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Development trajectories of India and Taiwan in the electronics segment

Note: This essay was written as part of course-work. Some of these observations may be incomplete.

Introduction

India is about 91 times the size of Taiwan and 44 times the population. Nevertheless, both countries have had comparable population densities and aggregate GDP. India ranks 11th in the population density across the world while Taiwan ranks 4th and aggregate GDP ranks for these two nations are 15th and 19th respectively even as GDP per capita for Taiwan is significantly higher real GDP per capita in 10 Asian countries 1820-1992. Both these countries started as predominantly agricultural economies consisting of farmers and toilers. Taiwan has one of the most mountainous island in the world plagued by earthquakes, droughts, heat and rain washing away the fertile soils while India even today relies heavily on agriculture accounting for 18% of its total GDP in 2014. Rapid industrialization and militarization caused Taiwan and the rest of the East Asian Tigers to form crude representations of the developmental state as viewed by Alice Amsden (Amsden, 1989). Taiwan thereafter became driven largely by labor-intensive, export-oriented industrial manufacturing in three major sectors, electronics, machinery and petrochemicals using the nature of its low skilled labour force. India on the other hand capitalized on a large English-speaking skilled population and today employs less than one third of the labour force to produce nearly two-thirds of the national output in service-based sectors thanks to digitization. The aggregate electronics production in India has grown from $231 million in 1971 to $5004 million in 1993. Several factors contributed to this growth including telecommunication advancement and reforms, the advent of colour television and on the other hand, breaking up of former Soviet Union that caused declines in electronics exports along with a strong public sector preservation until 1990s in all science and technology efforts. Taiwan followed Japan’s trail in inserting themselves into mainstream chip fabrication of DRAM (memory) chips without conventional reliance on high technology R&D expenditure but with linkages through contract based manufacturing, join ventures and inter-firm collaborations. These are two countries that decided to take divergent paths of evolution as far as the electronics and particularly semiconductor industry is concerned. While one was successful in positioning itself in the global value chain, the other could only extract lessons from its approach and later use the learnings into its flourishing software segment. The success of Taiwan in electronic manufacturing and the struggles India faced in any hardware design segment (with the exception of embedded systems where things were a relatively better), can be attributed not just the to the ‘catch-up’ in technology both these countries played, but also to their corresponding labour skill, the state’s science and technology policies, movement of people in and out of the respective nations, economic reforms to deal with private investment, the co-evolution of MNC engagement and organizational structure within each domestic industry, military advancements, physical infrastructure capabilities, industrial process innovation and several other secondary factors.

Technology transitions

An established fact is that at a non-zero fixed cost of production, technological efficiency results in a higher overall production cost and going simply by only the law of diminishing returns, production profits would likely be steady state after an explosive growth and may start diminishing later if at least one of these dimensions does not re-invent itself if not all (Abadir & Ambler, 1994). Today China’s most successful foundry ASMC is modelled on Taiwan Semiconductor Manufacturing Corporation (TSMC). India on the other hand in its post-independent economy, struggled to explore an avenue to re-invent itself in hardware design and the struggle for India to make a mark has allowed a huge gap in fulfilling aims like the basic UNDP goals, forcing its priority of positioning itself in the global electronics conversation to take a back seat.

An integrated circuit design for example, goes through the heavily intertwined process of ideation, engineering, manufacturing, roll outs and testing. A complete innovation in this domain is a rarity and most designs build up on existing designs to enhance productivity of workforce. Even then, the typical design life-cycle of an integrated circuit can last as long as 2 years end to end (architecture to pre-production along with post-silicon testing) which is quite long. The division of labour in this sector involves two aspects vertically – one is the connection in downstream, midstream and upstream sectors and the other pertains to functional linkages between original design manufacturers (ODM), original equipment manufacturers (OEM) along with marketing and branding teams. Both these countries have followed different areas of this design and production cycle, leading to different development outcomes as described below.

Learning from the western world

India and Taiwan have both tried to emulate Silicon Valley and evolved to identify their own expertise – off-shore design being India’s weapon and manufacturing being Taiwan’s. The establishment of the ITRI/ESRO in Taiwan in the late 80s caused rapid exchange of technical know-how with the private sector and it took under a decade for the East Asian Tigers as opposed to a few decades for other nations to imbibe, adapt and even improve Japanese and American manufacturing capabilities by upgradation of its own production infrastructure and process. The establishment of the Hsinchu Science-based Industrial Park in Taiwan in the 1980s was an emulation of the Stanford Research Park, offering perks and better living conditions to the engineers and technicians as opposed to the conditions in Taipei. This was a government owned establishment and offered easier loans, lower land rents and tax benefits. India did not at that time follow this model. Most electronics design and production establishments were public sector enterprises or directly under the control of a ministry. The first effort to create such parks happened only during the software evolution cycle and the first Special Economic Zones only came in much later. Creation of such hubs for technical growth proved crucial in case of Taiwan for the flow of ideas to take place. The slow pace of bringing such hubs could be one of the reasons Indian hardware industry got left behind in the hardware sector.

“If industrialization first occurred in England on the basis of invention, and if it occurred in Germany and the United States on the basis of innovation, then it occurs now among “backward” countries on the basis of learning. The paradigm of late industrialization through learning generalizes to a diverse assortment of countries . . . but in all cases industrialization has come about as a process of learning rather than of generation of inventions or innovations. Learning, moreover, has been based on a similar set of institutions.” (Amsden, 1989)

Moore’s Law has been long known to govern not just semiconductor design development but also for the attention it brought to relevant stakeholders and their structure (Callon, Law, & Rip, 1986). Taiwan resorted itself to fine-tuning their semiconductor manufacturing process (which is undoubtedly a very toxic and resource intensive process in the first place) alongside packaging processes. It took four decades for Taiwan to move from assembled products such as transistor radios and tape recorders to component manufacturing business and eventually evolve to 20 wafer fabrication plants operating in the IC manufacturing domain by the year 2000. However, this move is still quite consistent with the global developments in electronic technologies Vis-a-Vis the invention of diodes, transistors and CMOS circuits. United Microelectronics Corporation was the first spin-off from Industrial Technology Research Institute (ITRI/ESRO) and most of its capital came from government and local banks. The Electronics Research Service Organization made a technology transfer agreement with RCA to enable a royalty free obsolete 7 micron process share. From less than 1% of the global integrated circuit production in 1988, UMC, a spinoff of ESRO, brought this number to 3.3% as a pure-play foundry. Today the most advanced TSMC technology node is at 7 & 4 nanometers. On the contrary, India’s technology transfer agreements were plagued by restrictive trade policies on royalty payments and these agreements were very few new number and were of bare-minimum sharing model. Hence, it appears as though the industrial revolutions in electronics skipped India altogether for a long time. Many have cautioned against India becoming design innovators in their own right. Since 1991, while at a global scale, economists have aimed themselves at reducing the overheads and costs (fixed and variable) of electronic circuit design and maximizing its benefits, the Indian engineers until today work on technological efficiency and optimization of hardware or software for goals like better power, better area and speed. Today the $65 billion dollar electronic hardware industry of India forms a minute part of the global $2 trillion business. (NITI Aayog, 2016). Within this, the semiconductor design market constitutes $14.5 billion (International Brand Equity Foundation) i.e., around 22%.

Patent holdings

The number of patents can be one of the measures of national competitiveness. These patents can be filed within their nations or with the US patent office and they can either be design patents, methodology patents or process patents. In the patent holdings department, India has kept focus on building R&D capabilities while Taiwan has brought about a greater value capture with its process patents. The overall patenting and intellectual property right protection has been handled better by India than by Taiwan in the judicial departments. However, globally, Taiwan has constantly worked itself toward protection of intellectual property as reflected by the growth rates of 43%, 24% and 27% in the three periods spanning 1991 to 2006. On the other hand, the World Intellectual Property Organization’s (WIPO) Global Innovation Index (GII) has ranked India as the 57th most innovative nation in the world in 2018, moving up steadily from rank 81 in 2015 even though the actual number of global patent filings by Indian firms and research organizations are 1,320 in 2013, 1,428 in 2014, and 1,423 in 2015. To put things into context, in 2014 Japan filed 42,381 patents, China filed 25,548 patents and South Korea filed 13,117 patents in 2014 as per the WIPO. In India, the Semiconductor Act, 2000 legally protects original intellectual property which essentially form a layout design from piracy that was uncovered under copyright laws. This very type of protection was introduced in the US around 1984 followed by the European Union in 1989. Hence, statistics suggest that even though it has been long known that there will be a need of such sui generis protection, both Taiwan and India have been somewhat lagging behind compared to American and European nations. The caveat with India was that on the design side, 1970 India Patent Act’s less protection to foreign patent holders along with Monopolistic and Restrictive Trade Practices (MRTP) made technology suppliers from overseas reluctant to invest in India as this was an anti-big-firm, anti-foreign-capital bias.

Role of state

Once of the contributing factors to the flow of ideas between firms, human resources, universities, venture capitalists, IT & legal firms was in both India and Taiwan was their hierarchical bureaucracy creating hard boundaries compared to western counterparts as compared to the porous information boundaries offered by the Nordic regions or Israel. Both nations historically had direct control over their respective science and technology activities and relied little on outside investment. Only one of the two nations, Taiwan, managed to successfully overturn this nationalist approach given its higher officials pushing hard for domestic technological developments at the very outset and brought in foreign investment to the country with tax benefits and ease of business practices under pressures from Chinese governance especially in defence and telecommunications.

Prior to 2016, the Ministry of Electronics and Information Technology of India was categorized under the umbrella department called Ministry of Communication and Information Technology. Currently the peak customs duty for electronic artefacts in India is at 10% while the information technology duty is at 0% as per fiscal policy. In parallel, the excise duties have been vetted for many categories of electronic hardware. There is an allowance of import at 0% duty under the Export Promotion Capital Goods Scheme in place and Special Economic Zones have been set up at various locations across the country in order to promote easier trade of goods and services under the Foreign Trade Policy. A National Policy on Electronics was issued in 2016 by the Indian Government (along with the restructuring of corresponding Ministry) which is now being followed by an upgrade in the financial year of 2019 to combine the government’s Make in India strategy keeping in mind the potential to export electronic hardware and design from India. The new policy now aims to achieve a $400 billion turnover by the year 2020 including the exports which seems to be a lofty goal. Several manufacturing zones and talent development initiatives are planned under this policy.

The landmark shifts in Indian computing advancements lie between 1955 and today (V, 2012). The salient points include

· the Indian Companies Act of 1956

· first proposal of a Department of Electronics to be recognized by the then governance in 1970

· encouragement of indigenous computing systems and parts development by the company Electronics Corporation of India Limited

· continued assistance in electronics and software development from United Nations Development Program

· relaxation in import duties and taxes

· Founding of NASSCOM (National Association of Software and Services Companies) as a measure of reducing foreign debt in 1991 during the globalization, privatization and liberalization reforms.

Post-independence, India continued to keep a nationalist policy in science and technology for a long time with the first ‘national champions’ for S&T development being established around 1948 (Indian Telephone Industries, ITI). Interestingly, none of the three major electronics public enterprises in India – BEL, ITI and ECIL were under the direct control of the Department of Electronics. The departure of IBM from India due to the Foreign Exchange Regulation Act (1974) was an economic milestone during the time of national emergency as declared by the then state leader. As of the current decade, the recommended path to be taken in future as proposed by the Niti Aayog for India can continues to be an export oriented strategy or an import substitution strategy.

Taiwan on the other hand played the role of a competitive entrepreneur. As a state it refrained from imposing tariffs on semiconductor products and did not exercise its power in preferential purchasing of Taiwanese products. Taiwanese DRAM products and the fast saturating nature of this segment have so much as forced the European competition like Siemens to abandon this market making Taiwan eventually, a contributor with as major as 82% in the global outputs around 1995, because it stuck through the saturations instead of scrapping its work in this segment altogether.

Defence and space research spillovers

The Indian defence research and development (R&D) machinery comprises primarily of 52 scientific laboratories and six establishments under the Defence Research and Development Organization (DRDO) which was established in 1948, to maintain partnerships with national S&T agencies, public sector units, private sector industries and academic institutions. The investment in DRDO and Hindustan Aeronautics Limited (HAL), a public sector enterprise comes from the Indian Industrial Defence Base (DIB). DRDO covers various bases like aeronautics, armaments and electronics, land combat engineering, life sciences, materials, missiles, and naval systems, and so forth. The electronic warfare wings has contributed to supercomputer developments and its radar and radio engineering technology has spilled over to civilian use over time. Similarly, the Indian Space Research Organization has done and continues to do pioneering work in Indian Space Technology which has now contributed to spillovers in the civil aviation sector. The defence R&D ecosystem in India and the DRDO in particular has faced criticism for numerous reasons starting from projecting unrealistic cost and time estimates for indigenous projects, delays in completion of ongoing projects leading to steep escalation in cost and compelling the forces to import expensive foreign equipment, not meeting the qualitative requirements as specified by the Services, unduly long developmental times, greater focus on technology demonstrator projects to gain publicity, inadequate experience of developing tactical military systems and so on. Moreover, only recently has the North Atlantic Treaty Organization (NATO) has reconsidered inviting India to be its ally, thereby suggesting change in the long-held nationalist stance of non-alignment of nuclear technologies taken by India since post-independence government took over in 1948. India’s three stage nuclear program starting with Dr. Homi Jehangir Bhabha and the founding of Bhabha Atomic Research Centre to Dr. A.P.J Abdul Kalam’s vision of nuclear energy based economy have all spilled over to the civilian R&D in energy sector.

Given the historical tug of war with China, Japanese dominance and post-World War II impact, Taiwan on the other hand, relies on arms procured from the U.S. and European nations. France, Germany and the Netherlands, sold arms to Taiwan in the past but stopped as a result of pressure from China. As a small island state, Taiwan's defence strategies are primarily focused on naval systems. In its decision to increase support for the defence industry, the Taiwanese government is likely to have been influenced by the South Korean model. The latter has provided significant support to Taiwan’s domestic defence industry since the 1970s, even as much as 70% in the 1990s. Taiwan has its own example of defence investment having positive spillovers for civilian industries. In the 1990s production of the Ching-kuo jet fighter was facilitated by technology transfer from the US to the state-owned Aerospace Industrial Development Corporation (AIDC) and the Chung-Shan Institute of Science and Technology (CSIST). The jet model is still in service, while AIDC now serves as a major supplier for a US aircraft-maker, Boeing. Nonetheless, relatively small potential for economies of scale puts Taiwan's defence industry at a disadvantage compared with its South Korean counterpart. In 2015 Taiwan's defence budget was US$10.7bn. Moreover, external demand for Taiwanese arms is most likely to pale against that for South Korea, which has become a major global arms exporter, unburdened by the political opposition towards inbound technology transfers and arms exports that Taiwan faces from China. Hence major technology spillovers from in-house defence R&D are unexpected in case of Taiwan. However, both intra- and inter-industry spillovers have more significant and important contributions (Tsai & Lin, 2005).

Physical infrastructure

As such the physical infrastructure in India and Taiwan was not conducive enough to support overseas business in the early 1950s. The scope of this section is kept restricted to telecommunications infrastructure to exemplify how the opening up of one single sector has influenced businesses in these two countries. However, power supplies, land or space, degree of corruption in bureaucracy and allied services like healthcare and consumer provisions were also factors that amounted to the physical infrastructure aspect of development. The telecommunications infrastructure was poor in both nations post-independence causing heavy delays in transfer of information with the western world. It was also highly regulated in both nations. India even today is somewhat limited by unreliable/intermittent electricity and telecommunication facilities provided by the state and hence entrepreneurs relied on private operators for this infrastructure. In India it was around the late 1980s that telecommunication sector showed impressive growth and demand, giving its domestic switching business a boost. However, it was only after the opening up of this sector to private entities through relaxed regulations that gave away the reins from Centre for Development of Telematics in India dominating the EPABX, MAX and RAX telephonic exchanges and the two major state owned enterprises MTNL and BSNL for telecom service provision, to outside competition, hence resulting in a competitive oligopolistic market that could reduce the cost of communications for the consumers and increase ease of business. The mobile and broadband industries followed suit.

For Taiwan as well, the telecom service provisioning was earlier handled by the Republic of China and regulation by the National Communications Commission of Executive Yuan. The sector was liberalized along two policy lines – one set of policies aligned with opening up of Asia-Pacific Regional Operations Center and the other set that was pushed out by the National Information Infrastructure. This liberalization happened first around the year 1987, about 4 years before India started implementing liberalization policies in this sector. The terminal equipment market was opened up first and later, value added services were provided to provide consumers with a diversity of telecommunication services. However, there were three laws pushed out in the year 1996, much later than India, which really led to the separation of the Chunghwa Telecom Co., leading telecom operator in the country at that time and the Directorate General of Telecommunications under the control of state. The mobile and satellite communications sub-sector was also liberalized later paving way for competition and betterment of services.

Institution led development

In the industrializing economies of Taiwan and India, institution building for the development of Science and Technology (S&T) has long been accorded an important place in public policy formulation.

Taiwan

Taiwan took the path of organizational measures with Taiwan’s National Science Council being established in 1959 and under the direct reportage of the executive cabinet with the following functions

· To be an ardent promoter of Taiwan’s S&T capabilities for decades, especially during the exigencies it faced in the 1970s.

· To initiate and follow through R&D collaborations between public research institutions and public/private enterprises

· To upgrade the industrial structure by establishing the Hsinchu Science Industrial park and the likes

Even though NSC faced lack of political influence, inadequate analytical components and was plagued by the heavy decentralization in development of indigenous S&T capabilities, it still managed to play a leading role in bringing direction to the Taiwanese electronics industry. Market forces alone could not have sustained this industry unlike the views held by Taiwanese bureaucrats. The Ministry of Economic Affairs established Industrial Technology Research Institute (ITRI) which went on to perform following functions

· Organization and institution building – combining several research organizations into one, including ESRO

· Establishment of a model integrated circuit manufacturing plant and a machining center that would also train a pool of qualified technicians

· Development of process automation technologies, establishment of a power engine laboratory

India

For India, the first efforts in this direction were put with the establishment of Indian Telephone Industries in 1948, predominantly entrusted with the telecom switching equipment and transmission equipment responsibilities was the only major player in telecom equipment until the 1990s. A few years later, India founded the Bharat Electronics Limited that would cater to computers and component manufacturing primarily for the defence sector. ECIL was the most diversified of all public sector institutions in India. More than a decade later, Electronics Corporation of India Limited was made responsible for nuclear device instrumentation, mini and large computers, television sets and generic instruments. The first fabrication effort in India was by Semiconductor complex limited in Chandigarh in 1984 but it could not turn into a success due to low domestic demands despite the low entry barriers in ASIC design for space, defence and telecom sectors. These national champions were aided by 19 state owned companies and 13 public sector enterprises and contributed to nation-wide skill development. Due to lack of equipment to fulfill excessive demands from the Department of Telecommunications owing to telecommunication revolutions, production & operations exceeded budgets by a huge margin. This combined with a no-retrenchment, no re-deployment strategy and bureaucratic hurdles, brought the eventual decline of ITI. India couldn’t utilize low labour availability efficiently due to suboptimal fragmented investment which were driven by political motivations (for example, by hiring one’s relatives or friends to a position of power). CDAC (Centre for Advanced Computing), another major institutional setup in India managed to build a parallel super-processing chip at 1000 megaflop speed and trained several hundred thousands of engineers in the computing arena. It continues to do so till date. A high emphasis on ‘basic research’ and ‘total system capability’ has been given in India across all sectors of the economy with thinly spread resources.

Brain drain and brain circulation

Indians have relied on engagement of local firms with multinational firms for their growth in this particular industry because of limitations in upgrading its own domestic market whereas Taiwan has relied on its Guanxi capitalism. DRAMs, LCDs and related integrated circuits never really showed growth due to limited number of buyers within India as profitable as these segments were globally. But by being hired in an MNC or a contractual design position within a service firm, an Indian engineer got exposed to training in more sophisticated design tasks which academic exercises could not have filled the gap of. On one hand this led to a focus on short-term profits without paying enough attention to long term development goals, this process also resulted in created of a technically skilled labour force in contrast to Taiwan in the past two decades. Brain drain is the phenomenon used to describe migration of local population to new geographies in search of better lives and opportunities. Over the years, Taiwan too has experienced “brain drain”, as more than 80 percent of its students who completed their graduate study in the United States have failed to return. Instead, they have gone on to secure employment in American organizations and universities. India has similarly even to this year ranked as the top nation to push out immigrants to the United States of America between 2003 and 2013 there was an 85% increase in these figures. The advantage both Taiwanese and Indian migrants could offer was their co-ethnicity, being able to interact with the Indian and American population alike although Indians were at a linguistic advantage. Even back in 1995, the director of ITRI/ESRO (Taiwan) packaging wing was a former Vice President of a packaging company in the US. It was such examples of employing returning talent that helped ITRI/ESRO become pioneers in the passive device process and chip bonding technology and MCM designs. A new set of opportunities come about when national R&D population goes over to the United States of America or any successful state for a particular sector, for educational advancement and returns back to their home countries. Saxenian refers to this phenomenon as more akin to ‘brain circulation’ rather than ‘brain drain’. Digitization has caused lower transaction costs in sharing technical know-how between American and developing-world technologists, even more so than large multi-national corporations. Several technologists in both India and Taiwan have returned back to their home countries and founded their own start-ups although the numbers are far higher in case of Taiwan. Although, Saxenian criticizes India for not taking advantage of a large co-ethnic expatriate human capital enough unlike China and Taiwan (Saxenian, 2002).

Spin-offs

The United Microelectronics Corporation was the brainchild of ESRO in Taiwan, established in 1980 at the Hsinchu Science based Industrial park, geographically positioned closed to ESRO. Rakesh Mathur from Intel in Silicon Valley started three successful ventures – Armedia, Junglee and Stratify out of which Armedia was in hardware design. He realized that there was a shortage of trained engineers in the Silicon Valley and decided to create these startups in Bangalore, registered in America. There happened to be a time advantage in working with Indians and Americans because of the time zones such that ramp up/maintenance work could be accomplished off business hours on American time easily. While these startups were training professionals in India, they were also sending them to on-site projects (a trend that got picked up heavily by the Indian software services industry), thereby making the Indian workforce more aware of the ways of American businesses and hence having a trickle down impact when these startups also spun off.

Bringing in the venture capitalism model

Literature suggests, that the way to develop capability and encourage development in a global production network is to bring the local firms (nationalized or private), engage with multi-national corporations that already are positioned in the global value chain and help run the global production network by increasing the flow of ideas (Fuller, 2013). The deeper this engagement, the better is the access to technological capabilities, making the ‘suppliers’ India and Taiwan better positioned in the chain and creating dependencies on these nations. Saxenian points out that Taiwan today has one of the largest venture capital industries outside of North America in its run to become the leading personal computer and integrated circuit manufacturer, relying largely on returning scientists, engineers and transactional investors. K.T Li, the Taiwanese finance minister in the 1970s vouched for a link between the American venture capital industry and the Ministry of Finance in Taiwan. It was clear that Taiwan policymakers at very early stages had studied the US markets and imbibed not just technical but even financial lessons. Taiwanese bureaucrats consulted investment professionals and tied up with large American banks in order to secure funding for in-house firm. Li performed in legislature, an action quite divergent from the traditional Taiwanese approach, creating 20% capital investment in technology intensive ventures to be tax-deductible for up to five years. The government also gave out ‘seed funds’ and gave rise to Acer’s first domestic venture capital firm – Multiventure Investment in association with Continental Engineering Group. Ding Hua Hu, a Princeton alumnus also used his professional networks in order to secure financing for ESRO establishment.

India on the other hand was dominated by family centered business models and given the resources, coordination of large, diversified legacy conglomerates started by Jamshedji Tata and Seth Shiv Narayan Birla in 1868 and 1857 respectively. Even with high connectivity costs and heavy foreign investment restrictions, Draper and Richards managed to penetrate India with a venture capital market for US based firms operating in India, as is demonstrated in the case of Rediff Communications. In their experience, a lot of information on the deals going on in the United States was readily available in India as soon as they happened but die to the policy ecosystem it was difficult to create a Silicon-valley-like entrepreneurship avenue back in the 1990s. The case of Northern Telecom’s research and development projects as jointly operated by four Indian firms did not establish long term impact on domestic skill development. Saxenian refers to the supply of venture capital in India as plagued with multiplicity of conflicting, often cumbersome and anachronistic regulations combined with an array of other forms of discrimination against the industry. The 1991 economic reforms of India did open up some of these avenues but most firms stuck to keeping the operations within India while holding on to actual R&D tasks in parent countries. Hence, economic reforms to liberalize the market was not enough for entrepreneurial success that could sustain global competition.

Conclusion

Several non-technology factors have contributed to the different development trajectories demonstrated by Taiwan and India in the electronic hardware segment. Both nations began from a nationalist and protective approach with focus on creation of domestic markets but Taiwan was just-in-time in realizing all the changes that it needed in order to welcome the American and European businesses and improve its economy. The nation extracted its full potential from the low skilled labour force and became a facilitator and competitive entrepreneur at different points of its development trajectory. India, also a follower of the American markets, could not for several policy decisions and limitations, manage to make a niche for itself in the electronic hardware segment but was able to use its lessons successfully with a full-fledged software industry tailored for exports.

References

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