Leading, Following or Cooked Goose? Innovation Successes and Failures in Taiwan's Electronics Industry

Abstract

The reasons behind the innovation successes and failures in the Taiwanese electronics industry have been widely discussed. This paper makes its contribution to the debate by comparing the innovation outcomes for three products: complimentary metal oxide silicon (CMOS) logic, dynamic random access memory (DRAM) and active matrix liquid crystal displays (AMLCDs). Four success factors are identified to characterize products where the Taiwanese pursue innovation: granularity of production; absence of need for large amounts of patient capital; volume production; and manufacturing-based production. In turn, this paper argues that products exhibiting these characteristics succeed because such characteristics draw upon the institutional and historical strengths of the Taiwanese economy. The paper broadens the inquiry to assess what lessons the Taiwanese innovation successes have for developing countries. It is argued that the new lesson Taiwan has to offer is that countries can become innovators by concentrating their human and financial capital through granularization of production.increasingly relevant. It is argued here that social networks sustain interpersonal routines, which not only transgress organizational boundaries but on occasion also incubate new organizations in order to ensure their continued existence. This paper presents an overview of the routine concept and an argument for applying it in a network embeddedness context. Two case studies are presented, covering examples from the Danish dairy and the Danish machinery industry.