Taiwan and the new globalization

Geopolitical conflicts, geo-economic rivalry, trade disruptions, energy insecurity, technological competition and the reorganization of global supply chains are making uncertainty a structural feature of the emerging economic order rather than a temporary disruption. Economic efficiency is increasingly being balanced against resilience, security and strategic flexibility.

Taiwan enters this era from a position of considerable strength. It has demonstrated an extraordinary capacity to absorb external shocks while maintaining economic dynamism. Its technological capabilities, particularly in semiconductors and advanced manufacturing, have made it an indispensable part of global production networks. Its companies occupy critical positions in some of the world’s most sophisticated technology ecosystems.

However, the more central Taiwan becomes to global technology supply chains, the more exposed it becomes to geopolitical tensions, disruptions in trade and changes in the architecture of globalization. Taiwan should remain deeply integrated with the world economy. The question is how that integration can be made more resilient, diversified and adaptable.

The old model of globalization was driven predominantly by efficiency. Today, supply chains are increasingly being designed not only for cost, but also for resilience, redundancy, trusted relationships and strategic security.

For Taiwan’s next phase of economic growth, the first priority should be infrastructure. Physical infrastructure remains fundamental, but for a technology-intensive economy, infrastructure increasingly means reliable energy, digital connectivity, data networks, logistics and communications systems. Energy security would become even more important as semiconductor manufacturing, artificial intelligence and other energy-intensive industries expand.

Second, Taiwan needs to broaden its base of private investment. Its successful technology companies are a tremendous national asset, but the next phase of growth should create greater opportunities for smaller enterprises, start-ups, services and companies operating at the intersection of manufacturing and technology.

Third, Taiwan should continue moving beyond assembly and into higher-value manufacturing and services. Its semiconductor leadership provides an exceptional foundation, but the opportunities extend into chip design, advanced materials, artificial intelligence, robotics, biotechnology, precision engineering and other emerging technologies. The objective should not simply be to produce more. It should be to capture a larger share of the value created by global technological transformation.

Fourth, export diversification would become increasingly important. Taiwan’s integration into global supply chains is a source of strength, but concentration — whether in markets, products or technologies — can create vulnerabilities. Diversification means developing additional markets and capabilities so that disruption in any one part of the system does not become a systemic shock.

Strategic autonomy should not be confused with self-sufficiency. No modern economy can, or should, attempt to produce everything domestically. Rather, Taiwan should identify areas where excessive dependence could create strategic vulnerability and build alternative sources, technologies, inventories and partnerships.

This leads to perhaps the most important priority: building a network of trusted economic partnerships.

The future is unlikely to be characterized by complete decoupling or a return to the hyper-globalization. More likely, there would be overlapping networks of countries connected through trade, investment, technology, standards and supply chains, and increasingly through trust.

The emerging environment rewards countries that have multiple economic relationships and sufficient strategic flexibility to navigate between them. Strategic autonomy does not mean isolation, diversification does not mean disengagement and multi-alignment does not mean neutrality. They can all be instruments for remaining globally connected while reducing excessive dependence on any single relationship.

India provides an example of this broader trend. New Delhi has sought to deepen its economic relationship with the US while maintaining significant relationships with other major economies, including Russia and Iran. The underlying principle is less about choosing one camp than preserving strategic space in an increasingly fragmented international environment.

Taiwan’s partnerships need not be defined exclusively through geopolitics. There is considerable scope for stronger economic engagement with India, particularly in semiconductors, electronics, advanced manufacturing, digital technologies, skills, research and development and supply-chain diversification.

As businesses seek to make their supply chains more resilient, the economic logic for connecting India’s manufacturing and market capabilities with Taiwan’s technological strengths is becoming increasingly compelling.

Taiwan has an opportunity to position itself not merely as a critical supplier to the global technology economy, but as a hub within a broader network of trusted economic relationships across Asia and beyond.

Resilience is often understood as the ability to withstand a shock, but in a world where shocks are becoming more frequent, resilience alone is insufficient.

Taiwan needs the ability to redirect investment, diversify markets, develop new technologies, build alternative supply chains and forge new economic partnerships while retaining the strengths that made it successful in the first place.

The objective should not be to eliminate uncertainty. It should be to build an economic architecture capable of thriving in uncertainty.

Shishir Priyadarshi is president of the Chintan Research Foundation and a former director of the WTO.