Welcome mat comes out in Taiwan for post-industrial computer age
Hsinchu, Taiwan — Red-and-white banners flew over Taipei last December, telling the Chinese on Taiwan to "meet the coming of the Information Era." For a full week, the government tried to convince this still largely rural island of 17 million people that computers and high technology are needed as the next step for this developing nation.
With its rice paddies and factories already running with the precision of Swiss timepieces, the Republic of China (ROC) wants to graduate into the age of computers.
"We realize that economic growth will not be sustained without a rapid move to computers," says the Industry Information Institute's Chester Lee in Taipei.
The week-long promotion included a well-attended computer equipment show in Taipei, special television dramas depicting the wisdom of microprocessors, and many seminars around the country.
But the seeds for Taiwan's transformation into a computer-based society were being planted last fall on a sloping, isolated hillside about 40 miles from Taipei.
Here in Hsinchu, the government set aside a 750-acre plot of land, called it a "Science-based Industrial Park," and announced a package of incentives that would attract the best and brightest of both foreign and Taiwanese high-technology companies. The park is modeled after the "export processing zone' set up 15 years ago in Kaohsiung, which attracted foreign manufacturing into Taiwan and bred an industrial base.
Since September, the new park has had 18 companies set down roots -- including Wang Laboratories of Massachusetts -- with 15 to 20 more expected each year until 1983.
At present, Taiwan's total capital value of computers measures only 0.49 percent of its gross national product. That compares to 2.4 percent in the UA or 1.87 percent in Japan.
A government-sponsored study by SRI International, a large US consulting firm , found a "startling contrast" between Taiwan's sophisticated train system and its "primitive" information processing.
Nonethless, the country leads South Korea and the Philippines, and computers have found their way into about half the banks, universities, and even the cattle auction market. A Chinese Computing Society has started up. Last year, about 1,000 computers were installed, or a 76 percent growth over 1979.
IBM ranks Southeast Asia as the fastest-growing region "in all of IBM," with revenues doubling every three years. The company's Korean operation, for instance, has experienced a 52 percent compound growth rate in the last five years -- or double the rate for the whole US information processing industry. IBM's Taiwan sales have been growing at 30 percent a year, with Singapore and Hong Kong close behind.
With a basic electronic-parts industry uner its belt, Taiwan's move into computers would appear to be easy. But it hopes rest on three developments: training of more engineers, a healthy world economy, and a compromise in the industry on how to use the Chinese language in computers (see box).
US executives report difficulty in getting Taiwanese to deal with precision measurements. "I guess somebody who's been walking behind a water oxen for years can't be expected to deal with thousandths of an inch," says Ken Selzer, Far East operations manager for CTS Corporation.
Three large Taiwan electronic companies --emerge as the IBMs of their country. But so far about half of the growing computer market has been taken by IBM. Control Data Corporation, Inter-data, Nippon Electric, and about 40 other vendors pick up the rest. In software, ROC "has the potential to make extraordinary strides . . . because of low wages and high training," SRI found.
The government has helped boost the share of the bachelor-of-science graduates to 25 percent more than the proportion in the US. Taiwan feels competition with Singapore in foreign technology transfer, but officials point out that "Singapore cannot produce as many engineers."
The Science Park, which officials hope will do for Taiwan what Stanford Industrial Park did for California, excludes companies that do not have one engineer for every five employees, and do not have a training program leading to more than half the engineers being Taiwanese within five years.
The 18 companies, which so far have invested $60 million to move into the government-built complex, deal in such fields as high-pressure water cutting, optics, telecommunications, and integrated circuit research .