In This Review

Making Money: How Taiwanese Industrialists Embraced the Global Economy
Making Money: How Taiwanese Industrialists Embraced the Global Economy
By Gary G. Hamilton and Cheng-shu Kao
320 pp, Stanford University Press, 2017

One crucial element of Taiwan’s economic success, which began in the 1960s—and equally of its economic slowdown, which started in the 1990s—was the agility of its small and medium-sized “contract manufacturers,” firms that produce consumer products for U.S. brands such as Apple and Timberland but have no brand names of their own. By studying the Taiwanese entrepreneurs who built these firms, Hamilton and Kao shed light on the relationship between globalization and the Asian economic miracle. These entrepreneurs sprang out of the countryside in response to the needs of the growing U.S. consumer market. They drew on family and social networks for capital, labor, and parts suppliers and to help organize production. Whether making cell phones or footwear, the best of these firms have adjusted to changing market conditions, repeatedly innovating their product lines and production methods. This was a boon for Taiwan. But as the island developed, the costs of labor and parts went up, and many Taiwanese entrepreneurs moved their production to China. (Some firms are now leaving China for Southeast Asia and even, in some cases, the United States.) As these companies departed, the Taiwanese economy slowed. Nevertheless, Taiwanese-owned firms remain among the top contract manufacturers in the world.