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Technology and Culture 42.4 (2001) 836-838



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Book Review

Tiger Technology: The Creation of a Semiconductor Industry in East Asia


Tiger Technology: The Creation of a Semiconductor Industry in East Asia. By John A. Mathews and Dong-Sung Cho. Cambridge: Cambridge University Press, 1999. Pp. xxiii+389. $54.95.

Not so long ago, most East Asian countries were economic backwaters, no better off than the other struggling nations of the Third World. Today, Korea, Taiwan, Singapore, and (to a lesser extent) Malaysia have achieved an economic status that puts them squarely among the middle-class nations of the world while experiencing rates of growth that, if continued, will propel them even higher. So rapid and extensive has been their ascent that it is frequently described as nothing short of miraculous. In Tiger Technology, John A. Mathews and Dong-Sung Cho examine a particularly significant component of the industrial advance of these hitherto poor countries, the manufacture of sophisticated semiconductor components for sale on the world market, a process they dub "developmental resource leveraging" or simply "technology leveraging." As the recent histories of these countries have shown, the acquisition, absorption, diffusion, and improvement of these technologies has been a new and distinctive pathway to economic development. Successful semiconductor industries do not depend on a country's natural resource endowment or geographic location. What matters is access to sophisticated technologies, coupled with the nurturing of the knowledge and skills necessary for their efficient production.

In addressing these issues, Tiger Technology pays particular attention to South Korea, Taiwan, Singapore, and Malaysia, with occasional comparative glances at China, Japan, Hong Kong, and Indonesia. The middle portion of the book, which presents case histories of technology acquisition by Korea, Taiwan, and Singapore and Malaysia in separate chapters, makes it clear that there is no single "East Asian" model of technology leveraging. Korea has pursued world leadership in the production of commodity memory chips through the agency of large industrial conglomerates (chaebol). In contrast, Taiwan has relied on a multiplicity of small and medium-sized [End Page 836] firms to produce a variety of semiconductor products. A third approach has been taken by Singapore and Malaysia, which have looked to partnerships with multinational corporations as the chief means of developing their semiconductor manufacturing capabilities.

Whatever the product or the specific mode of organization, these countries have been anything but passive recipients of transferred technologies. In all cases, government agencies have been close to the action, engaging in "market enhancing" activities to encourage and guide technological advance. Successful technology adoption and adaptation has been spurred by a variety of government policies and programs: preferential allocations of credit, the sponsorship of research parks, hard-nosed negotiations over licensing terms, the recruitment of overseas nationals, the coordination of technology acquisition by individual firms, purchases by public-sector firms to enlarge the market for homegrown products, and (perhaps most important) the construction of a solid educational foundation.

Although leveraging strategies have been effective for the development of semiconductor industries, they have been far less successful in stimulating the growth of other kinds of enterprises. Semiconductor industries have been especially amenable to leveraging strategies because they have followed reasonably predictable trajectories, allowing East Asian firms to catch incoming waves of technical advance and making it possible for them to concentrate their efforts on the manufacture of products with assured markets. Technology leveraging also has been successful because established American, European, and Japanese firms have been willing to engage in cooperative ventures that run the gamut from the granting of rights to use patented technologies to direct ownership. More generally, East Asian firms have benefited greatly from a liberalized world economy that has provided a vast export market for their products, a point never made by the authors. They are also silent on the topic of profit; success is defined in terms of expanding market share rather than the bottom line. For the authors, the continued growth of these industries in the wake of the 1997-98 Asian financial crisis is indication enough of their fundamental strength. This...

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