Criticism on Porter's national diamond model resolves around a number of assumptions that underlie it. As described by Davies and Ellis:
"sustained prosperity may be achieved without a nation becoming 'innovation-driven', strong 'diamonds' are not in place in the home bases of many internationally successful industries and inward foreign direct investment does not indicate a lack of 'competitiveness' or low national productivity".

In his famous book, The Competitive Advantage of Nations, Porter studied eight developed countries and two newly industrialized countries (NICs). The latter two are Korea and Singapore. Porter is quite optimistic about the future of the Korean economy. He argues that Korea may well reach true advanced status in the next decade (p. 383). In contrast, Porter is less optimistic about Singapore. In his view, Singapore will remain a factor-driven economy (p. 566) which reflects an early stage of economic development. Since the publication of Porter's work, however, Singapore has been more successful than Korea. This difference in performance raises important questions regarding the validity of Porter's diamond model of a nation's competitiveness.
Porter has used the diamond model when consulting with the governments of Canada[4] and New Zealand.[5] While the variables of Porter's diamond model are useful terms of reference when analysing a nation's competitiveness, a weakness of Porter's work is his exclusive focus on the 'home base' concept. In the case of Canada, Porter did not adequately consider the nature of multinational activities.[6] In the case of New Zealand, the Porter model could not explain the success of export-dependent and resource-based industries.[7] Therefore, applications of Porter's home-based diamond require careful consideration and appropriate modification.
In Porter's single home-based diamond approach, a firm's