Innovative strategies of Taiwanese firms in response to the regional economic development

Abstract

This paper aims at studying strategic imperatives of Taiwanese firms amid the trend of regional economic development in China enabled by the era of globalization. In particular, high-tech firms operating at different levels of technology will face different pressure to change, as technology posts the central spot in highly intensive competition. An analytical model of industrial innovation resource is used in this research to evaluate high-tech firms at different levels of technology including cognitive, coordinative, and cooperative technology, for proposing the firm-level innovative strategies. Globalization and proliferation of product knowledge in knowledge-based economy demands a new approach for industrial specialization under the regional economic development, where integration of systems knowledge is pivotal in controlling information trafficking and management. With this perspective, an unprecedented new policy is likely to be exercised based on firm-driven in lieu of traditional government-driven growth. Secondly, consumption-based economic development will take a greater priority over investment-oriented growth due to the role change of government in China from a planner to a facilitator in this market-driven economy. Under this interpretation, we constructed an analytical model of industrial innovation resource to depict the inter-linkages between three levels of technology and eight industrial innovation resources, thereby evaluating the influences of regional economy for different high-tech firms. The results of this research show that cognitive technology in a mature market will experience the greatest challenge, whereas Taiwanese firms intends to use emergent technology to gain product leadership requires to work close with their counterparts in China to gain speed and cost advantages. This result is of great academic and practical importance. Not only does it provide an analytical anatomy of innovative strategies in different life cycle stages, it also makes firm-level suggestions for competing in regional economy.