Taiwan transforms from ‘Ghost Island’ to innovation hub

Nine years ago, when I visited Taiwan, I repeatedly heard the eerie nickname “Ghost Island” used by Taiwanese youth to criticize their country. It reminded me of South Korean youth at the time referring to their homeland as “Hell Joseon” in protest of societal conditions. The nickname reflected real challenges. Taiwan’s economic growth had slowed to around 1% the previous year, unemployment hovered near 3%, similar to South Korea, and political tensions with China created instability reminiscent of South Korea’s concerns over North Korea.

Despite these similarities, Taiwan has recently taken a different path from South Korea. Political risks may have increased, but its economy is booming. This year, Taiwan’s per capita GDP is expected to surpass South Korea’s at $38,066. Last year, Taiwan’s stock market capitalization reached $2.332 trillion, about 153 percent of South Korea’s $1.523 trillion.

Semiconductors are at the core of Taiwan’s economic success, making up roughly 40 percent of its exports. The industry also supports Taiwan’s security amid pressure from China. Philip Gordon, a Brookings Institution fellow and former national security adviser to U.S. Vice President Kamala Harris, wrote in a Sept. 22 Foreign Affairs article that no other country can replace the advanced chips produced by Taiwan’s leading companies and predicted that the U.S. will continue to pay close attention to Taiwan’s security.

Taiwan’s growth in semiconductors is widely attributed to its strong engineering education. In the past, students who studied at leading U.S. engineering schools returned home to lead the industry, giving rise to the joke that “MIT is Made in Taiwan.”

Over the past decade, Taiwan has focused on cultivating domestic engineering talent and expanding its training system. Four years ago, anticipating a future shortage of engineers, the government implemented a long-term strategy. In 2021, it enacted the Innovation Act for Industry-Academia Collaboration and Talent Development in Key National Sectors, under which nine universities established semiconductor research institutes. Undergraduate programs in critical fields such as semiconductors and artificial intelligence grew by 10 percent, and graduate programs by 15 percent. Engineering schools, which had previously emphasized sending students abroad, now actively recruit foreign talent with government support. Taiwan is transforming from the so-called “Ghost Island” into an “Island of Opportunity.”

Engineering education is evolving in Taiwan. The country’s top universities are fostering entrepreneurship. National Taiwan University, one of Taiwan’s leading schools, established a Design School a decade ago with the goal of creating a “Taiwanese Silicon Valley.” Students are trained in startups, and professors often serve as company executives. Graduates join major semiconductor firms but also launch small enterprises, bringing new energy to Taiwan’s previously stagnant economy.

South Korea has seen a rise in industry-linked engineering programs and AI-focused curricula, but questions remain about their depth. Like Taiwan, South Korea could strengthen industry-academia collaboration, provide long-term government support, and create opportunities for engineers to start businesses. Modernizing engineering education and fostering entrepreneurship could also help address broader societal challenges caused by the country’s heavy focus on medical education.