Taiwan has succeeded in transforming from a low value-added assembler to a technology designer and provider over the past decades. To keep growing in the future, MIT scholar Donald Lessard said enterprises have to create "recipes" others will follow.
The professor of international management emeritus at MIT Sloan School made the remarks at "Building a Better World," a master series organized by Epoch Foundation and MIT Sloan School of Management.
Rafael Reif, president of MIT, said the series is to mark the 30-year partnership between Epoch and MIT. Leading faculty and researchers at MIT will share their insights on topics of special importance to Taiwan in science, technology, management, and policy.
In a speech titled Taiwan's evolving positioning and competitive advantage, Lessard, who has worked with various Taiwan-based enterprises, said the collaboration over the past 30 years between Epoch and MIT focuses on the competitiveness of the nation and firms. He said he enjoyed watching Taiwanese firms become world leaders and seeing Taiwan grow as a political entity.
Using cooking as a metaphor, Lessard said what differentiates a company or a country is the ability to create a "recipe" that others will follow.
"If you think about large systems, digital information systems, electrical systems, etc. Creating recipes that work in those situations really matters. And if you focus on the abilities to create recipes, then you need to think about what the mechanism is for curating those capabilities and growing them over time," Lessard said.
The professor mentioned the RATs and CATs framework, to which he introduced and has constantly talked about in the Epoch-MIT program. The RATs check if the capabilities developed domestically are relevant to other markets, if they are appropriable by the company and if they can be transferred to other places.
Lessard said Taiwan, with an integrated policy system, can tweak its own condition, so what happens at home can be relevant in other places. He said Taiwan is a little bit like Finland's early digital age when Nokia emerged as a lead firm, following European and US standards, but was not trapped by either.
"One could imagine Taiwan in a very similar position of being able to cross that boundary, of being both open to the West, open to the East, operating there," Lessard said.
He also highlighted the CATs, which focus on how companies find new "business recipes" that are complementary to their operation. Once they are ready, companies can transfer those practices to other locations. Lessard said a company could build a dynamic system over time through the process.
While some might say Taiwan is in a difficult position with the ongoing US-China competition, Lessard said the situation is likely to be extremely moving and dynamic but could have many "technological advantages." The possible results from Taiwan's intimate connection with the technologies and markets of the West and the East and with supply chains.
