FIGURE 16 Transformation of Taiwan’s economy.

sector accounted for about 46 percent of the economy from the 1950s through the 1970s, when a steady rise began that brought its share to 67.8 percent by 2004. Agriculture’s contribution had moved in the opposite direction, dwindling from about 32 percent in 1951 to less than 2 percent currently. Manufacturing, meanwhile, displayed two contrasting phases: Its slice of the economy climbed from 21 percent in 1951 to near 40 percent by the end of the 1970s, only to fall back to 30.4 percent by 2004 as it was overshadowed by the continuously growing service sector.

Transformation of Taiwan’s Economy

If technology-based manufacturing was the engine driving Taiwan’s economic growth over the previous half-century, the country expects services to act as a “twin engine” in the future. Similarly, while labor-intensive industry characterized industrial growth in the late 1940s through the 1950s and 1960s, followed by capital-intensive industry the 1970s and 1980s and technology-intensive industry the 1980s and early 1990s, the knowledge-intensive industry that came onto the scene in the mid-1990s is expected to expand further in the future. Describing the economic evolution in Taiwan, Dr. Chu said that the food and textile industries emerged in the 1950s and 1960s, followed by bicycles, motorcycles and selected basic industries in the 1970s and 1980s. It was in the late 1970s that Taiwan’s semiconductor and other information-technology industries started to take root. Optoelectronics made its appearance in Taiwan in the early 1990s.

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