Reorganizing the R&D System to Promote an Innovation-Based ...

Reorganizing the R&D System to Promote an Innovation-Based
Economy
Feng-Yuan Chang ∗
Department of Industrial Technology (DOIT)
Ministry of Economic Affairs (MOEA)
Taiwan, Republic of China (R.O.C)
No. 15, Fu-Chou Street, Taipei, 100, Taiwan
Telephone : 02-2321-2200-143
Fax : 02-2351-7649
Email : fychang@moea.gov.tw
(This article is accepted by the first international symposium on knowledge and
intellectual property held at Taichung on Oct 22, 2004)
Abstract
If innovation stands for the process that could realize ideas into profits, Taiwan
performs better as realizing ideas of technology development into industry
development than pervading innovations derived from the science research into ideas
of the technology development. This phenomenon could be observed from two
indexes, namely, the science linkage index analyzed from Taiwan’s overall patents
granted in the U.S. and the innovation index surveyed by the World Economic Forum
in 2003. The science linkage index of Taiwan is relatively low to those of other
industrialized countries, but the innovation index of Taiwan ranks No.2 in the world in
2003. Chief factors of such consequences could be concluded in some mechanism
problems of science-technology-industry innovation system of Taiwan.
In Taiwan, science research is mainly conducted by universities which perform
well in paper publishing and talent cultivation, but induce little impact on the
technology development. On the contrary, technology research mainly focused on
manufacturing process improvement is done by non-profit research institutes of
industrial technology and enterprises. However, the science research results are hardly
applied to the technology development. Therefore, it results in the weak linkage of
science and technology. On the other hand, there are many measures taken by
Taiwan’s government to facilitate the development from technology to industry. It
consequently results in the superior innovation performance of industry.
This paper addresses the current status and prospects of Taiwan’s industry technology
innovation system, such as how it performs, what malfunctions are, how the
∗ The author got his Ph.D. from the Department of Chemical Engineering, National Taiwan University.
He was the Fulbright Visiting Fellow of Princeton University in 2002. Now he is the specialist of DOIT,
MOEA.
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government takes actions to improve its efficiency with the partnership of private
sector.
Keywords: R&D, Innovation-based Economy, Industrial Technology
1. Introduction
If innovation stands for the process that could realize ideas into profits, Taiwan
performs better as realizing ideas of technology development (D) into industry
development than pervading innovations derived from the science research (R) into
ideas of the technology development. This phenomenon could be observed from two
indexes, namely, the science linkage index analyzed from Taiwan’s overall patents
granted in the U.S. and the innovation index surveyed by the World Economic Forum
(WEF) in 2003. The science linkage index of Taiwan is relatively low to those of
other industrialized countries, but the innovation index of Taiwan ranks No.2 in the
world. Chief factors of such consequences could be concluded in some mechanism
problems for interactions of science research and technology development.
In Taiwan, science research is mainly conducted by universities which perform
well in paper publishing and talent cultivation, but induce little impact on the
technology development. On the contrary, technology research mainly focused on
manufacturing process improvement is done by non-profit research institutes of
industrial technology as well as enterprises. However, the science research results are
hardly applied to the technology development. Therefore, it results in the weak
linkage of science research and technology development. To tighten the linkage, there
are many measures taken by Taiwan’s government to facilitate the development from
technology to industry so as to better innovation performance of industry.
This paper addresses the current status and prospects of Taiwan’s industry
technology R&D system, such as how it performs, what malfunctions are, how the
government takes actions to improve its efficiency.
2. Taiwan is a premier manufacturing center in the world
Around 1970, Taiwan’s economic development was based on labor-intensive
light industries. Textiles, Plastics and Appliances soared and played key roles in the
world’s markets. Taiwan’s balance of trade turned from a deficit to a surplus.
During that time, Taiwan’s economic development was fiercely affected by the
oil crisis because local industrial development had the strong dependency with oil
supply. In order to transform structure of local industry from labor-intense to
technology-intense, which was highly decisive to human brains and less correlated to
natural resources, Taiwan’s government decided to set up the first industrial
technology research institute, ITRI, in 1973. Missions of ITRI are assigned to develop
industrial technologies and transfer them to industry, which is composed mainly of
small and medium sized enterprises.
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ITRI transferred high technologies from abroad to Taiwan, which were suitable
to develop locally, and continued to add value. Combining talent and capital
investment, new company spin-offs from ITRI blossomed into new industries. For
instance, United Manufacturing Company (UMC) was spun off from ITRI in 1980.
UMC became the 2nd largest IC foundry in the world in terms of production.
Taiwan Semiconductor Manufacturing Company (TSMC) was spun off from ITRI in
1986. TSMC also became the largest IC foundry company in the world in terms of
production as well.
Following the spin-offs, IC foundry, IC packaging, IC design etc., completely
new industries, developed one after another. The number of companies for each
industry is illustrated in Table 1 in 2002. Meanwhile, Personal Computers,
Optoelectronics, Telecom and so on all followed the same development path.
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Table 1 Number of companies for IC industry in Taiwan in 2002
Design Mask Foundry Package Test Chemicals Lead
Frame
Number of
Companies
180
(+40)
4 15
(-1)
45
(-3)
36
(-1)
19
(-1)
4
Source: Project of Industrial Technology Intelligence Services (ITIS), DOIT, MOEA,
2003, (+/-): increasing/decreasing number of companies in comparison with those of
2001.
In step with ITRI’s growth, Taiwan has become a premier world manufacturing
center over the last 30 years. Taiwan was the 4th largest information technology (IT)
hardware production country in the world in 2003, which was after the U.S., China
and Japan. Furthermore, Taiwan’s companies made up 72.9% of China’s IT
production. Taiwan was also the 4th largest semi-conductor production country in the
world in 2003, which was after the U.S., Japan and South Korea. In addition, Taiwan
was the 2nd largest thin film transister - liquid crystal display (TFT-LCD) production
country in the world in 2003, which was after South Korea and outpaced Japan. The
market penetration of the above three industries is shown in Table 2. Many of
Taiwan’s products were Number 1 in world market share in 2003 as demonstrated in
Table 3.
Table 2 The market penetration of Taiwan’s high-tech industries in 2003
(percentage of market penetration)
Rank 1st Rank 2nd Rank 3 rd Rank 4 th
IT hardware
production
US(28.2%) China(22.2%) Japan(10.1%) Taiwan(5.4%)
Semi-conductor
Production
TFT-LCD
Production
Source: ITIS, DOIT, MOEA, 2004
US(51%) Japan(25.6%) S. Korea(8%) Taiwan(7.8%)
S. Korea(46.3%) Taiwan(34.5%) Japan(19.2%) -
With the establishment of manufacturing capabilities, Taiwan gradually builds up
prototype of science and technology development infrastructure. According to “The
World Competitiveness Yearbook 2004” issued by the International Institute for
Management Development (IMD), among nations with a population over 20 million,
Taiwan became No. 5 in the index of science infrastructure, which was after USA,
Japan, Germany and France. In addition, Taiwan ranked No. 6 in the index of
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technology infrastructure, which was after USA, Canada, Australia, Germany and
Malaysia. Furthermore, according to “2003 The Global Competitiveness Report”
issued by WEF, Taiwan became No. 3 in technology index, which was after the U.S.
and Finland. Taiwan ranked No. 2 in innovation sub-index, which was after USA.
Table 3 World No. 1 products in terms of market shares/volumes of Taiwan in 2003
IC
Market shares/Production World Penetration
Foundry US$8,349M 65.8%
Mask ROM US$271M 89.7%
IC Packaging US$2,650M 27.9%
Computer & Peripheral Devices
CD-R Disk 5923.8M Pcs 64%
CD-RW Disk 228.23M Pcs 84%
DVD-R Disk 517.9M Pcs 75%
DVD-RW Disk 73.02M Pcs 62%
Networking Products
ADSL Modem 14M Sets 59%
Wireless LAN 39.4M Sets 78%
Analog Modem 9,018K Sets 25%
SOHO Router 6,491K Sets 35%
Other
ABS Resin 1530K M.T. 24.3%
Source: ITIS, DOIT, MOEA, 2004, unit: B:Billion, M:Million, K:Thousand,
M.T.:Metric Ton, Pcs : pieces
3. Major challenges for the innovation-based economy
It’s noted that Taiwan’s industry is superior to product adjustment and process
improvement. It thus results that Taiwan’s economy falls into the “incremental
innovation-based economy”. In order to transform such an economy into “radical
innovation-based economy” so as to get new momentum to push for economic growth,
Taiwan’s 2003 Science and Technology Meeting of the Executive Yuan concluded that
implementation of “innovation-based economy” was a very desirable next step for
Taiwan to take. Following this policy, the industry technology R&D would evolve
from a system based on “incremental innovation” to the one based on “radical
innovation”.
However, in a bid to promote the development of “innovation-based economy”
demands a comprehensive system. Major innovation activities in Taiwan’s
manufacturing industry (electronics or non-electronics) fell within categories such as
products, technology and manufacturing processes. Innovations in organization,
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management and marketing recorded only a small portion as observed in Table 4 and
Table 5.
Table 4 Categories of innovations for manufacturing industry of Taiwan in 2003
Manufacturing Products Technology Manufacturing Organizational Marketing
Industry
Process Management
Electronics 49% 33% 15% 0% 3%
Non-electronics 34% 30% 17% 9% 10%
Source: Conference materials of 2003 Science and Technology Meeting of the
Executive Yuan, R.O.C, investigated by Industrial Economics and Knowledge Center
(IEK), ITRI
Table 5 Categories of Innovations for Service Industry of Taiwan in 2003
Contents
of Services
Procedures of
Service Providing
Organizational Marketing Customizati
Management
on
Service 33% 22% 15% 16% 13%
Industry
Source: Conference materials of 2003 Science and Technology Meeting of the
Executive Yuan, R.O.C, investigated by IEK, ITRI.
It should be noted that inputs of science and technology can be a major driving
force for the innovation-based economy, but an efficient innovation network is more
crucial for capitalizing on the effort made. However, current systems for science
research and technology development of Taiwan are undermined by such problems as
unexploited linkages between industry and universities. Therefore, there is a need to
strengthen the structural networking interfaces in the innovation networks, especially
interactions between industry and universities.
4. Current status of interactions between industry and universities
4.1 In retrospect
Taiwan has been a “fast follower” in economic development. A stylized division
of labor within the current innovation system could be categorized as follows.
Universities carry out academic research and training of talent. Industrial technology
research institutes conduct technology introduction, value addition, and technology
diffusion. Industry is doing technology absorption and product manufacturing. The
development of the economy is effectively supported through efficient interactions
among three groups.
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4.2 Current developments of universities
Universities and colleges in Taiwan have grown substantially in number from
123 in 1991 to 154 in 2002. As a result of the rapid expansion in the high education
system, nearly 70% of Ph.D. graduates are employed on campus, providing an
abundant supply of advanced R&D personnel.
Along with the growth of advanced R&D talents, government funded R&D
expenditures at universities and colleges have grown significantly since 2002 as well.
Ratio of universities’ R&D expenditures funded by government hiked to 84.75% in
2001, whereas funded by industry reduced to 3.23%, relatively low compared with
those of the U.S., UK and South Korea as compared in Table 7.
Table 7 University R&D budget from private sector Unit:%
1991 1997 1998 1999 2000 2001
USA 5.30 6.00 6.10 6.20 6.00 5.70
Canada 7.00 9.80 9.40 9.10 9.60 9.60
Germany 7.00 9.70 10.50 11.30 11.60 11.30
UK 7.80 7.10 7.30 7.30 7.10 6.20
Japan 2.40 2.40 2.30 2.30 2.50 2.30
Finland 3.60 5.20 4.50 4.70 5.60 6.70
Sweden 5.20 4.80 - 3.90 - 5.50
South Korea - 14.90 13.10 10.80 15.90 14.30
Taiwan-Private Sector - - 3.03 4.75 4.13 3.23
Taiwan-Public Sector - - 88.33 85.80 85.10 84.75
Source: Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2003
As regards R&D performance of universities indicated in terms of paper
publications in 2001, Taiwan ranked the 18th in the world in the number of
published papers, accounting for 1.1% of the world’s total paper publications as
shown in Table 8. For the number of papers published in the database of Science
Citation Index(SCI), Taiwan ranked 17th with 10,635 papers published in 2001. The
average frequency for Taiwan’s papers being cited is 2.71 over the 1995-2001 period,
lower than those of Japan and Singapore but higher than those of South Korea and
China. In 2001, 55.5% of Taiwan’s papers published in databases of SCI, Social
Science Index (SCI) and Engineering Index (EI) were contributed by National Taiwan
University (NTU), National Tsing Hwa University (NTHU), National Chiao Tung
University, National Cheng Kung University (NCKU), and National Central
University (NCU).
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Table 8 World ranking and share of academic papers out of selected countries
unit:%
1996 1997 1998 1999 2000 2001
Ranking Share Ranking Share Ranking Share Ranking Share Ranking Share Ranking Share
USA 1 31.3 1 30.5 1 29.3 1 28.6 1 28.0 1 27.9
UK 2 8.5 2 8.1 2 8.1 2 8.1 2 8.2 2 7.8
Japan 3 7.5 3 7.5 3 7.7 3 7.8 3 7.7 3 7.7
Germany 4 6.8 4 7.0 4 7.3 4 7.1 4 7.1 4 7.1
France 5 5.3 5 5.3 5 5.4 5 5.3 5 5.2 5 5.1
China 14 1.6 12 1.9 12 2.1 9 2.5 8 3.1 8 3.4
Netherlands 10 2.2 11 2.2 11 2.2 12 2.1 12 2.1 12 2.1
S. Korea 20 0.9 18 1.0 16 1.2 16 1.3 16 1.4 15 1.6
Taiwan 19 0.9 19 0.9 19 1.0 20 1.0 20 1.0 18 1.1
Israel 17 1.1 16 1.1 18 1.1 18 1.0 19 1.0 21 1.0
Singapore 40 0.2 37 0.3 36 0.3 36 0.3 34 0.4 34 0.4
Source : Survey and Analysis of Innovative Competitiveness of Knowledge Economics Project, DOIT,
MOEA, 2003
In respect of patents secured by the higher education institutes, the number of
patents accumulated by universities and colleges with 10 patents and above is 1,936
through September, 2003. The top 4 universities accounted for more than 60% of the
total patent grants to academia as shown in Table 9.
Although academic patents represent better scientific linkages to industry,
Taiwan’s academic patenting is relatively less than paper publications, causing
concerns about the present weak linkage between science research and industrial
technology.
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Table 9 Patents granted to selected higher education institutes (through September 2003)
With the name of
With the name of Total
National Science Council
School
University Taiwan USA Japan others Total Taiwan USA Mixed %
Total 1,098 582 88 48 1,816 108 12 1,936 100.00
National Cheng 193 113 9 1 316 25 4 345 17.82
Kung Univ.
National Taiwan 186 113 12 8 319 10 1 330 17.05
Univ
National Chiao 168 79 10 10 267 13 0 280 14.46
Tung Univ.
National Tsing 126 76 21 19 242 19 7 268 13.84
Hwa Univ.
Source : Survey and Analysis of Innovative Competitiveness of Knowledge Economics Project, DOIT,
MOEA, 2003
4.3 Current developments of industry
As regards current developments of industry, thanks to a vertically-disintegrated
but horizontally well-integrated and well-organized production system, Taiwan is able
to play a key role in the global production network. The manufacturing sector is
internationally competitive with capabilities regarding to original design manufacture
(ODM) and even integrated device manufacturer (IDM), such as capabilities in the
design and manufacture of parts and components for automobiles, yacht and motor
boats, the textile and footwear industry, software design (e.g. anti-virus software)
and so on. With capabilities of innovation, collaborative design, synchronous
engineering, quality management, and cost control, the high-tech industry in Taiwan
has enjoyed competitive advantages in the global supply chain. For example, the
speed of order processing has been improved to the 982 standard, 98% shipment
delivered within 2 days of receiving overseas orders.
Recalled that industrial technology research institutes and industry have worked
closely together, industrial technology development and industry development are
highly correlated with each other. Taiwan’s innovation thus comes mainly from the
partnerships of two parties. This result could be observed from patenting competence
of Taiwan’s industry.
The annual number of overall patents and utility patents granted in the U.S. to
Taiwan has ranked 4th since 2000, as demonstrated in Table10 and Table 11. The
annual overall patent productivity, the ratio of number of patents divided by million of
people, and utility patent productivity granted in the U.S. has ranked 2 nd and 3rd
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espectively since 2000, as shown in Table 12 and Table 13.
Most of the innovative R&D investments for important and newly-emerging
industrial technologies in Taiwan were related to the manufacturing process of
semi-conductors. From 1999 to 2003, the number of semi-conductor device
technology related patents granted in the U.S. ranked 3 rd , as demonstrated in Table 14.
Qualities of those patents are valued by a higher frequency of citations of Taiwanese
patents in the U.S. as shown in Table 15.
Table 10 Number of Taiwan’s overall patents granted in the U.S. in 2003
Rank Number Percentage(%)
USA 1 96,938 52.71
Japan 2 37,276 19.92
Germany 3 12,141 6.49
Taiwan 4 6,679 3.57
South Korea 5 4,131 2.21
Source : Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2004
Table 11 Number of Taiwan’s utility patents granted in the U.S. in 2003
Rank Number Percentage(%)
USA 1 87,938 52.00
Japan 2 35,543 21.02
Germany 3 11,444 6.77
Taiwan 4 5,300 3.13
South Korea 5 3,943 2.33
Source : Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2004
Table 12 Taiwan’s overall patent productivity in the U.S. in 2003
Rank
Number/million people
USA 1 339
Taiwan 2 297
Japan 3 292
South Korea 14 87
Source : Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2004
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Table 13 Taiwan’s utility patent productivity in the U.S. in 2003
Rank
Number/million people
USA 1 302
Japan 2 279
Taiwan 3 236
South Korea 12 83
Source : Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2004
Table 14 1999-2003 Number of semi-conductor device patents granted in the U.S.
USA Japan Taiwan South Korea
Rank 1 2 3 4
Number 19,123 11,989 5,281 3,040
Source : Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2004
Table 15 Citations of Taiwan’s of semi-conductor manufacturing process patents
granted in the U.S.(unit:%)
Country 1991 1995 1996 1997 1998 1999 2000 2001 1991-2001
USA 40.57 49.35 44.42 45.02 41.31 41.49 42.95 44.58 43.72
Taiwan 1.89 11.30 14.36 14.57 16.02 21.94 27.52 26.72 22.27
Japan 47.17 26.32 26.49 25.88 26.59 22.72 18.54 17.22 21.29
S. Korea 0.00 6.99 9.41 8.94 11.69 9.04 6.89 6.97 7.93
Source : Survey and Analysis of Innovative Competitiveness of Knowledge Economics Project, DOIT,
MOEA, 2003
In respect of current R&D strength of industry measured by the linkage of
industrial technology and science, the average number of SCI papers cited in each
utility patent of Taiwan granted in the U.S. was 0.18, far behind the average of 1.97 in
2001, as demonstrated in Table 16. In 2002 and 2003, the average number of
academic literature citations in each Taiwan patent granted in the U.S. was 0.21 and
0.24, respectively, as illustrated in Table 17.
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Table 16 The science linkage index of Taiwan’s utility patents granted in the U.S. in
2000
World Average USA Japan South Korea Taiwan
Index 1.97 2.83 0.51 0.42 0.18
Source : Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2004
Table 17 The science linkage index of Taiwan’s overall patents granted in the U.S. in
2002/2003
USA Japan South Korea Taiwan
2002 Index 4.46 0.99 0.76 0.21
2003 Index 4.62 1.08 0.86 0.24
Source : Survey and Analysis of Innovative Competitiveness of Knowledge
Economics Project, DOIT, MOEA, 2004
Although Taiwanese industry is good at producing patents, most of them are
related to manufacturing processes, with only a few of them having originality.
Taiwan’s science linkage index position is relatively low compared to other
industrialized nations. There is a need to develop science-based patents and
science-based industries in Taiwan.
In short, research universities with abundant advanced R&D personnel and
sufficient funding focus mostly on paper publication. Industry presently concentrates
on patenting innovative manufacturing process. This constitutes a potential gap of
science research and technology development.
5. Lessons and performance from the promotion of the innovative industrial
technology R&D
In order to get rid of playing the role of “fast follower”, DOIT of MOEA made up
its mind to kick off the innovative industrial technology R&D commencing in 1998,
by means of allocating 20% of the total industrial technology R&D budget of
DOIT-MOEA to ITRI.
The properties of the innovative industrial technology are:
1. The technology is yet commercialized world-widely. The technology will
further induce investments from both private sector and public sector in future,
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coming up the industry expectation for yielding long-term industry
development impact.
2. The technology either has the potential to become the leading technology of
Taiwan or could make the competitiveness of Taiwan’s industry go at a good
pace.
3. The technology could result in new products and new industries eventually.
In general, the program aims at establishing a favorable environment for
innovative industrial technology R&D for ITRI by not implementing new measures
but through “deregulation” and “institutional reform”.
Deregulation reflects upon features of this program including independent project
management systems, budgetary autonomy, a review mechanism based on full
communication, and project implementation flexibility. Details could be further
referred to “The Innovative Industrial Technology R&D Project Self-Evaluation
Report” compiled by ITRI in 2004.
Institutional reform responds to a culture for innovative industrial technology
research that was established gradually at ITRI. Cultural and environmental changes
for industrial technology R&D program at ITRI could be signaled as follows:
1.Outstanding experts are recruited to conduct the R&D program:
An adequate environment and mechanisms have been set up to bring excellent
talents to join the innovative industrial technology R&D programs at ITRI. 10
experts have been invited from overseas and Taiwan into ITRI to lead projects.
The number of researchers with Ph.D. degree involved in this program is 1.8
times to that of the other programs sponsored by MOEA, as compared in Table
18.
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Table 18 Manpower employed by ITRI’s innovative industrial technology
R&D program
Ph.D. Master Bachelor Others Total
2001 Man-year 151.9 257.7 48.4 35.8 493.8
% 30.8% 52.2% 9.8% 7.2% 100%
2002 Man-year 178.0 381.9 53.0 54.5 667.4
% 26.7% 57.2% 7.9% 8.2% 100%
2003 Man-year 179.0 408.8 50.0 49.7 687.5
% 26.0% 59.5% 7.3% 7.2% 100%
Total Man-year 508.9 1048.4 151.4 140 1,848.7
% 27.5% 56.7% 8.2% 7.5% 100%
The other MOEA supported project employed manpower
2001 % 16.0% 49.3% 18.1% 16.5% 2,436
2002 % 15.4% 50.2% 16.2% 18.3% 2,730
2001 % 15.4% 58.3% 14.2% 12.1% 2,615
Source: The Innovative Industrial Technology R&D Project Self-Evaluation
Report, ITRI, 2004
2.Leveraging external resources:
Collaborative research with local universities of ITRI was strengthened
through the establishments of the joint R&D centers as shown in Table 19.
Several overseas laboratories have been set up with the participation of foreign
universities. Liaison offices have been placed in the U.S., west Europe, Japan
and Russia to introduce technologies and experts into Taiwan. Industrial
technology R&D alliances have been established with local industries.
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Table 19 Joint research centers with universities set up by ITRI
Field
Center
Communication NTHU-ITRI Joint Research Center
Micro Electric-Mechanical NCKU-ITRI MEMS and Nano-Technology
Systems (MEMS) and Research Center
Nano-Technology NTHU-ITRI Joint Research Center
Optoelectronics
National Sun Yat-sen University(NSYSU)-ITRI
Opto-Electronics R&D Center
Material
NTU-ITRI Nano-Technology Research Center
Environmental Protection NCU-ITRI Joint Research Center
and Catalyst
Biomedical Technology NTU-ITRI Biomedical Technology Research
Center
Source: The Innovative Industrial Technology R&D Project Self-Evaluation
Report, ITRI, 2004
3. Securing strategic intellectual properties:
Several world-leading technologies have been developed and strategic
intellectual properties have been secured. Through 2003, 805 patents are
applied and 201 patents are secured as shown in Table 20. For every 100
million New Taiwan Dollar ($NTD) research budget, the program generated
average 18.3 patents more than the other MOEA supported R&D projects’
average 10.3 patents created.
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Table 20 Patents secured by ITRI’s innovative industrial technology R&D
program
Category 2001 2002 2003 Total
Domestic 95 124 187 406
Applied Cases Overseas 81 129 189 399
Total 176 523 376 805
Growth Rate 43.8% 48.6%
Category 2001 2002 2003 Total
Domestic 26 39 71 136
Granted Cases Overseas 10 31 24 65
Total 36 70 95 201
Growth Rate 94.4% 35.7%
Source: The Innovative Industrial Technology R&D Project Self-Evaluation
Report, ITRI, 2004
In regard of paper yielding, 1,012 papers are generated as yet. 338 papers are
published in academic journals and 674 papers are presented in conferences,
as demonstrated in Table 21. For every 100 million $NTD research budget, the
program generated average 6.9 papers more than the other MOEA supported
R&D projects’ average 2.7 papers created.
Table 21 Papers published by ITRI’s innovative industrial technology R&D
program
Category 2001 2002 2003 Total
Referred Domestic 50 82.0% 110 88.7% 101 66.0% 261 77.2%
Journals Overseas 11 18.0% 14 11.3% 52 34.0% 77 22.8%
Cases Subtotal 61 124 153 338
Conference
Cases
Total
Domestic 53 48.2% 167 67.6% 206 65.0% 426 63.2%
Overseas 57 51.8% 80 32.4% 111 35.0% 248 36.8%
Subtotal 110 247 317 674
Domestic 103 60.2% 277 74.7% 307 65.3% 687 67.9%
Overseas 68 39.8% 94 25.3% 163 34.7% 325 32.1%
Subtotal 171 371 470 1,012
Source: The Innovative Industrial Technology Self-Evaluation Report, ITRI,
2004
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6. Develop an innovation-based economy by reorganizing the industrial
technology R&D system
To develop an innovation-based economy, the first step is to adjust the institutions
and operational mechanisms of existing industrial technology R&D system, consisting
of universities, industrial technology research institutes, industry and the government.
6.1 Industry
It’s important to note that the process of innovation starting with an idea for a new
technology, product and service may originate in a variety of areas including R&D,
manufacturing, marketing, sales and in organizational infrastructure and management.
The process will be complete only when there is beneficial use by customers. This
implies that in general an innovation will be delivered by industry. It’s very important
for government to provide policy incentives to strengthen innovation capabilities of
industry, especially those that could gear up the innovation capabilities powered by
industrial technology R&D.
Policy measures in reinforcing innovation capabilities of industrial technology
R&D include:
1. Enhancing industrial R&D organizations and functions:
In order to intensify the R&D activities for industry, Taiwan’s government
entices local and overseas enterprises to establish innovative industrial
technology R&D centers in Taiwan so as to enhance industrial R&D
organizations and functions. 66 innovative industrial technology R&D centers
have been set up by local enterprises since 2002. 22 innovative industrial
technology R&D centers are established by the multinational companies, as
shown in Table 22.
2. Strengthening innovative industrial technology R&D:
The overall budget allocation for innovation industrial technology R&D of
industry have soared up for 5 years. The more innovative R&D companies do,
the more subsides could obtain from the government.
3. Reinforcing networking between industry and universities:
Taiwan’s government encourages enterprises to form industrial technology R&D
alliances. 45 alliances have been made up since 2001.
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Table 22 R&D Centers set up by multinational companies in Taiwan
Company
Center
1 HPUSA HP Product Development Center
2 SONYJapan
SONY DECTDesign & Engineering Center
Taiwan
3 SONYJapan SMCT(System in Module Center Taiwan)
4 AIXTRONGermany Manufacturing Oriented Research Lab
5
Becker Avionics
Avionics Certification Skill And Key Technology
Germany
Development Center
6 DellUSA Dell Taiwan Design Center
7 MicrosoftUSA Microsoft Technology Center
8 IBMUSA Mobile e-business R&D Center
9 Pericom (USA) Advanced Mixed-Signal IC R&D Center
10 Intel (USA) Intel Innovation Center
11 IBMUSA Life Sciences Center of Excellence
12 Ericsson (Sweden) ERICSSON Innovation Center
13 Broadcom (USA) Network System on Chip (SoC) R&D Center
14 Motorola (USA) Product Development Center
15 Honeywell (USA) Honeywell Technical Center in Taiwan
16 IBM (USA) IBM xSeries Taiwan development center
17 GlaxoSmithKline GSK (UK) GSK Taiwan R&D Operation Center Plan
18 Atotech (Germany) Advanced Technology Center
19 DuPont (USA) DuPont Taiwan Technical Center
20 Alcatel (France) Alcatel ICT Application Research Center
21 AKT (USA) Asia Research & Development Center
22 NEC (Japan)
NEC Innovative Product Joint Development
Center for Engineering
Source : DOIT, MOEA, 2004
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4. Fostering development of industrial technology R&D support and peripheral
industries:
A good development of industrial technology R&D support and peripheral
industries would accelerate the time to market for developed technologies. 66
cases are promoted including product design, IP management, incubator,
digital content market place, silicon IP mall and design platform, and contract
research organization and so on.
6.2 Universities
With the accumulation of R&D resources, universities should play the role of
promotion in the development of the innovation-based economy. Universities should
endeavor to increase not only paper publications but also innovative and frontier
patenting. R&D activities should take into consideration both economic and
technological development. Universities should establish their professional specialties
with different R&D orientations. Deregulation and institutional reform should be
continued in order to reduce restrictions on the mobility, remuneration, appraisal, and
promotion of related personnel.
6.3 Industrial technology research institutes
Industrial technology research institutes would be catalysts that transform
Taiwan’s economy into the one based on “innovation-based economy”. It’s therefore
government should increase the percentage of innovative industrial technology R&D
budget. Other than the development of technologies, innovative industrial technology
R&D should also cover the development of services. Furthermore, government should
increase implementing institutes for innovative industrial technology R&D projects.
It’s also very crucial for industrial technology research institutes to integrate industrial
technology R&D across different categories among industry, universities and research
institutes. To network with the world-wide innovation fountain, it is also very
important to encourage industrial technology research institutes to commence global
communication of technology and technical cooperation with overseas organizations.
Most importantly, industrial technology research institutes should enforce themselves
in organizational reinvention to stimulate originality and creativity in the
organizations.
6.4 The government
The government maneuvers the process of “institutional reform” and
“deregulation” for the industrial technology R&D system. It’s recommended that
government convenes a meeting for cooperation between industry and universities for
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the Ministry of Economic Affairs, Ministry of Education, and National Science
Council to discuss related regulatory reform and institutional change.
7. Conclusions
Taiwan’s government has been started reorganizing the industrial technology R&D
system to promote an innovation-based economy by improving innovation
networking. The government has focused on deregulation and institutional reform in
order to provide a foundational environment to establish corresponding cultures for
innovative R&D. A culture for innovative industrial technology research was
established gradually inside the industrial technology R&D system. Outcomes of the
system with those adjustments are promising. This reshuffling process has likely set
an example for the rest of government agencies that would like to promote the
“innovation-based economy”.
References
1. Industrial Technology Intelligence Services Project, DOIT, MOEA, 2004
2. Conference materials of Science and Technology Meeting of the Executive Yuan,
R.O.C, 2003
3. Survey and Analysis of Innovative Competitiveness of Knowledge Economics
Project, DOIT, MOEA, 2003/2004
4. The Innovative Industrial Technology R&D Project Self-Evaluation Report, ITRI,
2004
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