ABSTRACT
The concept of comparative advantage has altered during the last two decades. While the competitive advantage of many industries in the past was due to the easy availability of raw materials, labor, capital or other resources, today's industries compete by creating new comparative advantages, irrespective of whether they are endowed with any natural advantages. The traditional theory of comparative advantage has been challenged because many countries have indeed succeeded in dramatically altering their comparative advantage. Each nation or industry starts with certain comparative advantages. American economics is rooted in individualism, while Asian and European economics are based on communitarian values. The initial success and growth of Silicon Valley was due to its comparative advantage. Its decline came during the period when it no longer enjoyed those advantages To regain and retain its competitiveness, it must create new advantages that may require a fundamental shift in its management ideology, and reevaluating of its economic ideology.
