As the election crescendo approaches, things are flying into my mailbox thick and fast: first, three more from the Hsieh Campaign:


Taiwan’s Creative Shift

For the KMT, the development of industry was all about information hardware at the expense of support for technological creativity. Factory owners were provided support when buying machinery, but in terms of software development and R&D for, say, integrated circuits (IC), there was little or no support. It is a situation that reveals a fundamental misunderstanding about the importance of knowledge-based R&D in order to establish high-tech industry, and the traditional industries supported by the KMT were precisely those that needed to be supplanted in order for Taiwan to take a leading role on the global stage.

The KMT have no pragmatic strategies for promoting high-tech industry, and while in power pursued a low-wage strategy that resulted in ever-lower added value. In 2000, for example, IT consumer electronics products achieved a value added of 18.2 per cent, lower than the garment industry’s 27 percent and the electronic components industry’s 29.9 percent. Furthermore, in the years leading up to 2000, the KMT presided over an exodus of Taiwanese industry to China, and it occurred at such a fast pace that it came to look like the only choice for Taiwan’s future development. For 10 years this did immeasurable damage to Taiwan’s aspirations to become an Asia-Pacific Operations Centre, and when the DPP came to power in 2000 it had to deal with the consequences.

Nevertheless, since that election, and in particular over the past two or three years, branding and creativity have become media buzzwords. When former Trend Micro CEO Steve Chang and KMT vice-presidential hopeful Vincent Siew discussed Taiwanese international brand names on a popular TV show last year, Siew had much to say on the subject. But Chang’s response revealed the true nature of the KMT’s previous policies. With a polite smile, Chang pointed out that the reason Trend Micro listed in Tokyo and subsequently become an international brand was because the KMT government had made it so difficult for him to list the company in Taiwan.

Chang’s point was that the KMT government of the 1990s only encouraged hardware manufacturers, and was not supportive of creativity and software development. The obstacles extended not only to software companies looking to list, but even made it difficult for software companies to rent space in science parks.

This amounts to a lost opportunity for Taiwan to show its creative flair. When foreign developers came to Taiwan looking to jointly develop the 2G CDMA mobile standard, the KMT government of the time sent them packing and the opportunity went to South Korea. It is only today, under the guidance of the Institute for Information Technology that Taiwan’s industrial R&D and design strengths have finally caught up with global standards.

In short, the KMTs policies and thinking run in the opposite direction to that of the
DPP. The DPP has long advocated a “knowledge economy” that encourages creativity, branding and R&D, and it is that encouragement that has transformed Taiwan into the increasingly dynamic place it is today.