Organisations, Innovation and Complexity: New Perspectives on the Knowledge Economy

University of Manchester
9-10th September 2004

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How Does Phalaenopsis Industry Form and Develop in Taiwan? Innovation Diffusion and Complexity Science Perspective

Mei-ya Wang & Se-Hwa Wu

meiya.wang@msa.hinet.net
sehwa@nccu.edu.tw

National Chengchi University
Taiwan

Abstract

Given that most papers approached industrial development from industry structure, national institutions, this paper discusses industrial development from industrial innovation diffusion perspective and argues that industrial development is a diffusion process of industrial innovation. If core and complementary technologies of an industry could be successfully diffused, then it could develop smoothly, otherwise, it would fail. Based on this viewpoint, we then draw on innovation diffusion literature and take a complexity science perspective to examine the development history of Taiwan’s Phalaenopsis (Moth Orchid) industry.

Innovation diffusion is a long-time, dynamic, nonlinear process and interpersonal network plays an important role during the process, which is exactly what complexity science concerned. Since lots of similarity exists between innovation diffusion phenomenon and complexity theory perspective, it inspires us to revisit the innovation diffusion process from complexity theory perspective. From complexity science perspective, thus we treat innovation diffusion as a self-organization process instead of intentional arrangement, discussing the dynamic process from agent level instead of system level. By using “self-organization process” metaphor as innovation diffusion process, we develop a conceptual framework to describe the dynamic process. The most important part of this model is the feedback loop. If positive feedback loop is possibly implied in the numbers of adoption and the richness of content of innovation, then self-organization will come out and the innovation can successfully diffuse. The inputs coming from each new adopter no matter “quantity” or “quality” is the energy that keeps the diffusion process going. In this conceptual framework, we examine the initial conditions (the network position of the innovator, the freedom within the system and of the system boundary), the rules governing the agents’ interaction (the possibility of reinvention in this innovation, diffusion incentives of the system), which determines the possibility of finding the agents with similar schema and then the possibility of adoption and re-diffusion.

In 1998, Phalaenopsis was one of thirty-eight “worldwide-first export product of Taiwan”. As a non-necessity agricultural product, orchid industry hasn’t attracted much attention from government until the last decade. However, Phalaenopsis has almost hundred- year history since it was introduced into Taiwan. Wit historically “noble” image and government leaders’ demonstration, many social nobles soon adopted the expensive hobby from the very beginning. In 1960s-1980s, orchid- lovers’ associations were founded in almost every city, and they host orchid monthly exhibition and contest. In each contest, the parental information is required to attach with the contested orchid, therefore anyone can easily know how to imitate a good hybrid. Through intensive monthly orchid contest, many new hybrids were cultivated by amateur and professional breeders, which earned great fortune and reputation for them. The high return further attracts more people. In 1988, Taiwan Sugar Corporation (the biggest government-owned agriculture enterprise) entered this industry and broke the stability of the complex system. New innovations were continuously developed and introduced into this field. In a sense, Tai-sugar Co. initiated the process of industrialization and further exploded the diffusion of Phalaenopsis. From then on, the production value of this industry grew over ten times. However, as openness of the institution decreased, the number of amateur hybrid breeders soon decreased, Phalaenopsis is now no more a expensive hobby but a standardized commodity after several decades.

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