Human Capital Flows in Taiwan’s Technological Catch Up in Integrated Circuit Manufacturing

Abstract

This paper examines how knowledge gained by the diaspora abroad played a strategic role in driving technological catch up in the integrated circuit industry in Taiwan. The evidence shows that efforts led by the government created conditions for the return and circulation of strategic human capital and the evolution of the absorptive capacity necessary to drive technological catch up. The integrated circuit industry was successful in getting human capital endowed with tacit and experiential knowledge to return and to circulate with considerable rooting in Hsinchu Science Industrial Park, which helped propel the integrated circuit industry in Taiwan to the technological frontier.