Inter-Firm Networks and Industrial Development in the Global Manufacturing System: Lessons from Taiwan

Abstract

The link between inter-firm networks and industrial development in Taiwan has rarely been conspicuously identified in the extant literature. This paper highlights the existence of such a link, first in the labour-intensive phase of industrialisation from early 1960s to late 1970s, and then in the current phase of technology-intensive industrial development in Taiwan. However, established forms of inter-firm networks within and across the Taiwanese border have structural limitations to generate innovation from within the networks. This impedes further development of Taiwan's industries, in particular those which are more technology-intensive. Using the information technology industry as a case study, this paper examines the role of the state and the private businesses in fostering the formation of newer forms of inter-firm networks which contribute to Taiwan's further industrial development.

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