Taiwan Scared Of Technology Transfer

from the uh-oh... dept

Taiwan is apparently worried about China stealing trade secrets from Taiwanese firms, and is considering increasing the penalties for technology transfer outside of the island. This is bound to backfire. It's a protectionist policy on the hardest item to protect: information. The information will get out one way or another eventually. At some point, these firms have to realize that their competitive advantage isn't going to be in the information that's already out there, but their ability to come up with newer, better information and processes. In fact, by blocking the ability of Taiwanese firms to use the information on existing manufacturing processes in cheaper nations (such as, yes, China), they're just guaranteeing to make life more difficult on those Taiwanese firms when the information does get out -- and it will get out. Those Taiwanese firms then won't be able to compete with the cheaper manufacturers, unless they continue to improve on the processes and information -- which is what they should be focusing on anyway. The silly thing about all of this, is that much of the success of Taiwanese semiconductor industry is based on technology transfer from the US and the rise of "fabless" semiconductor firms in the US, which had some in the US worried about our knowledge going to Taiwan. Instead, it resulted in quite the boom in the US (and elsewhere). Apparently, that lesson hasn't sunk in with Taiwanese protectionists yet.