National and Industrial Strategies for Value Creation in a Global Context

The development and growth of Taiwan's industries, especially the semiconductor and electronics industries, has been emphasizing overwhelmingly on cost-leadership innovation and strategy. Although such capital-intensive, volume-driven and cost-down strategies have been successfully measured by industrial and economic growth, the amounts of value created and captured in global value chain and innovation networks are insignificant. We apply the framework of creation and capture of value to analyze the industrial value creation strategy in newly industrialized countries for the last four decades. We examine their past industrial policy and business strategy, and argue that the transformation of policy and strategy must gear toward creating and capturing higher value in the global innovation network. Several managerial and policy implications are also discussed.