Innovation and Learning in the Integrated Circuits Industry in Taiwan and China
Journal of the Asia Pacific Economy, 15(3): 226-247, 2010
Posted: 10 Aug 2010 Last revised: 6 Sep 2014
Date Written: August 9, 2010
Using the evolutionary framework of inductive screening, this paper seeks to examine the drivers of technological catch in the integrated circuits industry in Taiwan and China. The paper shows that IC manufacturing began with multinationals relocating export-oriented assembly operations in the 1960s in Taiwan and 1980s in China but serious technological catch up took place when with the assistance of government local firms began to participate in wafer fabrication and designing activities. While foreign ownership and export markets were critical in initiating connections in the global IC value chain, the paper argues that the role of government through funding, R&D labs and development of human capital were critical in local firms’ technological catch up process in both countries.
Keywords: Innovation, learning, integrated circuits, Taiwan, China
JEL Classification: L63, O13, O14, O33, O38
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