrated by this model framework, Porter's Diamond. Thank you.
