None of these traditional approaches alone can fully interpret the current GI relationship in Taiwan. Statist and corporatist theories both provide insights to interpret partly the GI relationships in Taiwan. They do not pay special attention to the examination of GI relationships in the process of technology diffusion. They also neglect, how a country, by institutional arrangements, actively responds to the competitive requirements of the global economy. Thus, a new theoretical pattern of GI relationship should be developed to explain the current GI cooperation that has happened in Taiwan’s electronics sector and other high- tech sectors.
The empirical findings in chapter 4-6 arrived at a suggestion that Taiwan’s state- industrial arrangements can be characterised as an institutionalised strategic partnership (ISP). ISP, defined as an institutional arrangement of mixing the state-designed policy and GI cooperative policy implementation, has proved to be an effective method of promoting competitiveness. It differs from neo-statist theory, in which the state authoritatively distributes resources to the industrial sector by imposing performance criteria on them; from corporatist theory in which the outputs of policy formation and policy implementation are through corporatist exchange with the state. Neither the statist autonomous concept nor the corporatist societal partnership give a fair account in relation to technological and international factors that have influenced the changes of political
economy and GI relationships substantially. In fact, under the ISP. the state assigned resources to a particular sector in the hope of stimulating more private investment and the accommodative efforts of firms: the policy-making process was hardly penetrated by the industrial sector and unions, rather by foreign advisors and international consultancies: business associations played the role of administrative assistance to project implementation instead of pressing for more benefits. The private sector is given a new meaning in the notion of ISP, unlike that defined in the developmentalist explanation which was seen to be a docile and unresisting subordinate. It is now performing as a partner with the state to act hand-in-hand on the efforts of innovation and diffusion.
It seems that the government, in this wave of technology-led structure adjustment, can accelerate and assist industrial development, especially in the situation of Taiwan where public research institutes are the major dynamic for innovation. Even though the government plays a dominant role in the technology development process, the fact that private firms share the efforts of technology development as well as risks, is also important. The industry is the end user of technology, a fact that the state can not substitute. IPs are very essential for the success of industrial development, an institutional mechanism that can effectively enforce IPs is of paramount importance, however.
ISP, seen as a form of effective GI relationship in accelerating the pace of technology diffusion by linking the public research institute and the industry, has a decisive influence on the creation of both new products and the new sector. This, in the long run, contributes to the increasingly competitive advantages of some industries. Through ISP, the flexibility of smaller firms on the production of components, the strength of large firms on product designs (in particular, HDTV complex), and the R&D capacity of ITRI are brought together. Three different stages in the process of technology development, namely, technology innovation, technology diffusion and the commercialisation of technology, are integrated into one stage by this new institutional arrangement. Thus, it has shortened the time for technology development and the time for the product to reach the market. This has led to an increase in profit and competitiveness.
An ISP identifies the essence of state-industrial arrangements in technology diffusion in the 1990s in Taiwan. It embraces three elements, as shown by the individual meanings of the words: 'institutionalised' stands for IP-driven institutionalisation; ‘strategic' for selective intervention; and ’partnership' for reciprocity' between the state and industry;
IP is the basic element underlying the whole picture of ISP. Two different kinds of IP constitute the institution for the effective operation of GI cooperation in relation to technology innovation and product creation. A technological IP, Special Technology Project, is the main determinant to bring about the consequence of linking the public research institute and private firms while other supporting IPs contribute to strengthen the R&D in the private sector. The evolution of the Special Technology Project and its relation to the NPC and HDTV cases will be discussed in chapters five and six (in particular, in the section 3.2. of chapter six). The general IPs supporting technology development will be explained in full in the second section of the next chapter.
The word ‘strategic" denotes selective intervention of the state in technology development. State intervention concentrates on the emerging industries which are perceived and planned as the future industries for Taiwan by the government. Selective characteristics of state intervention will be disclosed in the first part o f chapter four which shows a economic-biased national innovation system, and in the section 3.1.1. of chapter six which relates to the choice of HDTV as a winner. The rapid rise o f high tech sectors is the result of functional and selective intervention.
The state-industrial partnership represents a reciprocal and cooperative relation in which the willingness of the state to invest in key technology and the accommodation of the industrial sector to technology development are the bases on which to consolidate ISP. Even though policy making is hardly penetrated by the industrial sector, this partnership is built upon the fact that the firms can get more benefits by joining government projects than by keeping outside the institutional arrangement. There is no coercion in this partnership, but institutional ‘sweeteners’.
The conception of ISP and its three elementary characteristics will be comprehensively elaborated with supporting empirical evidence in the final chapter. It is argued that, first, ISP is the main factor leading to effective GI interaction and conducive policy implementation; second, ISP will become a viable model for the development of high-tech industries and a very common scenario for the foreseeable future.