PUBLICATIONS & REPORTS

Contents Introduction

Although Taiwan made its well-respected economic achievements at the catch-up period, the country is in transition to innovation-driven economic upgrading, which is recently being promoted by a strategic policy package of so-called the Industrial Transformation Program, focusing on 5+N innovative industries. Unlike the previous focus on modularized intermediate goods in the industrialization stage, the new policy package calls for innovation with strong flavor of cross-fertilization, solution-orientation, software and hardware integration. A key issue of this paper is how a latecomer like Taiwan may innovate in a post catch-up manner, which requires a latecomer country to establish new technological trajectories for innovation in a changing competitive environment where scarce opportunity for imitation is present. The paper sets out to examine the ways in which how Taiwanese firms approach or harness IoT innovations, especially via applications at the social sphere. It seems to present more challenges than IoT applications inside the firm (for example Industry 4.0) for the reason that IoT applications at social sphere are related to the aspects of behavior and social interfaces of the broadly-defined customer space. As a result, for innovators in Taiwan, they need to address the social interface involved in an appropriate manner. In many cases, they also need compound innovations, especially in conjunction with business models, not just technological innovation alone. Therefore, innovators in Taiwan have to change the way in which they innovate and interact with the changing innovation ecosystems. Especially in the emerging innovative sectors as 5+N innovative industries targeted by the government, the evolving innovation ecosystems are intrinsically international. Based on two intensive case studies, we would like to draw some lessons learned in Taiwan, which may enrich our understanding of factors underlying industrial innovations in the era of the digital economy, especially for latecomer countries in transition.