Shelley Rigger

Taiwan's traditional manufacturing.

So all those Barbies just decamped to the mainland and they set up factories.

A lot of them using the same equipment, they send the machinery and they send the managers all over to the mainland and they start making the same thing at a tiny fraction of the cost.

We talk about Walmart and the Walmartization of the U.S.

economy a lot.

And we think about, you know, when China became the factory to the world and, you know, all of a sudden Walmart can sell you all this stuff so super cheap.

These are Taiwanese companies in very large part.

Taiwanese companies, they were selling you the same thing yesterday, right?

and it was made in Taiwan and their cost of production was, you know, 10.

Now they're making it in mainland China.

It's the same thing made on the same machine with all the same techniques, but now it's made in China and the cost is two.

And, you know, something that really scared people

in the 1990s was, what do we do now, right?

Because if you outsource all of your manufacturing, what's left for your domestic economy?

Where are people going to find jobs?

And the most incredible part of Taiwan's story is that after the

low-value, low-tech manufacturing shifted off to China.

There's this kind of empty bucket, and the state, partnering again with private entrepreneurs and scientists, filled the bucket.

And what they filled it with was high-tech manufacturing.

One of the really important components of Taiwan's economic policy has always been a certain amount of state direction, but also a lot of state support for research and development.