Economic Change and Restructuring

, Volume 49, Issue 2–3, pp 221–240 | Cite as

Some characteristics of innovation activities: Silicon Valley, California, China and Taiwan

  • K. C. Fung
  • Nathalie Aminian
  • Chris Y. Tung


In this paper we examine some characteristics of the innovation activities in China and in Taiwan. For comparison, we also highlight some high-technology features of Silicon Valley and California. We use two models to look at innovation activities in California, China and Taiwan: The “Silicon Valley” model and the “layered model”. For China, we highlight the important role of the early technology cluster in ZGC in Beijing. ZGC has some positive features for growth such as government support, spinoffs as well as agglomeration effect like Silicon Valley. But the most interesting development in China is the evolution of its internet-related sector. We argue here that the internet-driven economy is a radical, systemic technological change and it is rapidly growing in China. In addition, the development of the internet economy will have substantial implication for China’s nature of growth. It can boost productivity and may even propel China into a high-income economy. Taiwan’s development of high-technology relies on the establishment of a major science park and an important research institute. Like China, government support and the expertise provided by the trans-Pacific “returness” are crucial. But unlike China or Silicon Valley, Taiwan is stuck in a manufacturing- and hardware-focused segment of the industry. Taiwan needs to upgrade to software and the internet-focused segment but so far with limited success.


Silicon Valley California Innovation China Taiwan 



We are grateful for very constructive comments by a referee. Portions of this paper are written while K.C. Fung is on sabbatical from the University of California and is a Visiting Professor at the School of Economics and Finance as well as at the School of Business of the University of Hong Kong. He appreciates the wonderful hospitality shown by the University of Hong Kong.


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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.University of CaliforniaSanta CruzUSA
  2. 2.University of RouenRouenFrance
  3. 3.National Sun Yat-sen UniversityKaohsiungTaiwan

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