Taiwan’s long-term economic competitiveness will hinge not only on national champions like Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) but also on the widespread adoption of artificial intelligence (AI) and other emerging technologies, a US-based scholar has said.
At a lecture in Taipei on Tuesday, Jeffrey Ding, assistant professor of political science at the George Washington University and author of "Technology and the Rise of Great Powers," argued that historical experience shows that general-purpose technologies (GPTs) — such as electricity, computers and now AI — shape long-term economic advantages through their diffusion across the broader economy.
"What really matters is not who pioneers a breakthrough first, but which country can take frontier innovations and diffuse them throughout the entire economy," Ding said.
Photo: CNA
Ding said the US is "counterintuitively" in a much stronger position than China in the AI race, despite public perceptions.
Citing data from the 2020 Global Innovation Index, Ding said the US and China were placed similarly in innovation capacity, with average rankings of 11.9 and 13.8, respectively, but diverged sharply in diffusion capacity, with the US ranking around 18th compared with China’s 47.2, according to his analysis.
Applying the framework to Taiwan, Ding said the island’s rise in semiconductors already demonstrates the importance of scaling, manufacturing expertise and dense industrial ecosystems, rather than monopolizing upstream innovation.
Taiwan did not dominate upstream invention in chip technologies, but succeeded by translating overseas innovations into advanced manufacturing processes and building an extensive network of suppliers that enabled global production, Ding said.
However, Ding cautioned that as AI increasingly reshapes services, manufacturing, logistics and other sectors beyond high-tech hardware, relying too heavily on flagship firms may not be enough.
"AI is not just a technology for a few leading companies," he said. "Its economic impact depends on whether small- and medium-sized enterprises, traditional manufacturers and service industries can adopt and adapt it."
For Taiwan, he said, strengthening second-tier universities, vocational training and applied AI skills may be as important as maintaining leadership in advanced manufacturing.
"If the question is long-term economic power," Ding said, "then the ability to spread general-purpose technologies across the economy matters more than dominating any single frontier."
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