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Paper info: Scrutinizing an economic development model - The Taiwanese semiconductor industry revisited


Scrutinizing an economic development model - The Taiwanese semiconductor industry revisited


Tommy Shih
Uppsala University
Tommy Shih

Place of Publication

The paper was published at the 25th IMP-conference in Marseille, France in 2009.


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AbstractTo promote industrial development and economic growth is a vital issue for governments all over the world. The ideals guiding policymakers in their endeavours, strongly influenced by traditional economics and the innovation system approach, are that innovations based on new and advanced knowledge are central for industrial and economic development. As is exemplified through the quote below policymakers have no problem with finding inspiration from success cases such as Silicon Valley.The idea that so much could grow in so short time within such small geographical area sent planning bodies from Albuquerque to Zimbabwe scrambling to grow the next Silicon Valley on their own backyard. Sturgeon (2000: p.15)But although the identified "generic" features have been copied, there are few examples of how ambitions to "artificially" create policy supported high-tech based business regions and industries have succeeded. One of the few successful examples of policy created high-tech industries often mentioned is the Taiwanese semiconductor industry. The story of the Taiwanese semiconductor industry is just as impressive as the one of Silicon Valley; in just a few decades an industry was developed from scratch. One of the most common explanations to the transformation addresses the governing role of the state in coordinating industrial development. Some of the major factors mentioned were for example the creation of public research institutes, the public provision of R&D, and the subsequent transfer of technologies to a downstream sector created by Taiwanese policy. This envisioned development scenario has been strongly supported in Taiwanese policy circles and forms a foundation of contemporary Taiwanese industrial development policy. However applied to biotechnology this economic development model has been widely criticized for not fulfilling it promises. This paper challenges the so called "semiconductor development model" by investigating the emergence of the Taiwanese semiconductor industry from a resource interaction perspective. By comparing this picture with Taiwanese policy's interpretation it is argued that the development model is clearly over-simplified omitting several important factors in the development, for instance the importance of users as active participants in the development process.