With their abundance of cheap labor, China and other countries have developed massive labor-intensive industries. In response, the world's advanced countries, including Finland, are developing knowledge-based economies. Finland's experience provides a key model for knowledge-based economic development.
In the middle of the 20th century, Finland's major industries were forestry and agriculture, but in the 1990s, after years of effort, the Finnish government finished transforming the economy into one based on information and communication technology (ICT).
The country has since topped almost every international ranking for competitiveness or knowledge-based economies.
However, Finland is not content to rest on its accomplishments. The government has no-ticed the potential threats of the growing "China phenomenon" brought on by globalization and has therefore written a proposal entitled The National Knowledge Society Strategy 2007 -- 2015.
As the proposal states, for Finland to further promote its knowledge-based economy, "the strategic priority has shifted from being a society that utilizes ICT to one that generates knowledge-based growth."
Thus, the nation plans to transform into an "internationally attractive, human-centric and competitive knowledge and service society" that will have "an open society, a good and safe living environment, the opportunity to flexibly combine work, family and leisure time, as well as the continuous development of knowledge."
As a result, the Finnish government has proposed three guidelines: "First, reforming the service sector; second, improving quality of life; third, developing sustainable competitiveness in enterprises."
The experiences of Finland and other European countries in developing knowledge-based economies show that the first stage of the transformation toward becoming a knowledge-based economy is based on the existing industrial structure.
Today, the development of Taiwan's knowledge-based economy is similar to those in northern Europe during their initial stage, as it is mostly based on Taiwan's existing industrial structure.
Since a large part of Taiwan's industry still relies heavily on original equipment manufacturing (OEM), "knowledge" for these industries means improving manufacturing processes and technologies. However, at a time when China and other large developing countries are transforming into knowledge-based economies, development of an OEM-oriented, knowledge-based economy in Taiwan will inevitably face greater challenges in the future.
Taiwan needs new thinking and methods if it wants to transform itself into a real knowledge-based economy.
The comparison with Finland and China can yield ideas and inspiration when implementing knowledge-based economic development. By directing and planning the development of its knowledge-based strategies, Finland has not only been able to take the competitive lead worldwide on a macroscopic level, but it has also given its people a high sense of happiness.
In the next phase, the development of Taiwan's knowledge-based economy must connect with the nation's own characteristics and aim for excellent standards of living to develop a knowledge-based economy that makes people happy. Facing the challenges of globalization and the China phenomenon, we must find new ways of thinking to construct a knowledge-based economy with Taiwanese features, humanism, creativity and competitiveness.
Lu Chun-wei is a doctoral student in the Department of Political Science at National Taiwan University.
TRANSLATED BY EDDY CHANG
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