[AnnaLee Saxenian also taught me about the Taiwanese information technology industry, and the Taiwanese government's intelligent support for it. This column was published in Business Standard of 21 December 1999.]
A Bangalore in Taiwan
Our information technology industry is a source of
justifiable pride; its success in a country that does not teem with successes
has brought it the attention of politicians, financiers and researchers. We do
not, however, realize that tiny Taiwan has a larger presence in this industry
than India. In 1990, 19,217 Chinese were employed in the high technology
industry of Silicon Valley, as against 7295 Indians. Most of the Chinese were
from Taiwan. While India lost itself in small-scale import substitution, Taiwan
went into the production of semiconductors for the world market, and built up a
competitive PC industry on their basis. Today Taiwan produces more IT hardware
than Korea, or than France and Germany together. The fascinating history of the
connection between Taiwan and Silicon valley has been pursued by AnnaLee
Saxenian.
Just as India has its IITs,
Taiwan also set up first-class engineering universities – National Taiwan University,
National chiao-tung University, and Tsing-Hua University. As with IITs,
virtually entire classes of these universities went over to the United States
for study. Taiwan sent more doctoral students to the US in the 1980s than any
other country. Like IIT graduates, they stayed on in the US and made careers
there.
As I described in the last
article, these Chinese engineers found ready employment in the high-technology
industries of Silicon Valley; but they found it difficult to rise to managerial
positions. The businesses were run by native white Americans, and their old-boy
networks ensured that their own kind were more likely to rise to the top than
foreigners. They also found themselves isolated in the American society.
Although an extrovert and gregarious people, Americans tend to move in small
groups; especially once foreigners leave universities and start working, they
find it difficult to penetrate the local society. So the Chinese began to
congregate on their own – get together at social events, set up self-help
organizations, and help friends and relatives set themselves up in the US. Thus
emerged the Chinese Institute of Engineers, Chinese American Semiconductor
Professionals Association, North American Taiwanese Engineers Association etc.
There are similar organizations of Indians, but they are more often social
rather than professional.
What distinguishes Taiwan from
India is the early official interest in these US-based associations. Thus as
early as in 1966, Y S Sun, Taiwan’s Minister of communications, organized
biannual seminars lasting two weeks between the Chinese Institute of Engineers
of New York and Taiwanese industry. Taiwanese industry selected areas in which
it would like technological assistance, while the CIE found Chinese scientists
and technologists in America who could talk knowledgeable about those topics.
Ministers as well as senior officials of Taiwan regularly attended the
seminars.
These seminars led to contacts
and relationships which were crucial to the emergence of Taiwan as a leader in
IC technology. Y S Sun, who was by then Minister of Economic Affairs, asked Pan
Wen-Yuan, an Engineer working in RCA, to advise the Taiwanese government on
developing the electronics industry. His recommendations led to the setting up
of the Industrial Technology Research Institute – in the Ministry of Economic
Affairs, not in some remote Ministry of Science and Technology. ITRI set up a
subsidiary, electronics Research Service Organization. Both had private sector
participation, and earned a significant share of their income from sale of
services.
To guide ITRI and ERSO, Pan set
up a Technical Advisory Committee made up of Taiwanese scientists and
technologists in the US. They met every week, and went to Taiwan every quarter.
Thus the Taiwanese organizations had access to up-to-date expertise from the
US.
Y S Sun tried out the same model
when he became Prime Minister in 1979. He set up a small group of policy
advisers called the Science and Technology Advisory Group. All its 15 members
were from the US; and not all were Chinese. STAG held an annual conference in
Taiwan and helped evolve policies. It pushed for state-of-the-art technology,
for private participation at all stages, for better technological education in
Taiwan, and for close collaboration between universities and government
laboratories. Under its leadership, Taiwanese government agencies maintained
offices in silicon Valley, set up databases of US-based engineers, and made
them freely available. Whenever major projects were contemplated in Taiwan, the
US-based engineers were consulted.
If Y S Sun made the Taiwanese
scientific establishment externally oriented, K T Li, the finance minister,
built up the Taiwanese venture capital industry. He created tax incentives for
it in 1983. He persuaded important US-based Taiwanese engineers to set up
venture capital funds. From those small beginnings in the 1980s, the number of
venture capital firms in Taiwan has grown to 110; they have invested over $1
billion in over 1800 companies.
Thanks to the technological
bridge between Taiwan and the US that the Taiwanese politicians created, many
Taiwanese engineers began to return to Taiwan in the 1980s. The numbers
returning rose from 200 a year in the early 1980s to over 1000 a year a decade
later. In the 1970s, 10 per cent of those who went abroad returned; today it is
30 per cent.
Indian politicians also
frequently visit Indians abroad; they also try NRIs to do various things for
India. What distinguishes Taiwanese politicians is the fact that they do not
lecture the NRIs, but listen to them. They not only listen to them, but on
their advice, have created an open, competitive IT hardware and software
industry in Taiwan, as well as a venture capital industry to finance it and
other state-of-the-art. What impresses is the technological sophistication and
the receptivity of Taiwanese politicians. Not for them debates about whether
Taiwanese of foreign origin should be deprived of the right to stand for
election; not for them the urge to ensure that everything is invented in
Taiwan, not for them special funds for the development of Zen technology. With
the help of non-resident Chinese, they have created an environment in Taiwan in
which US-based Taiwanese feel at home, and create technology comparable to the
best in the world.
