Last century, most countries experienced steady growth with some approaching almost exponential levels. Countries like the UK, USA, Japan and several in Europe, were already fairly industrialized by the end of the nineteenth century when the tech boom could be said to have really begun.
Taiwan had a little catching up to do which it did in the latter half of the twentieth century – an event referred to the TAIWAN ECONOMIC MIRACLE. It is now firmly part of the FOUR ASIAN TIGERS family which includes Hong Kong, Singapore and South Korea.
Nick, the owner of an IT Solutions firm (Elive) says “the brands that stand out as truly synonymous with Taiwan are HTC, Acer and Asus. The fact that they are home-grown makes it more interesting. Today’s global economy facilitates corporate investment and welcomes elite talent from other countries with sweeteners like tax breaks and a plethora of benefits for businesses.”
Taiwan did not have access to this when it created the foundation for the journey of progress it embarked upon nearly 70 years ago.
FROM BCE TO REVOLUTION
The first flutters of the fledgling nation that would one day become Taiwan dates back to 2070 BCE with China’s first dynasty. Modern Taiwan can be said to have taken its first steps with the Xinhai (or Chinese/1911) Revolution. This was the momentous event that overthrew the last imperial Qing dynasty and begat the Republic of China (ROC).
The island nation that we recognise today was founded by the KUOMINTANG (KMT) Chinese political party that ruled China from 1927-48 and then moved to Taiwan. In 1949, the party was defeated in the civil war with the Communist Party of China and took control of Taiwan where it remains to this day.
Seeing the writing on the wall after the loss of the power struggle with the Communist Party, the KMT leadership, remaining army, hundreds of thousands of business men and remaining supporters (some two million in total) fled to Taiwan.
What makes this a significant point of difference was the sheer amount of wealth that the exodus of peoples brought with them. The KMT instituted the constitution in 1947 and, although repressive in many ways, it did have some progressive policies.
The portable wealth that the KMT had access to at the launch of the Taiwan nation was instrumental in the young country’s ability to develop a robust agrarian economy in the first few years. Solid municipal infrastructures and businesses were installed and entrenched without debt.
THE LAND OF THE RISING SUN’S INFLUENCE
Between 1895-1945, Taiwan was either under Japanese rule or influence. The Japanese were a technologically and industrially advanced people. They left traces of their progressive developments in generous measures which fuelled further innovation in the Taiwanese.
The cream of the business and creative elite continued to flood in from China too.
Picture of Taiwan sector growth courtesy www.moeaidb.gov.tw
THE TRIUMVIRATE OF TAIWANESE FUNDAMENTALS
EDUCATION: The KMT was very progressive from the nation’s conception with education. It established a widespread public education system and encouraged higher study. Even to this day some promising students are PAID to attend university. Specialities are encouraged.
Amongst the stress on stated important subjects, like maths and science, were relatively newer ones – computer science and information technology.
Taiwan was one of the first countries in the world to have universal healthcare. This, coupled with emphasis on education, ensured that the following generations were healthy and content. This is a solid structure on which to hang the next goal the Taiwanese reached for: economic growth.
FOREIGN DIRECT INVESTMENT (FDI)
A flourishing farm sector, sound economy, prolific education and benevolent healthcare system set the scene for liberalisation and industrial sector boom. Up to then, Taiwan had been fairly conservative in order to nurture its domestic businesses.
From 1987 onwards, Taiwan experienced rapid growth. Trade barriers were lifted and the government allowed Taiwanese firms to invest in mainland China. The Department of Economics and National Taiwan University conducted studies in 2006 which stated “FDI is found to have a positive influence on the domestic investment of larger firms”. (1)
ANOTHER THREE SWEET BENEFITS FOR BUSINESS
Firstly, whenever Taiwan has fallen into financial stress the government has been proactive. This has been the political stance since the administration overhaul undertaken by Chen Shui-bian in 1988 after his party win.
The implementation of his “Taiwanisation” policy was to dismantle some outdated infrastructures and relax other restrictions. With the technocracy centered economic plans of the previous government gone, Taiwan’s GDP has averaged around 8% in the last three decades.
Secondly, geographically Taiwan is perfectly situated. This has led to traditional labor-intensive industries slowly being moved off shore and capital and technological industries replacing them.
And thirdly, even though there have been the odd case of corruption or political change in the last thirty years, the administrative side of Taiwan remains unrivalled. The trains all run on time to put it in few words.
Infographic used here with acknowledgement and gratitude: Cato Institute
THIS ALL SPELLS SUCCESS FOR THE TECH BRANDS OF TAIWAN
The economy of Taiwan places 7th largest in Asia. It is gauged as a high-income economy by the International Monetary Fund and ranks 15th globally in the Global Competitiveness Report.
This is why Taiwanese brands like HTC, Acer and Asus have become linked to quality, innovation and success.
- LIN and CHUANG. FDI AND DOMESTIC INVESTMENT IN TAIWAN: AN ENDOGENOUS SWITCHING MODEL. 2006