Strategies for Establishing New Industry: A Case Study of Broadband Communication Equipment Industry Development in Taiwan

In the early 1990s, the low-end customer premises equipment (CPE) such as telephone, analog modem were the major products of Taiwan communication industry, and the local small to medium size corporations had limited resources for R&D in comparison with those of foreign advanced manufacturers. As the strength of the communication industry signified the critical index of a country’s competitive edge, Taiwan government ranked the communication industry as the top of the 10 emerging industries and assigned ITRI (Industrial Technology Research Institutes), the largest research and technology development organization sponsored by MOEA (Ministry of Economic Affairs), to conduct Technology Development Program (TDP) in support of the erection of high-end communication technology for local vendors. This study uses longitudinal study and case analysis in association with the theories of learning of industrial technology, industrial innovation mechanism and Needs, Solution, Differentiation and Benefits (NSDB) method to explore how the local communication industry evolved from providing the low-end CPE to the broadband Internet CPE & loop access equipment. The study result shows that selecting the products which meet the market demands with more add-on values and the local vendors can easily plunge into, grouping the joint R&D team combining the mutually-beneficial domestic and worldwide resources with effective work-division model, and emphasizing on long-term planning are the key factors to establish new industry and uplift the industrial competitive edge rapidly.