Taiwan’s market share in advanced industries relative to its size is more than double the world average, driven almost solely by its dominance in computers and electronics, according to a report issued Wednesday by a Washington-based research institute.
The report by the Information Technology and Innovation Foundation (ITIF) measured the performance of 10 leading economies across seven key sectors in the years 1995, 2006 and 2018.
The sectors covered in the report included pharmaceuticals; medicinal, chemical, and botanical products; electrical equipment; machinery and equipment; motor vehicle equipment; other transport equipment; computer, electronic, and optical products; and information technology and information services.
It found that in 2018, Taiwan’s market share in these industries relative to its size was 219 percent higher than the global average, followed by South Korea at 206 percent.
By contrast, Germany’s relative share of the global market in those sectors was 74 percent higher than the global average, Japan’s was 43 percent higher and China’s 34 percent higher, while the U.S. finished below the global average.
In terms of Taiwan’s performance, the report noted that its global share of advanced industrial production sectors had declined slightly over the last 25 years, slipping in six of the seven industry categories.
However, in the one remaining industry category — computers, electronics, and optics — Taiwan’s global share grew by 1.3 percentage points, largely due to the performance of companies like TSMC and Hon Hai Precision Industry.
Overall, the report said that Taiwan’s advanced industrial output was “the least diversified” of the countries included in the study, with almost nine times more computer and electronics production as a share of its economy than the global average.
“Because of this, advanced industries make up more than twice the share of its economy as the global average,” despite Taiwan’s weakness in industries such as pharmaceuticals and automobiles, the report said.
More broadly, the ITIF report aimed to highlight the United States’ relatively weak position in a range of advanced industries that are strategically important for economic and national security.
Compared to China, whose share of global output in the industries grew from less than 4 percent in 1995 to 21.5 percent in 2018, the U.S.’ market share dropped from 24 percent to 22.5 percent, the report said.
Calling the findings “an urgent wakeup call,” the report urged the U.S. government to launch an economic “moon shot” initiative aimed at increasing its relative level of advanced industry concentration by 20 percentage points over the next decade.