Keep Your Friends Close and Your Enemies Closer?

On November 2, French prime minister Nicolas Sarkozy and British prime minister David Cameron signed an agreement allowing France and the United Kingdom, two historic foes, to engage in military cooperation with one another.  The two nations will share aircraft carriers and develop a nuclear program together.

In another milestone accord, leaders of the Hollywood and Bollywood film industries, the world’s two largest producers of commercial movies, have signed a pact to strengthen their relationship. Bollywood plans to make at least seven movies in Los Angeles in 2011, with scope for many more. In March 2010, Bollywood and Hollywood joined forces to combat piracy and copyright theft.

The development of industrial districts – clusters of companies within a single industry developed within close geographic proximity, such as Silicon Valley or the footwear industry in Wenzhou, China – has proven the advantages of cooperating with your competitors.  To learn more about this theory, check out Michael Porter’s texts on the issue:

Competitive Advantage

On Competition

Competitive Strategy

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