Taiwan, once one of the world's leading manufacturing economies, is now transforming into a service economy, with an emphasis on knowledge-based services. This metamorphosis has not been easy. As well as major changes in the industrial sector, human resource and policy development have been required, the experiences and implications of which are addressed in this book. Although Taiwan is only in the initial stage of transition from a material- or capital-based economy to a knowledge-based economy, the process has already provided valuable lessons to be learnt. The ramification of transformations in manufacturing, agriculture, finance, services, and the information technology industry are examined and discussed. Tain-Jy Chen and Joseph S. Lee go on to reveal the problems and difficulties that Taiwan has encountered in creating itself a new knowledge based economy, including its outmoded service sector, the inability of businesses to pursue global production and services, and the lack of capacity to create knowledge and to innovate. Providing a discernible insight into the transformation of one of the most prominent newly industrialized countries into a knowledge-based economy, this book will greatly appeal to academics, researchers, and those with a specific interest in knowledge management or Asian economies, as well as to economic analysts.

Taiwanese foreign direct investment rapidly expanded in the mid-1980s when the domestic wage rate and the value of the Taiwanese currency skyrocketed simultaneously. Losing their competitive edge at home, many Taiwanese firms relocated to lower wage countries; mainly Southeast Asia and China. Taiwanese Firms in Southeast Asia provides a comprehensive review of Taiwan's direct investment in Southeast Asia, including Indonesia, Malaysia, Thailand, the Philippines and Vietnam. It also explores the motivation behind investment in Asia, Europe and the US. In most countries, incidence of foreign direct investment is positively correlated with firm size. However, in Taiwanese firms, the opposite is true. The book examines the reasons for this and assesses the difference in practice between small and large firms conducting foreign direct investment, focusing on the manufacturing sector. The book also includes an original, comprehensive survey and a series of interviews with Taiwanese parent firms and their subsidiaries in Southeast Asia. The authors conclude that networking underscores the core competitiveness of Taiwanese firms and when these firms invest abroad, they attempt to maintain a close connection with domestic networks to retain competitiveness and flexibility. However, they will have difficulty in sustaining this in the long-term because co-ordination of production across national borders requires intensive input of managerial resources which are scarce among Taiwanese firms. In the long-term, they have to localize and integrate themselves into the local networks. The book is a result of joint research efforts by Taiwanese, American and Southeast Asian scholars and will be required reading for students and scholars of economies in Southeast Asia, international business, Asian studies and multinational enterprise.

This paper reexamines the concept of the "footloose industry" from the perspective of global production networks (GPNs). Among the players in these GPNs, contract manufacturers are believed to be the most footloose, as they are the most sensitive to labor costs. They constantly move around the world, chasing after low wages, often driven by pressure exerted by dominant firms instead of acting on their own volition. Both the willingness and the ability of contract manufacturers to relocate are shown to depend on the structures of the GPNs, which are deeply embedded in local institutions, especially labor institutions. China's notebook personal computer industry is used to illustrate the fact that unique labor institutions in the coastal areas of China have permanently changed the structures of GPNs in that industry, including power relations and production organizations. These changes have made the relocation of manufacturing activities more difficult, and have also given contract manufacturing more power regarding relocation decisions.