1 Taiwan ’ S Economic Development : the Role of Entrepreneurship and Its Incubating Factors

The abundance of active and innovative entrepreneurs has been ascribed as one of the main reasons for Taiwan’s miraculous economic development. This paper expounds upon the past 60 years and how Taiwanese business behaviour has been manifested by adaptive entrepreneurship. Taiwan’s entrepreneurs exercise their alertness to opportunities, use guerrilla strategies to profit whenever possible, manoeuvre in and out of regional arbitrages to exploit benefits from international production networks, as well as learn and improve their capabilities to upgrade their own technology. Although some of Taiwan’s firms have recently reached world class levels in being able to conduct the original engineering design, it is rare to see a Schumpeterian type of revolutionary entrepreneurship. With its idiosyncratic environment, we ascribe Taiwan’s abundant entrepreneurship to political, social, and economic factors, which interweave as well as very often reinforce each other. We demonstrate that a stable economic and political environment, coupled with the practice of the Confucius philosophy of pragmatism, has helped incubate Taiwan’s post-war entrepreneurship.