This paper is a follow-up of Professor Simon Kuznets’ observations on the growth and structural shifts of the Taiwan economy during 1951-76, with the observation period extended to 1983/1984 and with the scope of investigation expanded from three major sectors to include manufacturing industries.
It is found that although the growth and structural shifts of the Taiwan economy had considerably slowed down from 1971-73 to 1981-83 compared with the preceding two decades, it seems that Kuznets’ conclusion concerning the long-term growth trend of the Taiwan economy remains unaffected. However, judged by the changes in the relative importance of the I sector and the manufacturing industries, the trends of their respective growth rates of gross product per worker and ratios of incremental gross product to gross capital formation, as well as the rates and characteristics of technical progress in the manufacturing industries during the period 1971-73 to 1981-83 or 1981-84, the Taiwan economy has undoubtedly been faced with a technological bottleneck leading to the slowing down of the desired structural changes. This finding may be of help in explaining the waning propensity to invest in recent years.
