Industrial development and structural adaptation in Taiwan: some issues of learned entrepreneurship

The industrialization of Taiwan has been a remarkable phenomenon. This paper discusses changes in Taiwan's manufacturing industries and the response of both government and private enterprises to the challenges presented by a dynamic environment and by global competition. Several cases are discussed in light of the activities and adjustments on the part of government and of the public sector, of small and medium business, and of high-tech industries. Government participation over has been and will remain pivotal in economic growth and in achieving adjusted positioning. The accelerated sociopolitical movements toward democracy, the bureaucratic management of public issues, and the political and economic interactions between Taiwan and China, exert significant effects on the industrial structure and on government's role in directing the industrial evolution. This article presents an integrated reasoning of Taiwan's economic success. It reveals that the neoclassical doctrine of market efficiency is fundamentally valid, and that the effective commercialization of national technological capability has created Taiwan's industrial evolution. Market governance proved to be an efficient short-term policy instrument when the latecomer strategy of cost leadership was applied. A conceptual model of industrial competition and technology commercialization is also proposed to facilitate the methodological analysis. This study concludes that learning capability and human capital will determine the endurance of Taiwan's industrial success, and that entrepreneurship must be learned by the state, as well as by the private firms.