Title: Public policies for the promotion of an innovation-driven economy in Taiwan

Authors: Joseph S. Lee, Jiann-Chyuan Wang

Addresses: Dean of the School of Management, National Central University, Taiwan. ' Director, Institute of Taiwan Economy, Chung Hua Institution for Economic Research, Taiwan

Abstract: Taiwan is heavily dominated by SMEs and thus suffers from the lack of economies of scale in R&D work. Interestingly, Taiwan ranks very highly in the world in terms of patents granted by the USA. Is Taiwan really very successful in R&D and innovation? What policies has the government adopted to overcome the island|s deficiencies in lack of economies of scale and achieve a high level of R&D? What lessons can policy makers from other countries learn from Taiwan|s experience? These are the questions discussed in this paper. The paper reveals that, in the past, Taiwan was very successful in using tax incentives, science-based industrial parks and public research institutions (such as ITRI) to promote and encourage R&D and innovation. However, as Taiwan moves towards a KBE, these tools are no longer adequate. The government has, consequently, implemented new tools such as venture capital, innovation incubators, an open laboratory system, and e-commerce. The effectiveness of these policies cannot be assessed at this moment because they are too new.

Keywords: R&D; research; innovation; knowledge-based economy; science-based industrial parks; economic development; SMEs; Taiwan; e-commerce; innovation incubators; open laboratories; venture capital.

DOI: 10.1504/IJEIM.2003.004793

International Journal of Entrepreneurship and Innovation Management, 2003 Vol.3 No.3, pp.227 - 248

Published online: 07 Jul 2004 *

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