Abstract: In this talk I will discuss the process of adjustment and relocation in two industrial sectors in Taiwan: the textile/apparel and automotive sectors. Both are representative of industrial sectors that are targets of developmental efforts during early stages of growth, rise to become pillars of the local economy, and then finally encounter problems as growth begins to slow. The intent is to analyze the form of relocation in these two sectors, and to assess the prospects for success. Because there is little aggregate data on the relocation efforts of Taiwanese firms in the textile/apparel and automotive sectors, the research consisted primarily of firm interviews in Taiwan, the PRC, and Mexico.
I argue that the pressures that drive the relocation of Taiwanese firms are the same as in advanced capitalist nations, but the strengths and weaknesses of the Taiwanese firms are not the same, and both relocation strategies and adjustment policies must recognize this. In particular, the innovative capacity and degree of technological independence are critical because they are key determinants of Taiwanese firms' comparative advantage over the low-cost competitors in the regions that they are moving to and, perhaps more importantly, they will determine Taiwan industry's capacity for transforming what is left at home to higher order functions.
This event is sponsored by the Science, Technology and Globalization Project, Center for International Development and Asia Programs at the Center for Business and Government.
