Taiwan's Economy
Small Firms, Big Exports
How Taiwan's export boom was driven by many small and medium family firms in flexible networks, unlike South Korea's giant chaebol.
Taiwan’s export growth relied heavily on small and medium enterprises (SMEs).
Contrast with Korea
- Korea built giant chaebol like Samsung.
- Taiwan had many small, family-run firms.
How SMEs worked
- Networks of subcontractors made parts for each other.
- Flexible production switched quickly between products.
- Trading companies and buyers connected them to global markets.
Products
In the 1960s-80s, Taiwan exported textiles, shoes, umbrellas, toys and bicycles, earning the label “Made in Taiwan”.
Export processing zones
Taiwan opened one of the world’s first export processing zones in Kaohsiung in 1966.
Equality
SME-led growth spread incomes widely, keeping inequality relatively low.
Lesson for India
India’s MSMEs could learn from Taiwan’s networks and export focus.
In Taichung, dozens of small firms each make bicycle parts, which are assembled into bikes exported worldwide.
Taiwan's small firms drove its exports.
- Taiwan's exports relied on small and medium firms.
- Firms formed flexible subcontracting networks.
- Taiwan opened an early export zone in Kaohsiung in 1966.
- SME growth kept inequality low.
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