Abstract
This thesis explores the mechanism of local industry transformation, and the significance of the domestic market in industry transformation. By examining the process of the transformation in Sanyi’s wood carving industry, the thesis finds that the market demand for the quality and variety of the woodcarving made it possible for the industry to upgrade its skill and creativity to be more art-oriented. The accessible market, skillful wood carving masters and the support from Sanyi Wood Sculpture Museum together facilitated the transformation in Sanyi’s wood carving industry. In addition, this thesis refers to the theories of global commodity chains, industrial district and embeddedness. It reveals the transformation of producers from manufacturing laborers to craftsmen, and eventually to artists with the transformation of the industry. The industrial district, meanwhile, experienced the process of dis-embeddedness and re-embeddedness. The existence of wood carving industry not only reserves the characteristics of the local culture but also avoids the homogenization crisis of the cultural and creative industry in Taiwan.