Innovation in Taiwan

Editor: Shih-Chang Hung, Professor, National Tsing Hua University, Taiwan

Aug. 2018

Innovation is important to firm growth and economic development. This is particularly applicable to countries such as Taiwan, which, as a small island with limited resources, has historically pursued new wealth creation to justify its political sovereignty and earn international recognition. The literature on national innovation systems, for example, has documented Taiwan as a system of entrepreneurship, characterized as a bunch of SMEs and risk-taking entrepreneurs aspiring to innovate against competitive pressures and established giants (Hung & Whittington, 2011). Innovation prevails from the long-lasting OEM sector to the new age of information technology and digitalization. As high-tech industries such as personal computers and semiconductors began to emerge on the island in the 1980s, or at present with the coming of AI, VR/AR, cloud computing, blockchain, etc., innovation is expected to be more important than ever, and has the potential to give Taiwan the edge of reinforcing its competitiveness even further. This trend in turn has led many management scholars to study the antecedents and consequences of innovation and, as a result, to make important contributions to the literature ranging from strategy and marketing to organizational behavior and operations management. Hence the theme of this virtual issue: innovation in Taiwan. In a world characterized increasingly by disruption, uncertainty, and newness, innovation is becoming the king of management, leading researchers in turn not just to revisit Schumpeter’s (1942) notion of creative destruction, but also to look at and open the innovation box from every possible angle and perspective. The six papers selected here address this research agenda to a certain extent. We hope that this virtual issue will encourage and inspire more scholars to engage in innovation study and together further the research with a prosperous future.

“Organizational innovation vitality and its outcomes: Exploring the moderating effect of time pressure” by Michael L. A. Hsu and Hsueh-Liang Fan

The first paper addresses the moderating effect of time pressure on creativity and innovation. The literature on the relationship between time pressure and employee creativity shows conflicting results. Here, Hsu & Fan’s (2011) paper examines the relationship between organizational innovation vitality and its outcomes, and time pressure is modeled as its moderator. Its data is collected from 470 R&D employees at four national research institutions in Taiwan. They found that organizational innovation vitality positively related to employee creativity and job satisfaction, and that time pressure negatively related to employee job satisfaction. Additionally, in the structural equation model, time pressure moderates the relationship between organizational innovation vitality and its outcomes. It is also found that, in the case of weak organizational innovation climates, time pressure could enhance employee creativity.

“Sincere or insincere? Exploring the relationship between emotional labor and innovative behavior” by Sheng-Tsung Hou, Hsueh-Liang Fan, and Wan-Chien Lien

Similar to the first article, the focus of Hou, Fan, and Lien (2015) is the relationship between emotional labor and innovative behavior. Literature on emotional labor has shown that required emotion has an effect on employees’ performance, but few researchers examined how emotional labor influences employees’ innovative behavior. In this research, the authors collected data from male truck drivers employed by a large transportation company in Taiwan. The results revealed that employees with high role identification are likely to engage in deep acting, and consequently rank higher on scores of innovation practices. Furthermore, a competitive team climate strengthens the relationship between surface acting and innovative behavior.

“Critical factors of collaborative commerce adoption: An empirical study” by Shin-Yuan Hung, She-I Chang, Kai-Chu Hsu, and I-Cheng Chang

In this paper, Hung, Chang, Hsu, and Chang (2010) set out to investigate the factors of technology adoption of collaborative commerce. Collaborative commerce is a new technology or idea that helps a company to optimize its collaboration and communication with external partners. However, it is usually expensive and complex, so not many companies adopt it. Here, an integrated model based on innovation diffusion theory is proposed. Empirical data are collected through survey from supervisors in information departments. The authors found that the critical factors include relative advantage, technological capability, organizational compatibility, observability, employee’s IT skills, business scale, and trust toward partners.

“Diversity of external innovation, absorptive capacity, and innovation output: An example for companies listed on Taiwan Stock Exchange Markets during the period from 2000 to 2004” by Yu-Lin Chen

This paper single-authored by Chen (2011) uses the theory of open innovation to examine whether the diversity of external innovation can promote innovation performance where the diversity of external innovation includes mergers and acquisitions, R&D cooperation, technology transfer, and technology licensing contracts. The author tries to determine how absorptive capacity moderates the diversity of external innovation and its output. The analytical results show that the diversity of external innovation enables an enterprise to support superior performance, and among those elements of external innovation, mergers and acquisitions and technology transfer are the most significant.

“Institutional work in building service innovation” by Min-Fen Tu and Shih-Chang Hung

In this study concerned with contextual and institutional innovation, Tu and Hung (2016) draw on institutional theory to study how ITRI (a statutory agency) successfully promotes the new institutional logic of service innovation. Manufacturing had been the dominant logic of ITRI, and it determined all ITRI’s projects and activities. In order to transform the institutional logic from manufacturing to service innovation, ITRI performed some institutional work. This paper is a qualitative case study with the use of grounded design. The authors develop three types of institutional work, including identity work, professional work, and discourse work.

“Untangling the emergence of dynamic capabilities: Variety-inducing organizational routines for technological innovation” by Sonya H. Wen and Ji-Ren Lee

The emergence of dynamic capability and how it evolves over time has been the central issue of organizational innovation.This paper by Wen and Lee (2012) draws on the view of co-evolution to explore how TSMC undertakes strategic renewal and uses organizational routines to facilitate technological innovation. In their case study, TSMC is supposed to experience the creating phase of mature process innovation, the extending phase of advanced process innovation, and the modifying phase of product innovation. Each phase illustrates the role of variety-inducing and variety-reducing organizational routines and their interactive patterns co-evolving with core strategies of technological innovation.


Hung, S. C., and Whittington, R. 2011. Agency in national innovation systems: Institutional entrepreneurship and the professionalization of Taiwanese IT. Research Policy, 40 (4): 526-538.

Schumpeter, J. A. 1942. Capitalism, socialism and democracy. New York, NY: Harper and Row.

Articles in the Virtual Issue
  • Organizational Innovation Vitality and Its Outcomes: Exploring the Moderating Effect of Time Pressure

    By Michael L.A. Hsu and Hsueh-Liang Fan

    Published Jun. 2011

    The effect of time pressure on employee creativity is controversial, and studies in examining the relationship between time pressure and employee creativity obtained conflicting results. This study updated the concept of organizational innovation climate into organizational innovation vitality, then examined the relationship of organizational innovation vitality and its outcomes (employees creativity and their job satisfaction), and explored the moderating effect of time pressure on the relationship between organizational innovation vitality and its outcomes. Data were collected from 470 R&...

  • Sincere or Insincere? Exploring the Relationship between Emotional Labor and Innovative Behavior

    By Sheng-Tsung Hou, Hsueh-Liang Fan and Wan-Chien Lien

    Published Sep. 2015

    Previous researches on emotional labor have shown that the display of required emotions has an effect on the performances of the employees. How individual employees respond to customers and adjust their emotions accordingly can be considered a demonstration of innovative behavior. However, there exists limited prior literature examining how emotional labor influences an employee’s innovative behavior. Collecting cross-level data from male truck drivers employed by a large transportation company in Taiwan, this study tested the relationships among role identification, emotional labor (surface a...

  • Critical Factors of Collaborative Commerce Adoption: An Empirical Study

    By Shin-Yuan Hung, She-I Chang, Kai-Chu Hsu and I-Cheng Chang

    Published Mar. 2010

    Collaborative commerce has recently become a killer application of information technology for business collaboration, which helps business sustain their competitive advantage by information sharing, process integration and collaboration. However, not many companies actually adopt collaborative commerce because of its complexity and high cost. This study is to examine critical factors of collaborative commerce adoption. An integrated model was conducted based on innovation diffusion theory. Four constructs (including: characteristics of collaborative commerce technology, organizational characte...

  • Institutional Work in Building Service Innovation

    By Min-Fen Tu and Shih-Chang Hung

    Published Dec. 2016

    We draw on the concept of institutional work to explore how strategic actors change institutional logics. Concerned with the “how” question, we adopt an in-depth case study to examine ITRI, a Taiwan-based statutory agency, which has successfully promoted the new institutional logics of service innovation. We identify three types of institutional work. The first is identity work in which ITRI engaged in defining the problem, developing an agenda, and restructuring organization positions. The second is professional work in which ITRI networked with professional communities, promoted foresights, ...

  • Untangling the Emergence of Dynamic Capabilities: Variety-inducing Organizational Routines for Technological Innovation

    By Sonya H. Wen and Ji-Ren Lee

    Published Jun. 2012

    How dynamic capabilities emerge and evolve in an organization has been a central inquiry in the literature on dynamic capabilities. Applying the lens of co-evolutionary dynamics, we explore how an organization undertakes strategic renewals and uses organizational routines in order to facilitate technological innovation, leading to the emergence of dynamic capabilities. We discuss our qualitative case study of the sequential strategic renewals that enabled a specialized semiconductor foundry (Taiwan Semiconductor Manufacturing Corp., TSMC) to transform from a technology-latecomer to a technolog...

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