Global Experience in Policy and Program Development
Edited by Sarfraz A. Mian
Chapter 13: Taiwan’s Industrial Innovation Policy and Programs to Support Research and Technology Based Entrepreneurship
Jiann-Chyuan Wang and Daw Ma INTRODUCTION During the past ten years, Taiwan has been successfully transformed from an economy dominated by labor-intensive industries to an economy dominated by capital- and skill-intensive technology industries (Lee and Wang, 2003). This is evidenced by the fact that the share of exports in high-tech industries accounts for 42.30 percent in 2006, second only to Singapore and Ireland. Moreover, Taiwan’s share of R&D/GDP was 2.62 percent in 2007, comparable to most developed countries. And in terms of production value, Taiwan is the second largest country in the computer industry and the fourth largest country in the semiconductor industry. In 2008, Taiwan was ranked number two worldwide in IT industrial competitiveness by the Economist Intelligence Unit (EIU) (Commercial Times, 2008). Bearing in mind that Taiwan’s economy is largely based on small and medium-sized enterprises (SMEs), and given the constraints that this situation imposes in terms of manpower, capital and technology resources, how has Taiwan succeeded in becoming such an important player in the global information and communications technology (ICT) industry? Previous research in this area has emphasized the role played by government intervention (while maintaining a market-friendly business environment) to support R&D and innovation in industry. In recent years, Canada, Israel, Singapore and South Korea have all redesigned their innovation policies to provide a greater role for direct government intervention to stimulate R&D and innovation (National Science Council, 2008; Trajtenberg, 2001; Industry Department of Canada, 2002; Levebvre et al., 2001; Wang and Lan,...
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