Entrepreneurship and an Apprentice-based Cluster: The Evolution of Houli's Saxophone Cluster in Taiwan

This paper analyses the relationship between entrepreneurship and an industrial cluster in general, by particularly examining one of Taiwan's industrial clusters, Houli's saxophone cluster. Our purpose is threefold. First, instead of investigating high-profile and chiefly government-directed clusters, such as science parks, we focus on a small and medium enterprise (SME) cluster. Second, unlike most studies that usually show how clusters foster entrepreneurship, we emphasize the role of entrepreneurship in the formation of the cluster industry. We discuss how a skilled artisan turns into an entrepreneur and how an apprentice-based cluster is formed. Third, we show that what used to be the competitive advantages of Houli's saxophone cluster -- a peculiar apprentice-based cluster and the supportive precision machine agglomeration in central Taiwan -- turn into its weaknesses when globalization surged in the 1980s. A three-year stint in government support, attempting to revitalize Houli's saxophone cluster by organizing a functional network and improving the technology, was unable to overturn the challenges from globalization. Although entrepreneurs learn to adapt to the changing environment, the current lackluster performance of Houli's saxophone industry demonstrates that regardless of how much glory there was in the past, it is inevitable in a “living” economy that a cluster cannot avoid its own ebb and flow.