Post catch-up with market cultivation and product servicising: case of Taiwan’s transportation equipment industries

This paper sets out to examine a key issue: how a latecomer like Taiwan may develop itsindustry in a post catch-up manner. We make intensive inquiries into this issue via casestudies on two sectors in Taiwan, namely the bicycle industry and the electric vehicle (EV)industry. Our conceptual framework gives special account to fuzzy front-end at theindustrial level and how market cultivation and innovative business models come to play animportant role in shaping the innovation path for post catch-up. For leading players inTaiwan’s bicycle industry, a key issue they faced was how to transform themselves andlocal setting in Taiwan to become a leader in high-end bicycles to fend off escalatedinternational competition. In the emerging EV industry, the Taiwanese players try toovercome its structural weaknesses in the mainstream automotive industry to explore thepossibility of levelling the playing field with the forerunners in the advanced countries. Ourcase studies suggest that technological catch-up is not necessarily a prelude to post catch-up,depending on the nature of new innovation trajectory and entry modes of the emergingindustry. Our analyses also lend support to the importance of product servicising as a meansof post catch-up, especially from the perspective of market cultivation.