Chaiwan, The Innovation Economy, and our need to Educationally as well as Economically Re-Imagine Ourselves

The “four tigers” of East Asia established a model of export-led economic growth in the post-World War II global economy which demonstrated the potential for smaller governments to become economic powerhouses without a rich foundation of “traditional” natural resources like petroleum or other raw, natural materials.

According to the current English WikiPedia entry:

The term Four Asian Tigers or Asian Tigers refers to the highly developed economies of Hong Kong, South Korea, Singapore, and Taiwan. These regions were noted for maintaining exceptionally high growth rates and rapid industrialization between the early 1960s and 1990s. In the 21st century, all four tigers transformed into advanced economies and high-income economies. These regions are still the world’s fastest growing industrialized economies, but attention has increasingly shifted to other Asian economies which are now experiencing faster economic transformation.
All four Asian Tigers have a highly educated and skilled workforce and have specialized in areas where they had a competitive advantage. For example, Hong Kong and Singapore became world leading international financial centres, while South Korea and Taiwan became world leaders in information technology. Their economic success stories became known as the Miracle on the Han River and the Taiwan Miracle and have served as role models for many developing countries.

Often in discussions about international educational quality, pundits will banter about statistics showing how competitive as well as high-achieving students in these east Asian nations are relative to the United States and other Western countries. East Asian tiger governments, economic systems, and educational systems are (at times) held up as models for other nations seeking to reinvent themselves and thrive in our global, market-driven economic system. The relatively recent documentary film, “Two Million Minutes,” is a case in point. I blogged briefly about this in January 2008. The overarching theme of the film is that rapidly developing nations like China and India are going to “eat our lunch” (from the vantage point of U.S. leaders) if we don’t get serious about economic competitiveness in our flat world. This is also a major theme of Thomas Friedman’s 2005 book, “The World Is Flat: A Brief History of the Twenty-First Century.”

A number of nations have taken note of the economic potential for export-led growth in past decades and adopted tax incentives for companies to relocate to their shores or open branch offices within their borders. The primary reason for these relocations include cost savings not only related to corporate taxes, but also tied to a ready supply of highly skilled (and comparatively less expensive) workers than those found in many other nations. Ireland is one nation outside of east Asia which comes to mind in this regard. Dell has operated a major manufacturing facility in Limerick, Ireland, for the past 18 years. The CNET news article from January 9, 2009, “Dell’s Ireland plant to shed 1,900 jobs,” highlights the volitility of the global economic marketplace and the fact that there are no employment guarantees. As Dell closes “its manufacturing operation in Limerick, Ireland, and… [shifts] …production to its Polish plant and to third-party contractors,” it demonstrates vividly the fluidity of manufacturing and employment opportunities in our flat word. According to the article:

Commenting on the move Sean Corkery, vice president of operations, Dell Europe Middle East and Africa said: “This is a difficult decision, but the right one for Dell to become even more competitive, and deliver greater value to customers in the region.”

Rephrased, the message is simple: Dell can save more money and produce high quality goods at less cost by relocating manufacturing facilities to other places.

Government, economic and educational leaders in the twenty-first century cannot afford to “stand still” and assume the paradigms of the past are sufficient for “success” today and tomorrow. Whether we are talking about Ireland, the “four tiger” nations of East Asia, or my home state of Oklahoma, shifting economic conditions highlight the importance of nations re-evaluating political, economic, and educational strategies. This is, incidentally, a key goal of our “Creative Oklahoma” initiative. The synergy of economic, educational, and cultural factors which produce a climate conducive for creativity is a critical issue for leaders to understand as well as nurture.

Our current economic recession is prompting some leaders in other nations to reconsider and adjust national strategies for economic competitiveness, and it’s worth noting their observations as well as plans of action. In the case of Taiwan, some leaders are noting the importance of a diversified economy which is not exclusively dependent on the consumer as well as industrial demand from the United States, as well as the vital need for educational systems which promote innovation and creativity. In the July issue of TIME magazine in the article, “Taiwan: Rebooting the Dragon,” Michael Schuman writes:

Government and business leaders believe Taiwan needs to become more diversified and integrated into the regional economy, which is increasingly dominated by China. “The main lesson we learned in the financial tsunami is that we are only dependent on our export industry, in particular IT,” says San Gee, deputy minister of Taiwan’s Council for Economic Planning and Development. The idea is to “transform our overall economy to a different stage.”

“What do you think of Chaiwan?” Christine Chen, an anchor on Taiwan’s ETTV news network, asked me during a June visit to Taipei. The term Chaiwan, she said, was the talk of Taipei. Turns out that the word, meant to connote the growing economic ties between China and Taiwan, was supposedly coined by the South Korean press. The Seoul Economic Daily, a Korean business newspaper, recently ran a series of articles under the banner: “The Chaiwan Storm Is Coming.” One noted that “the combination of China’s capital and Taiwan’s high technology … warns us of a powerful fusion of forces that cannot but present a threat to Korean industries.”

Whether you agree or disagree with the themes of “Two Million Minutes” and Friedman’s “The World is Flat,” it is impossible (as well as perilous) to ignore the ascendency of China on the global economic stage. When I was in Washington D.C. recently for the NECC 2009 conference, I saw a subway rider reading a book (with a title I unfortunately did not record and cannot find now on Amazon) making the case that China’s ascendency means decline for U.S. geo-political and economic power. There are plenty of books available today with themes like this, and the thesis is not a major stretch to accept. Are we witnessing a titanic shift in global power, from the United States to China? This is certainly a strong theme in the well known video presentation, “Shift Happens.” I’m inclined to believe we are.

What should the economic foci be for competitive national and state governments in the “developed” world today? Michael Schuman’s article again provides insight:

In Kaohsiung, the government in 2008 opened a software park to spur tech start-ups alongside the city’s traditional export factories. Nationally, Ma’s administration has targeted six “flagship” industries for investment and development: biotech, health care, high-end agriculture, tourism, green energy, and creative and cultural businesses such as traditional arts and pop music. The government intends to support these sectors by providing financing, improving the capabilities of state research institutes and other measures. “We are keenly aware these industries in five to 10 years will be the major industries of the world,” Ma recently told TIME.

A focus on creativity and innovation is essential in this climate, and Schuman brings this out in the closing paragraphs of his article:

The key to the government’s grand plans is fostering innovation. Though its companies and research centers have been adept in past decades at advancing manufacturing systems and paying catch-up with the West, they haven’t proven as capable of breaking new ground. To remain competitive, Taiwan has to develop its own technology, not just manufacture technology products… Whether such efforts can truly work may determine the fate of Taiwan’s economy. “The old model is a top-down approach,” says ITRI president Johnsee Lee. “The innovation economy has to be more bottom-up. It needs more talent.” Morris Chang says Taiwan lacks that talent, because the country’s education system stresses rote learning, resulting in “very little independent thinking and very little creativity.” Chang also points out that Taiwan has to contend with a greatly changed international environment. “China wasn’t in the picture 30 years ago, neither was India,” Chang says. “You have a big competitor that can do the basic stuff at least as well as you can, but they can do it more cheaply.” His conclusion: “The next transformation is going to be very hard,” he says. Even with its history of beating the odds, Taiwan may be facing its stiffest challenge yet.

What are national and state leaders in your community saying about how we need to re-imagine and re-orient ourselves educationally as well as economically to address rapidly changing dynamics in the global economy? The day leaders in Taiwan and mainland China are even thinking about a term like “Chaiwan” marks a HUGE departure from a history of animosity. Economic incentives can provide powerful reasons to change behavior. Should “we” (in the United States) simply try and replicate the East Asian educational model which has historically placed virtually ZERO emphasis on creativity and innovation? Absolutely NOT. Re-read the comments of Morris Chang cited above:

Morris Chang says Taiwan lacks that talent, because the country’s education system stresses rote learning, resulting in “very little independent thinking and very little creativity.”

We need to be willing to re-imagine ourselves, our schools, and our communities in our dynamic global economic marketplace. The skills required for success in our flat, curved, or connected world (you pick the term you prefer) are VERY different than those we needed from factory workers in the industrial age. Our schools have to change, and those changes should be informed by this “big picture” understanding of how the innovation economy is and will continue to be pivotal for economic growth in the future.

What are you doing to inspire creativity in others today? 🙂

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