2009 Industrial Development in Taiwan, R.O.C.(
PDF Version)
Foreword
I. Overview
1. The macroeconomic environment
2. Current status of Taiwan's industrial development
3. Taiwan's world-leading products
II. The Industrial Investment Climate
1. Infrastructure
2. Industrial parks
3. Human resources
4. Financial assistance
5. Technological development
6. Tax policies and incentives
III. Key Strategies and Measures
1. Promoting the development of emerging industries and key industries
2. Encouraging foreign enterprises to establish R&D centers in Taiwan
3. Encouraging foreign enterprises to establish international logistic centers in Taiwan
4. Encouraging enterprises to establish operational headquarters in Taiwan
5. Promoting sustainable development
6. Fostering investment and removing investment barriers
7. Furthering international cooperation
IV. Future Prospects
Foreword top
The manufacturing sector has been the key driving force for Taiwan's economic development. Over the past 50 years, the government and the private sectors in Taiwan have been working together to continuously enhance industrial competitiveness and to achieve steady economic growth. As a result of these efforts, Taiwan has become the global center for IC foundry and flat panel display as well as a manufacturing powerhouse for many high-tech products.
After many years of promoting internationalization and liberalization, Taiwan's infrastructure, industrial parks, human resources, technological capabilities, and taxation system are all on a par with those of the major industrialized countries.
The Industrial Development Bureau (IDB) has been giving full support to the development of a first-class investment environment; providing comprehensive assistance to business enterprises for overcoming investment obstacles; providing guidance for new industries' development as well as existing industries' upgrading and transformation, so as to lay a firm foundation for long-term national development. Thus, the IDB will work closely with the industry to jointly create a new chapter in our success story.
Woody, T. J. Duh, Ph.D.
Director General
Industrial Development Bureau,
Ministry of Economic Affairs
I. Overview top
1. The macroeconomic environment top
The economic performance of Taiwan over the past decades has been strong and stable. Between 1991 and 2000, the average annual growth rate of GDP was about 6.4%. After suffering negative growth for the first time in 2001, the economy recovered to resume a path of steady growth. In 2007, the GDP grew by 5.7%; whereas, in 2008, the GDP growth decreased to 0.06% due to global economic downturn.
In 2008, Taiwan ranked as the 26th largest economy in the world with a GDP totaling US$392.6 billion, and Taiwan's foreign exchange reserves of US$296.4 billion ranked as the 4th highest in the world, according to IMF World Economic Outlook. Total investment in Taiwan decreased at a rate of 4.6% in 2008, with private investment dropped by 8.7%, while investment by the government and public enterprises augmented by 9.2%. In addition, two-way trade expanded by 6% in 2008. The trade surplus decreased from US$27.4 billion in 2007 to US$15.2 billion in 2008.
Table 1: Taiwan Macroeconomic Economic Indicators in 2008
| GDP (US$ billion) |
392.3 |
| GDP per capita (US$) |
17,083 |
| Economic growth rate (%) |
0.06 |
| Consumer price index (%) |
3.5 |
| Unemployment rate (%) |
4.1 |
| Exports (US$ billion) |
255.6 |
| Imports (US$ billion) |
240.4 |
| Balance of trade (US$ billion) |
15.2 |
| Foreign exchange reserves (US$ billion) |
296.4 |
| Exchange rate (TWD:USD) |
31.54 |
| Approved overseas Chinese and foreign investment (US$ billion) |
8.2 |
| Outward investment (US$ billion) |
4.5 |
| China-bound investment (US$ billion) |
9.9 |
Source: Department of Statistics, MOEA
According to the Global Competitiveness Report 2009-2010 released by the World Economic Forum (WEF), Taiwan ranked12th out of 133 economies around the world and 4th in Asia in Global Competitiveness Index, the WEF's key indicator of medium to long-term economic growth expectancy. Taiwan maintained its fifth-best ranking among the world's major economies on Profit Opportunity Recommendation Indicator released by Business Environment Risk Intelligence (BERI) in September 2009. This report evaluates the business environment of 50 important economies using three main indices, namely Operations Risk, Political Risk, and Remittance and Repatriation Factor. In this report, Taiwan defends its fifth-place ranking since 2008, and also ranked second in Asia in terms of low-risk investment environment. Several prominent international institutes also give Taiwan a high rating for overall economic performance and competitiveness (See Table 2).
Table 2: Assessment of Taiwan's Overall Performance Conducted by International Institutes
| Institute |
Assessment |
World Ranking |
Asia Ranking |
Date of release |
| BERI |
Profit Opportunity Recommendation |
5 |
2 |
Sep 2009 |
| Operations Risk Index |
6 |
2 |
| Remittance and Repatriation Factor |
4 |
2 |
| EIU |
Information Technology Competitiveness |
2 |
1 |
Sep 2008 |
| IMD |
World Competitiveness |
23 |
7 |
May 2009 |
| WEF |
Global Competitiveness Index 2009-2010 |
12 |
4 |
Sep 2009 |
| Business Competitiveness Index |
23 |
7 |
Oct 2007 |
| Heritage Foundation |
2009 Indexes of Economic Freedom |
35 |
5 |
Jan 2009 |
2. Current status of Taiwan's Industrial Development top
The contribution of the industrial sector to GDP reached a peak in 1986 at 44.8% and since then has steadily declined. In 2008, the industrial sector's contribution to GDP decreased to 25%, while that of the services sector increased to 73.3%. With the advent of a knowledge-based economy, the services sector's contribution to GDP is expected to continue to rise; whereas, agricultural sector's contribution to GDP has been falling for decades and plummeted to only 1.7% in 2008 (See Chart 1).
Chart 1: Historical Chart of Taiwan's GDP Composition by Sector
| |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
| Agriculture |
7.1 |
7.5 |
7.1 |
6.2 |
5.6 |
5.4 |
5.2 |
4.9 |
4.7 |
4.0 |
| Industry |
42.9 |
41.8 |
42.8 |
43.8 |
43.8 |
44.8 |
44.5 |
42.3 |
39.6 |
38.4 |
| Services |
50.0 |
50.6 |
50.0 |
50.0 |
50.6 |
49.8 |
50.3 |
52.8 |
55.7 |
57.6 |
| |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
| Agriculture |
3.7 |
3.5 |
3.5 |
3.4 |
3.3 |
3.1 |
2.4 |
2.4 |
2.4 |
2.0 |
| Industry |
38.0 |
36.9 |
35.9 |
34.2 |
32.8 |
32.4 |
31.9 |
31.2 |
29.9 |
29.1 |
| Services |
58.3 |
59.6 |
60.6 |
62.4 |
63.9 |
64.5 |
65.7 |
66.4 |
67.7 |
68.9 |
| |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
|
|
| Agriculture |
1.9 |
1.7 |
1.7 |
1.6 |
1.7 |
1.6 |
1.5 |
1.7 |
|
|
| Industry |
27.6 |
28.3 |
28.0 |
27.6 |
27.1 |
27.0 |
27.8 |
25.0 |
|
|
| Services |
70.5 |
70.0 |
70.4 |
70.8 |
71.3 |
71.4 |
70.7 |
73.2 |
|
|
Source: 93SNA, DGBAS, Executive Yuan
According to the International Standard Industrial Classification system, the industrial sector includes mining and quarrying, manufacturing, construction, and public utilities. In 2008, the manufacturing industry's output with a total amount of US$ 417,921 million accounted for 93.08% of the total output of industrial sector in Taiwan. Within the manufacturing industry, the ICT industry's output accounted for 31.9%; the chemical industry 30.4 %, the metal and machinery industries 28.0%, and the consumer goods industries 9.7%. The workforce employed in the manufacturing industry was 2,533 thousand persons. A total of 3,766 new factories were opened in 2008; of which 1,771 factories were in metal and machinery industry (See Chart 2, Table 3 and Table 4).
Chart 2: Historical Chart of Taiwan's GDP Composition by Sector
| |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
| Metal and Machinery Industries |
18 |
19 |
19.4 |
19 |
18.6 |
20.4 |
21.4 |
23.3 |
25.3 |
25.7 |
| ICT Industry |
12.5 |
11.6 |
12.5 |
13.9 |
13.5 |
15.2 |
16.3 |
17.1 |
17.8 |
18.7 |
| Chemical Industry |
29 |
26.6 |
26.6 |
27.1 |
28 |
29.5 |
28.7 |
28.8 |
26.7 |
26.3 |
| Consumer Goods Industries |
41 |
42.8 |
41.6 |
40.1 |
39.8 |
34.9 |
33.6 |
30.8 |
30.2 |
29.3 |
| |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
| Metal and Machinery Industries |
26.2 |
27.5 |
28.1 |
27.8 |
27 |
26.8 |
27.6 |
27.7 |
26.1 |
24.9 |
| ICT Industry |
19 |
19.2 |
20.8 |
21.8 |
24.4 |
26.9 |
28.7 |
30.9 |
33.5 |
36.1 |
| Chemical Industry |
26.3 |
25.2 |
24.2 |
24.9 |
25.7 |
23.7 |
23.3 |
21.8 |
22 |
22.9 |
| Consumer Goods Industries |
28.6 |
28.2 |
27 |
25.5 |
22.9 |
22.5 |
20.4 |
19.7 |
18.4 |
16.1 |
| |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
| Metal and Machinery Industries |
23.8 |
24.9 |
26 |
27.7 |
27.7 |
26.8 |
27.1 |
28 |
| ICT Industry |
34.2 |
35.3 |
34.2 |
32.8 |
32.6 |
34.7 |
33.8 |
31.9 |
| Chemical Industry |
25.4 |
24.8 |
26.1 |
27.4 |
28.5 |
28.3 |
29.5 |
30.4 |
| Consumer Goods Industries |
16.6 |
15.1 |
13.7 |
12.1 |
11.2 |
10.2 |
9.6 |
9.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Monthly Report on the Manufacturing Industry,IDB/MOEA
Table 3: Development of the Manufacturing Industry in 2008
| |
Contribution to total output(%) |
Industry output(US$ million) |
Number of employees (thousand persons) |
Average output per person (US$ thousand) |
| Manufacturing Industry |
100.0 |
417,921 |
2,533 |
165 |
| 1. Metal and Machinery Industries |
28.0 |
116,821 |
752 |
155 |
| 2. ICT industry |
31.9 |
133,394 |
877 |
152 |
| 3. Chemical Industry |
30.4 |
127,101 |
459 |
277 |
| 4. Consumer Goods Industries |
9.7 |
40,605 |
446 |
91 |
Source: Monthly Report on the Manufacturing Industry, IDB/MOEA
Table 4: Investment in the Manufacturing Industry in 2008
| |
Manufacturing |
Metal & Machinery |
ICT |
Chemicals |
Consumer Goods |
| Domestic Investment |
Number of new factories |
3,766 |
1,771 |
665 |
671 |
659 |
| Number of closed factories |
4,255 |
1,635 |
807 |
844 |
969 |
| Foreign Investment (US$ million) |
2,379.2 |
195.5 |
1,153.5 |
455.5 |
574.8 |
| Outward Investment except China (US$ million) |
2,068.1 |
659.5 |
1,026.4 |
250.9 |
131.3 |
| China-bound Investment (US$ million) |
8,761.2 |
1,652 |
4,901.1 |
1,506.1 |
702.1 |
Source: Monthly Report on the Manufacturing Industry, IDB/MOEA
The technical services industry, including service providers in field of R&D, design, engineering, information, and consulting, has been developing as a result of division of labor within the industrial sector. In line with the general pattern in developed countries, industrial development in Taiwan has brought not only a steady growth in value added and employment scale, but has also fostered the expansion of the technical services industry. In 2008, the technical services industry created a total amount of revenue of US$ 19,672 million, receiving 691 investment projects (See Table 5 and Table 6).
Table 5: Development of the Technical Services Industry in 2008
| Revenue(US$ million) |
Share of total value-added(%) |
Number of employees(thousand persons) |
Share of total employees(%) |
Average revenue per person(US$ thousand) |
| 19,672 |
2.0 |
200 |
2.0 |
98 |
Note:
1. The revenue approximated the industry output and was estimated based on the statistics from Department of Statistics Bureau, MOEA, Financial Data Center, Ministry of Finance, and DGBAS, Executive Yuan.
2. The number of employees was based on Industry, Commerce and Service Census conducted by DGBAS and the survey conducted by Taiwan Economic Research Institute.
Table 6: Investment in the Technical Services Industry in 2008
| Technical Services Industry |
| Number of investment projects |
691 |
| Total amount invested (NT$ billions) |
48.2 |
Source: Industrial Development Bureau, MOEA
3. Taiwan's world-leading products top
Taiwan has become a world-class manufacturing center and has a leading global market share in many products. Table 8-1 and Table 8-2 list products made in and made by Taiwan ranked No. 1 globally in terms of production value or volume in 2008.
Table 7-1: Products made in Taiwan ranked No.1 in the world
| Item |
Production Value (US $ million) |
World share % |
Production Volume |
World share % |
World's largest production volume |
| Mask ROM |
480 |
93.8 |
199 million pieces |
93.8 |
|
| Chlorella |
213 |
70 |
700 tons |
70 |
★ |
| IC Foundry |
13,918 |
67.2 |
68 million pieces |
67.2 |
|
| Blank Optical Disk |
-- |
-- |
9.66 billion pieces |
55 |
★ |
| IC Package |
7,211 |
45.2 |
14.2
billion pieces |
45.2 |
|
| Mobility Scooter/Powered Wheelchair |
152 |
34 |
215 thousand vehicles |
30.6 |
|
| ABS Copolymer |
2,300 |
21 |
1.13 million metric tons |
21 |
|
Table 7-2: Products made by Taiwan ranked No.1 in the world
| Item |
Production Value (US $ million) |
World share % |
Production Volume |
World share % |
World's largest production volume |
| Portable Navigation Device |
3,575 |
96 |
39.46 million pieces |
89 |
|
| Mask ROM |
480 |
93.8 |
199 million pieces |
93.8 |
|
| Motherboard (system & pure MB) |
6,609 |
93.5 |
135.91 million pieces |
92.4 |
|
| Notebook PC |
57,039 |
92.0 |
112.38 million pieces |
92.4 |
|
| WLAN CPE |
1,950 |
95 |
100.62 million pieces |
92 |
|
| Cable Modem |
1,306 |
86 |
24.89 million pieces |
76 |
|
| Golf Head |
564 |
70 |
47 million pieces |
75 |
|
| LCD Monitor |
16,484 |
68.4 |
111.12 million pieces |
69.6 |
|
| Electronic Glass Fabric |
763 |
69 |
930 million meter |
62 |
|
| xDSL CPE |
1,712 |
67 |
57.22 million pieces |
72 |
|
| IC Foundry |
13,918 |
67.2 |
67.73 million pieces |
67.2 |
|
| Diving Suit |
261 |
65 |
3.49 million pieces |
60 |
|
| Electric Thermometer |
60 |
61 |
30.5 million pieces |
61 |
|
| CDT Monitor |
236 |
50.4 |
3.32 million pieces |
53.1 |
|
| Digital Blood-Pressure Monitor |
208 |
45 |
11.5 million pieces |
48 |
|
| Mobility Scooter/Powered Wheelchair |
242 |
48 |
325 thousand pieces |
46.4 |
|
| IC Package |
7,211 |
45.2 |
14.2 billion pieces |
45.2 |
|
| Shoes |
13,514 |
35 |
5.2 billion pairs |
37 |
|
| Ethernet LAN Switch |
1,460 |
6 |
227.69 million ports |
43 |
|
| Resuscitator |
22.3 |
30 |
2.21 million pieces |
30 |
|
| Server (System & Pure MB) |
3,283 |
5.5 |
7.56 million pieces |
86.9 |
★ |
| Chlorella |
213 |
70 |
700 metric tons |
70 |
★ |
| Blank Optical Disk |
-- |
-- |
9.66 billion pieces |
55 |
★ |
| Dry Film Photoresist |
2,800 |
36 |
240 million square meters |
40 |
★ |
| ABS Copolymer |
2,300 |
21 |
1.13 million metric tons |
21 |
★ |
Source: Industrial Development Bureau, MOEA
II. The Industrial Investment Climate top
A Superior investment environment and attractive incentives are the main factors in promoting both the industrial and economic development. Taiwan possesses a well-established infrastructure, excellent industrial parks, abundant talents, a sound fiscal system, strong technological capabilities, competitive tax incentives, and a solid legal framework, providing an excellent environment for Taiwan's industrial development.
1. Infrastructure
Taiwan is equipped with a well-developed transportation system. Apart from the existing round-the-island railway, the Taiwan High Speed Rail can reduce travel time with express trains that are capable of traveling at up to 300 km/h travel from north to south in roughly 90 minutes as opposed to 4-6 hours by conventional rail. Other than railways, there are eight national freeways, one north-south cross-island highway and three east-west cross-island highways, as well as several provincial highways and expressways. In the capitol of Taiwan, Taipei Rapid Transit System, as known as Taipei Metro, serves a large part of Taipei metropolitan area, and will be extended to The Taiwan Taoyuan International Airport. Taiwan's second largest city, Kaohsiung, launched Kaohsiung Mass Rapid Transit System in early 2008.
Taiwan's deep-water harbors and international airports offer effective domestic and international transportation services. The Port of Kaohsiung is Taiwan's largest container port and ranked the 7th largest in the world, according to Review of Maritime Transport: 2008; The Taiwan Taoyuan International Airport ranked the world's 15th busiest airport, according to Cargo Traffic 2008 final data from Airports Council International. With these advantages, many internationally renowned transportation and express delivery companies have increased their investments in Taiwan. For instance, United Parcel Service of America, Inc. (UPS) made Taiwan its pan-pacific transit center; DHL International GmbH. established six large cargo transit service centers in Taiwan; Federal Express Corporation established its Asia Pacific transit center and large-scale transit service center in Taiwan.
Water and electricity are vital components for the development of industry. Factories and plants require stable and reliable water and electricity supply for safe and efficient operation. In this regard, the government develops water resources according to the demand of various regions in the country to meet the needs of households and industry. The government also has made continuous efforts to diversify its power generation based on different energy sources in order to assure an adequate supply of electricity.
To cope with the liberalization of telecommunication markets worldwide and to provide a diversified range of telecom services, Taiwan's telecom services industry has been fully liberalized. As of December 2008, the penetration rate for mobile phones and fixed-line telephones were 110.3% and 56.8% respectively. The number of Internet users stood at 15.1 million; the number of broadband subscribers stood at 7.1 million, making Taiwan one of the top 20 broadband countries in the world. Taiwan ranked 6th in broadband penetration and ranked 20th in the number of broadband subscribers, according to the World Knowledge Competitiveness Index and World Broadband Statistics.
Moreover, the government is implementing the M-Taiwan Project (Mobile Taiwan), which focuses on constructing a mobile environment for the next generation, promoting innovative technologies and service applicability, integrating mobile and wireless networks and establishing a nationwide seamless Internet environment, and creating cutting-edge dual-network application services. Based on a government-funded wireless Internet environment, the project also entails collaboration with the telecommunication vendors, operators, digital content, and information services providers, etc. This project not only aims to create an "all-win" situation for customers, companies, and the government, but also enables customers to enjoy the various applications of high-speed Internet at a reasonable cost.
2. Industrial parks top
According to WEF Global Competitiveness Report 2009-2010, Taiwan ranked 6th out of 133 economies around the world in "state of cluster development." There are three types of industrial parks in Taiwan: "science-based industrial parks" (under the jurisdiction of the National Science Council, Executive Yuan), "export processing zones" (under the jurisdiction of the Export Processing Zone Administration Office, MOEA) and "industrial parks" (developed by the IDB, local governments and private enterprises). Following the pace of industrial transformation, Taiwan's industrial parks have developed into specialized parks and corridors. For example, the Nankang Software Park in Taipei is a technology park for knowledge-intensive industries that focus on software development, digital content, IC design, and biotechnology. The parks in entral Taiwan reflect the fact that the region, with its well-developed industrial supply chain, is an important manufacturing base for precision machinery. The Tainan Technology Industrial Park in southern Taiwan, with the Industrial Innovative R&D Zone, allows researches on core technologies, such as micro-nano systems, 3C integration, applications of communication software and the Internet, etc. The establishment of the Central Taiwan Science-based Industrial Park completes the linkage of the three science-based industrial parks in northern, central and southern Taiwan into a "technology corridor" along the western coast (See Figure 1).
Figure 1. Map of Industrial Parks, Science-based Industrial Parks and EPZs in Taiwan
In order to assist investors in acquiring land for production facilities, the IDB offers the following services:
(1) One-stop service in all industrial parks
In 2001, the IDB initiated a one-stop service in all industrial park service centers, accepting applications and forwarding the documents to the relevant government agencies during the factory construction period. To advise investors on the progress of their applications, the IDB also maintains an information service system in all industrial parks, which enables investors to inquire about the current status of their application, obtain information regarding the lease and sale of land, and receive other relevant information.
(2) The 00-66-88 Program
In order to reduce land costs during the initial factory construction period and to promote the utilization of land in all industrial parks, the IDB implemented the "Industrial Land Rental Discount Measures" (00-66-88 Program) on May 1, 2002. Under this program, qualified manufacturers renting land in industrial parks are entitled to certain benefits. They do not need to pay any rent for the first two years (00), and pay only 60% of the total rent for the third and fourth years (66) and 80% for the fifth and sixth years (88). The full rent becomes payable starting from the seventh year.
Under the Third Stage of the 00-66-88 Program, which will be implemented from January 2008 to December 31, 2009, companies renting land in an industrial park pay a reduced rent for the first six years. Any company applies to buy the land it rents during the rental period, the total or partial amount of rent previously paid can be deducted from the total cost of the land without paying any interest.
(3) The 789 Program
The IDB also implemented "Industrial Land Sale Discount Measures" (789 Program), offering different discounts for manufacturers buying land in certain industrial parks from October 1, 2009 to December 31, 2010.
A. 30% off in Changhua Costal Industrial Park, Tainan Technology Industrial Park, and Hualien Hoping Industrial Park
B. 20% off in Douliou Industrial Park and Yunlin Technology Industrial Park
C. 10% off in Yilan Litzer Industrial Park
(4) Release of Land Owned by Taiwan Sugar Corporation (TSC)
Manufacturers and property developers may submit their plans for the utilization of TSC-released land to the IDB. An inter-ministerial review committee will then appraise such investment projects, taking usage needs and project feasibility into consideration. Arrangements can then be made for TSC to lease the land to the approved applicants, thereby making the land available for industrial use.
(5) Land Rental Exemption and Reduction for the Leasing of State-owned Land
In line with the needs of industrial development, local governments may submit development plans of idle or underutilized state-owned land under their jurisdiction. The Council for Economic Planning and Development has organized a cross-ministerial review committee to coordinate the release of such land and to formulate measures to reduce the rental payable on state-owned land. Enterprises leasing state-owned land can now apply for a four-year exemption from land rental payment, followed by a fifty percent reduction in the amount payable for a period of six years.
3. Human resources top
According to WEF Global Competitiveness Report 2009-2010, Taiwan ranked 24th in Labor Market Efficiency out of 133 economies around the world. To meet the needs of future industrial development, the IDB has implemented the following measures to increase the size and quality of workforce through education, training and recruiting:
(1) Education
Taiwan places great emphasis on higher education, and every year the education system produces at least 20,000 professional personnel who graduate with a master's or doctoral degree. According to WEF Global Competitiveness Report 2009-2010, Taiwan ranked 13 in Higher Education and Training out of 133 economies globally. In order to expand the human resources supply of master's degree-level R&D personnel to the industry, the MOEA initiated a project in 2004, setting up specialized master's programs in conjunction with universities and enterprises.
(2) Training
The IDB conducts technical training programs in response to the needs of industrial development and in cooperation with relevant academia and research institutes. The objective of such on-the-job training and pre-job training programs is to prepare an adequate supply of technical personnel as may be required in the course of industrial development. The IDB also sets up "virtual colleges" to cultivate talents for key industries, such as semiconductors and digital content, and ensure the supply of human resources keeps up with the demand of enterprises.
(3) Recruiting
In order to attract and retain human resources from overseas, the government has relaxed the restrictions on foreign workers and simplified the application procedures in recruiting skilled workers from overseas. The government also organizes an overseas recruitment mission every year to help private enterprises recruit foreign professionals. Foreign workers will receive assistance with their language barriers and adaptation to local culture upon their arrival in Taiwan. This website (http://hirecruit.nat.gov.tw/english/index.asp) provides matching services for overseas talents and local recruiters.
4. Financial assistance top
In order to actively promote industrial development and upgrading, and to maintain continuous economic growth, the Development Fund of the Executive Yuan sets aside a special fund in cooperation with banks to provide various kinds of special low-interest loans. The loans include those for R&D; the purchase of automated, pollution-control and energy conservation machinery and equipment; small and medium enterprises; traditional industries, etc. The government also provides mid-to-long-term financing for major investment projects in amounts of NT$100 million or more upon application by private enterprise.
For small and medium-sized enterprises (SMEs) that were denied a loan due to a lack of sufficient collateral, the Small and Medium Business Credit Guarantee Fund, a non-profit organization founded by the government and financial institutions, can provide credit guarantees to qualified firms.
5. Technological development top
Each year, the IDB budgets to upgrade technology in industries, providing R&D grants to special projects under the "Regulations for Assisting Development of Leading New Products" and the "Traditional Industry Technology Development Assistance Program." The Department of Industrial Technology, MOEA also sponsors R&D projects conducted by industry and academia, and subsidizes the planning and development of critical, forward-looking industrial technologies.
With regard to R&D activities, the participation of several important research institutes, including the Industrial Technology Institute (ITRI), Institute for Information Industry (III), Chung Shan Institute of Science and Technology (CSIST), Taiwan Textile Research Institute (TTRI), Metal Industry Research and Development Center, and Food Industry Research and Development Institute, is instrumental for the development of new industrial technologies in private sector.
To further promote the dissemination of technology, the IDB has established the Taiwan Technology Marketplace (TWTM, http://www.twtm.com.tw) as a worldwide technology/patent transaction platform for industries, academia, and research institutes. TWTM also provides matching service of technology/patent transaction together with intellectual property consulting services.
Taiwan tops the world in "utility patents," according to WEF Global Competitiveness Report 2009-2010, and the number of Taiwan's patents registered in the U.S. ranked 6th globally in 2008 (See Table 8). As for Taiwan's R&D expenditure, the proportion of R&D expenditure to GDP was 2.62% in 2007; the proportion of R&D conducted by business enterprises accounted for 67.2% of the whole R&D expenditure in 2006 (See Table 9).
Table 8: Number of US Patents Granted to the Citizens of Selected Countries
| 2008 Ranking |
Country |
No. of Patents |
Share of All Patents Granted (%) |
| 2000 |
2006 |
2007 |
2008 |
2000 |
2006 |
2007 |
2008 |
| 1 |
United States |
97,011 |
102,267 |
93,690 |
92,000 |
55.1 |
52.1 |
51.2 |
49.7 |
| 2 |
Japan |
32,922 |
39,411 |
35,941 |
36,679 |
18.7 |
20.1 |
19.6 |
19.8 |
| 3 |
Germany |
10,824 |
10,889 |
10,012 |
10,086 |
6.1 |
5.5 |
5.5 |
5.4 |
| 4 |
Untied Kingdom |
4,092 |
4,329 |
4,031 |
3,843 |
2.3 |
2.2 |
2.2 |
2.1 |
| 5 |
France |
4,173 |
3,856 |
3,720 |
3,813 |
2.4 |
2.0 |
2.0 |
2.1 |
| 6 |
Taiwan |
5,806 |
7,920 |
7,491 |
7,779 |
3.3 |
4.0 |
4.1 |
4.2 |
| 7 |
Canada |
3,925 |
4,094 |
3,970 |
4,125 |
2.2 |
2.1 |
2.2 |
2.2 |
| 5 |
South Korea |
3,472 |
6,509 |
7,264 |
8,731 |
2.0 |
3.3 |
4.0 |
4.7 |
| 9 |
Italy |
1,967 |
1,899 |
1,836 |
1,916 |
1.1 |
1.0 |
1.0 |
1.0 |
| 10 |
Switzerland |
1,458 |
1,388 |
1,280 |
1,403 |
0.8 |
0.7 |
0.7 |
0.8 |
| |
Total |
176,083 |
196,437 |
182,928 |
185,244 |
100 |
100 |
100 |
100 |
Source: US Patent and Trademark Office (USPTO)
Table 9 Research and Development Expenditure Comparison
| Category/Country |
Total R&D Expenditure(US$ millions) (PPP) |
Proportion of R&D Expenditure to GDP (%) |
Proportion of government R&D to total R&D expenditure (%) |
Proportion of business R&D to total R&D expenditure (%) |
| Taiwan, 2007 |
18,117 |
2.62 |
31.4 (2006) |
67.2 (2006) |
| Japan, 2006 |
138,782 |
3.39 |
16.2 |
77.1 |
| U. S. A., 2006 |
343,748 |
2.62 |
29.3 |
64.9 |
| Germany, 2006 |
66,689 |
2.53 |
28.4 (2005) |
67.6 (2005) |
| France, 2006 |
41,436 |
2.11 |
38.4 (2005) |
52.2 (2005) |
| The U.K, 2006 |
35,591 |
1.78 |
31.9 |
45.2 |
| South Korea, 2006 |
35,886 |
3.23 |
23.1 |
75.5 |
Source: Indicators of Science and Technology 2008, National Science Council, Executive Yuan
6. Tax policies and incentives top
The maximum business income tax rate currently is 25%, and the maximum rate for personal income tax is 40%. The two taxes have been integrated since January 1, 1998. Business income tax paid by a company can be deducted from the personal income taxes paid by its individual shareholders. Various tax incentives are available to companies to reduce their tax burden. Since January 1, 2006, companies with business income of NT$2 million or more have been subject to an alternative minimum tax, which obliges the companies to pay at least 10% in tax on their income after all tax benefits have been taken into account. In 2008, the average nominal tariff rate for all imported goods is 5.98%, with 4.18% for industrial products and 14.83% for agricultural products. The value-added business tax rate is as low as 5%.
The main vehicle for the government to promote industrial development hitherto is the Statute for Upgrading Industries (SUI), providing following incentives:
(1) Incentives for new investment
Companies in the manufacturing industry and technological services industry can enjoy a five-year tax exemption against business income tax for new investments made during the period from July 1, 2008, to December 31, 2009. Capital increase threshold and purchase of new machinery or equipment amounting to is at least NT$500,000 for manufacturing industries, and NT$100,000 for technology services industries.
(2) Incentives for R&D
1. Companies can enjoy a 30% tax credit against business income tax for their research, improvement and experiment expenses incurred for research and developing new products, improving production technology, technology for providing services and production process.
2. Equipment and machinery exclusively used for R&D, experiments or quality inspection can be fully depreciated over a two-year period.
3. When patent rights are provided or sold to companies in Taiwan, only 50% of the royalty payment is calculated as the taxable value for purposes of personal income tax.
(3) Incentives for personnel training
Companies can enjoy a 30% tax credit against business income tax for expenditures for personnel training relevant to the company's business activities.
(4) Incentives for automation
1. Companies can enjoy a 5% to 20% tax credit against business income tax payable for expenditures for purchasing automated equipment and production technologies. (The deduction rate for automated equipment is 7%, and that for automated technology is 5%).
2. Companies are also eligible for low-interest loans for the purpose of purchasing automated equipment and machinery.
(5) Incentives for newly emerging and strategic industries
1. A tax credit of up to 20% of the capital investment made by a corporate investor in a newly emerging and strategic industry can be applied against its business income tax payable. In the case of an individual investor, the tax credit may be as high as 10%. (The deduction rate for individual investors is 7%).
2. Alternatively, companies in a newly emerging and strategic industry may choose to be exempted from business income tax for a five-year period (tax holiday). This exemption requires that shareholders waive their investment tax credit by passing a resolution to this effect at a shareholders meeting within two years from the date of the first stock subscription by shareholders.
(6) Incentives for pollution control and energy conservation
1. Companies making investment in equipment and technology for pollution control and energy conservation can be granted a 5% to 20% tax credit against business income tax payable for expenditures on the equipment and technologies. (The deduction rate for equipment is 7%, and for technology is 5%; for energy-saving equipment is 15 %, and for energy-saving technology is 10%).
2. Exemptions from import tariffs are available for equipment (including components) used exclusively for the prevention and control of air pollution, noise and vibration control, water pollution control, toxic chemical substance pollution control, waste clean-up, soil and groundwater contamination remediation, and environmental analysis.
3. Machinery and equipment purchased for pollution control and energy conservation or for use of new and clean energy, and are able to reserve or substitute energy may be fully depreciated over a two-year period.
Nonetheless, in the effort to create a more efficient industrial development environment facing new challenges in the 21st century, and as an integrated part of the broader fiscal reform policy strategy, the Statute for Upgrading Industries (SUI) will phase out at the end of 2009, and will be replaced by the Statute for Industrial Innovation (SII). The SII aims to meet the needs of industrial development and innovation by offering tax incentives to improve industrial environment as well as to upgrade industrial competitiveness in Taiwan.
III. Key Strategies and Measures top
The IDB has been implementing a wide variety of measures to strengthen the industrial development in Taiwan, and to help enterprises adjust to changes in the external business environment, such as the ongoing process of economic liberalization, improvement of environmental quality and changes in employment relations.
1. Promoting the development of emerging industries and key industries top
To maintain Taiwan industry's competitive advantages in international markets, the IDB has been endeavoring to bring about effective collaboration between the government and the private sector in promoting the development of emerging and key industries. The government designated a number of market-leading industries. It is anticipated that focusing resources on these industries will help to promote the development of related industries, thereby strengthening the competitiveness of Taiwan's emerging and key industries.
Emerging industries the development of which the government is promoting include the wireless broadband and related services, digital life industry, healthcare, and green industries.
The IDB has also formulated the following promoting measures to promote the key industries, including semiconductor, flat panel, communications, biotech, petrochemicals, steel, information services, design services, R&D services, machinery, textile & clothing, digital content, and telematics (See Table 10).
Table 10 Status of 2008, Goals for 2015 and Promoting Measures of Key Industries
| Category |
Iron and Steel |
| Status of 2008 |
● Production value in 2008: NT$1,540 billion |
| Goals for 2015 |
● Production value in 2015: NT$1,690 billion |
| Promoting measures |
1. Enhancing the ability to produce high-quality steel materials
2. Strengthening market-based competition mechanisms to help the industry respond to changes in global supply and demand
3. Coordinating the domestic production of iron and steel materials to give priority to meeting domestic demand
4. Balancing environmental and economic development needs, developing best-available technology (BAT) to reduce environmental impact
5. Helping the industry to develop reliable and competitive supply sources for steel-making operations
6. Providing guidance to improve the energy efficiency of electric arc furnace plants |
| Category |
Machinery |
| Status of 2008 |
● Production value in 2008: NT$855 billion
● World's 5th largest machine tool producer |
| Goals for 2015 |
● Production value in 2015: NT$1,700 billion
● Becoming world's 4th largest machine tool producer |
| Promoting measures |
1. Increasing the R&D budgets for leading and special projects, including the development of machine tools, machinery component parts, FPD production equipment and electronic machinery
2. Helping manufacturers to develop high-tech production process equipment, key components and application software to support product differentiation and value adding
3. Training specialized personnel and encouraging promotional mechanisms for white-collar and blue-collar workers
4. Encouraging manufacturers to expanding business scale and global market share through mergers and acquisitions
5. Conducting research in potential/emerging industry markets to identify business opportunities |
| Category |
Telematics |
| Status of 2008 |
● Production value in 2008: NT$67.8 billion |
| Goals for 2015 |
● Production value in 2015: NT$300 billion |
| Promoting measures |
1. Helping companies develop smart cars and key system components and modules through the Technology Development Plan (TDP)
2. Establishing inspection and testing standards for leading international car manufacturers and Tier One suppliers
3. Providing information and analysis regarding international telematics standards, regulatory requirements and industry developments
4. Participating in international standards-setting organizations and international automotive industry conferences, to help Taiwanese companies develop international markets
5. Supporting collaboration with domestic automakers to integrate telematics into their supply chain
6. Helping Taiwanese telematics firms improve product quality to secure certification from leading international car makers, and integrate into global supply chains |
| Category |
Communications |
| Status of 2008 |
● Production value in 2008: NT$384.2 billion (communication equipment and components)
● WiMAX production value in 2008: NT$6,184 billion |
| Goals for 2015 |
● Production value in 2015: NT$572.9 billion (communication equipment and components)
● Becoming world's leading producer of hand-held networking and communications devices
● Top global market share in 10 key networking and communication product categories
● Establishing an industry chain for broadband wireless access, IPTV and IP surveillance |
| Promoting measures |
1. Promoting domestic deployment of fiber-optic and WiMAX networks, encouraging the use of Made-in-Taiwan (MIT) network equipment, and building interoperability testing capabilities to develop business opportunities for deployment of next-generation networks (NGN)
2. Strengthening industrial collaboration by signing memorandums of understanding with leading international communication equipment vendors to explore procurement opportunities in emerging markets
3. Promoting the establishment and collaboration of applications for cross-strait broadband and wireless broadband networks
4. Promoting new fiber-optic broadband services, and encouraging the development of opportunities for people to experience new wireless broadband applications services that target particular locations or groups
5. Establishing new indicators for communications industry competitiveness, and continuing to monitor the overall health of the industry; and helping companies to establish mechanisms for training personnel in the use of new technologies |
| Category |
Semiconductor |
| Status of 2008 |
● Production value in 2008: NT$1,347.3 billion
● 12-inch fabrication plants: 19 fabs in operation, 6 under construction, and 16 in planning |
| Goals for 2015 |
● Production value in 2015: NT$1,657.5 billion
● 12-inch fabrication plants: 27 fabs in operation, 4 under construction, and 10 in planning |
| Promoting measures |
1. Leveraging the "Semiconductor Institute Project" to cultivate talent in line with industry needs
2. Promoting investment in the Nangang IC Design Incubator Center
3. Encouraging semiconductor firms to establish R&D centers for the development of cutting-edge research on semiconductor production processes
4. Establishing mechanisms and liaison windows for international exchange to enhance international technology collaboration and to explore international business opportunities
5. Helping the industry to overcome investment obstacles; supporting and promoting large-scale investment projects |
| Category |
Flat Panel Display (FPD) |
| Status of 2008 |
● Production value in 2008: NT$1,637 billion
● G2.5 to G6 production facilities: 13
● G7.5 production facilities: 2 |
| Goals for 2015 |
● Production value in 2015: NT$2,600 billion
● G2.5 to G6 production facilities: 14
● G7.5 production facilities: 2
● G8.5 production facilities: 2 |
| Promoting measures |
1. Helping the industry to overcome investment obstacles; supporting and promoting large-scale investment projects; upgrading the industry's ability to self-produce key components
2. Promoting the value of Taiwanese FPD brands; helping FPD firms to participate in major FPD exhibitions and expos
3. Holding the FPD Component, Product & Technology Awards annually to encourage technology development
4. Coordinating FPD industrial resources to promote the development of a green value chain and establish a green product inspection and testing system
5. Helping FPD manufacturers to develop and patent key technologies
6. Integrating the LED and lighting industries to expand the scope of LED applications
7. Cultivating LED industry talent |
| Category |
Digital Content |
| Status of 2008 |
● Production value in 2008: NT$400.4 billion
● Amount of Investment, including direct and indirect investment: NT$15.1 billion
● Combined value in international collaboration projects: NT$2.05 billion
● Medium/long-term talent cultivation: 200 people; in-service training: 500 people |
| Goals for 2015 |
● Production value in 2008: NT$720 billion
● Amount of direct investment: NT$6 billion
● Combined value in international collaboration projects: NT$3.6 billion
● Medium/long-term talent cultivation: 300 people; in-service training: 600 people |
| Promoting measures |
1. Providing investment, financing and product development subsidies and guidance to assist the industry in innovation and upgrading
2. Cultivating digital content talent in line with the industry needs
3. Organizing digital content competitions to incentivize the development of outstanding products and emerging talent
4. Providing open sharing services at the Digital Content Academy to support SME product development
5. Participating in major exhibitions and expos, both in Taiwan and international, and organizing sale promotions
6. Developing the international market and leveraging Chinese e-learning products and services
7. Encouraging different industries to adopt e-learning; promoting cross-industry alliances and collaboration
8. Promoting industrialization of digital archive materials |
| Category |
Petrochemicals |
| Status of 2008 |
● Production value in 2008: NT$1,630 billion
● World's 8th largest producer of ethylene, with annual production capacity of 4.2 million tons |
| Goals for 2015 |
● Production value in 2015: NT$2,700 billion
● Becoming world's 6th largest producer of ethylene, increasing annual ethylene production capacity to 5.89 million tons |
| Promoting measures |
1. Gradually expanding production to balance the development of dual-core petrochemical production in Taiwan
2. Encouraging the development of high value-added petrochemical products
3. Promoting the globalization of operations and sustainable development in the petrochemical industry |
| Category |
Biotechnology |
| Status of 2008 |
● Production value in 2008: NT$201 billion
● Global market share of over 50% for pre-filled syringes, electronic thermometers, and micro-cellulose (MCC) products |
| Goals for 2015 |
● Production value in 2015: NT$650 billion
● Developing niche products: Multifunctional remote patient monitoring equipment, clinical biochemical analysis instruments, compound products for chronic diseases, and generic biomedicines |
| Promoting measures |
1. Building an environment conducive to the development of the biotech industry; encouraging leading international biotech firms to invest in Taiwan, to consolidate the biotech industry supply chain
2. Expanding the promotion of investment, technology transfer (of R&D results), international collaboration, and strategic alliances
3. Identifying technologies and products in which Taiwan enjoys competitive advantages to integration in global supply chains
4. Coordinating the formation of export promotion alliances to develop international markets
5. Helping companies to develop as specialized pharmaceutical manufacturers and build brand images
6. Collaborating with the ICT industry to add value and develop a smart medical supply industry
7. Establishing a comprehensive testing and certification system
8. Strengthening the image of MIT (made-in-Taiwan) medical devices, co-branding to develop international markets |
| Category |
Textile & Clothing |
| Status of 2008 |
● Production value in 2008: NT$433.8 billion (including man-made fibers)
● Proportion of total production value by category: garments: 68%; home furnishings: 12%; industrial textiles: 20% |
| Goals for 2015 |
● Production value in 2015: NT$580 billion
● Proportion of total production value: garments: 50%; home furnishings: 17%; industrial textiles: 33% |
| Promoting measures |
1. Developing product differentiation in functional textile and industrial textile to boost product added value
2. Developing inspection and certification systems for functional and industrial textile products
3. Encouraging the establishment of R&D centers and e-enablement |
| Category |
Design Services |
| Status of 2008 |
● Production value in 2008: NT$77 billion
● Annual exports: NT$43.2 billion
● 450 winners of international design awards |
| Goals for 2015 |
● Production value in 2015: NT$115 billion
● Annual exports: NT$70 billion
● 1,700 winners of international design awards |
| Promoting measures |
1. Helping design services firms with market development
2. Helping traditional industries to add value through design
3. Helping the high-tech sector with global design market logistics
4. Promoting the development of innovative design applications
5. Strengthening the integration of international design talent
6. Strengthening the international image of Taiwanese design |
| Category |
R&D Services |
| Status of 2008 |
● Production value in 2008: NT$110 billion |
| Goals for 2015 |
● Production value in 2015: NT$165.1 billion |
Promoting measures
|
1. Leveraging the Taiwan Technology Marketplace (TWTM) and Technology Information Network to facilitate transactions involving the R&D results of the industry, academia and research institutes, and promoting the establishment of industry-specific technology transaction service alliances by the R&D services industry
2. Promoting the adoption of Technology and Intellectual Property Strategies (TIPS)
3. Collaborating with appraisal organizations in the U.S. to cultivate domestic appraisal talent |
| Category |
Information Services |
| Status of 2008 |
● Production value in 2008: NT$302.7 billion
● Number of CMMI-certified firms: 111, ranking Taiwan the 7th in the world
● Export value in 2008: NT$44.8 billion
● One Taiwanese information services firm ranked among the top-five ERP firms in the Asia Pacific region. |
| Goals for 2015 |
● Production value in 2015: NT$488 billion
● Number of CMMI-certified firms: 200, ranking Taiwan the 7th in the world
● Export value in 2015: NT$65.5 billion
● At least two Taiwanese information services firms will rank among the top-three in specific segments in the Asia Pacific region. |
| Promoting measures |
1. Providing guidance to help outstanding Taiwanese information services providers improve their export performance
2. Promoting the development of new information services sub-industries and information services solutions for regional industry clusters
3. Helping information services firms to organize delegations to attend international exhibitions and expos, and to form alliances with leading international vendors and local distributors
4. Providing guidance to help information services providers adopt Capability Maturity Model Integration (CMMI), and publicizing examples of successful CMMI adoption
5. Cultivating CMMI-specialized talent |
Source: Industrial Development Bureau, MOEA
2. Encouraging foreign enterprises to establish R&D centers in Taiwan top
The government launched the “Multinational Innovative R&D Centers in Taiwan” program in 2002 to encourage foreign enterprises to set up R&D centers in Taiwan to take advantage of Taiwan's comprehensive industrial supply chains, excellent professional personnel, bountiful supply of capital, and a good legal system that effectively protects intellectual property. In response to this program, internationally renowned companies, such as HP, Becker, Sony, Dell, Microsoft, Intel, DuPont, Wyeth, Phoenix, AIXTRON, Fujitsu, Motorola, Nokia, Pfizer, JSR, GM, Matsushita and Broadcom, have set up R&D centers in Taiwan.
3. Encouraging foreign enterprises to establish international logistic centers in Taiwan top
In order to encourage foreign enterprises to establish international logistics centers in Taiwan, Article 14-1 of the “Statute for Upgrading Industries” provides the following incentive: Any foreign company or its branch office in Taiwan which sets up a logistic center to conduct cargo storage, processing or distribution of its goods to local or regional customers is exempted from the business income tax.
4. Encouraging enterprises to establish operational headquarters in Taiwan top
The government encourages domestic as well as foreign enterprises to establish their operational headquarters in Taiwan so that high value-added activities in the supply chain, such as R&D, design, brand marketing, management, distribution and logistics support, can be conducted in Taiwan. The IDB has developed concrete measures to help enterprises set up their operational headquarters in Taiwan by strengthening the financial system, expanding the supply of human resources, and offering reasonable tax incentives and efficient administrative services (See Table 11). As of June 2009, 640 operational headquarters have been established in Taiwan.
Table 11 Promoting measures for Establishment of Operational Headquarters
| Type of measures |
Measures |
| Tax incentives |
Exemption of business income tax on income derived from
1. providing management services or R&D services to overseas affiliates
2. royalty payments by overseas affiliates
3. capital gains and dividends payable by overseas affiliates. |
| Land acquisition assistance |
Assisting companies in rezoning industrial districts for establishment of operational headquarters |
| Professional personnel recruitment |
1. Draft-age young men with technology backgrounds are allowed to work in the operational headquarters as an alternative to military service.
2. Foreigners who hold at least a Bachelor's degree and are hired by the operational headquarters to engage in professional and technical activities in Taiwan may be exempted from requirements on work experience.
3. The application procedure for the operational headquarters to invite Mainland Chinese professional personnel to visit Taiwan has been simplified. |
Source: Industrial Development Bureau, MOEA
5. Promoting sustainable development top
A high-quality environment for industrial development requires a proper strategy for sustainable development. The IDB has therefore formulated policies to promote the sustainable use of resources, clean production, greenhouse gas reduction, industrial safety, waste recycling and treatment, and the development of security industry.
In order to comply with global trends in environmental protection and industrial safety, the IDB assists factories in establishing their own environment management system (ISO 14001), occupational safety and hygiene management systems (OHSAS 18001), and promotes technologies relevant to environment management (e.g. CER, LCA, EPR, EA and EPE). The IDB also provides the industry with the information about international environmental protection and industrial safety conventions, such as Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal; United Nations Framework Convention on Climate Change, WEEE, RoHS & EuP, etc.
6. Fostering investment and removing investment barriers top
In line with the “Investment in Taiwan First Program” approved by the Executive Yuan, the MOEA actively encourages investments from selected target investors. Task forces and industrial promotion offices are responsible for identifying these investors. In addition, the “Coordination Office for Investment Promotion” was set up to provide one-stop service to handle major investment projects of over NT$200 million in the manufacturing sector as well as to deal with the development projects of industrial parks, multi-purpose industrial and commercial districts, independent power plants, etc.
7. Furthering international cooperation top
The IDB actively participates in WTO negotiations and regional economic integration efforts, with the aim of building up a fair, reasonable and open environment for industrial development and reinforcing the international competitiveness of domestic industries through mutually beneficial cooperation with other economies.
The bilateral industrial cooperation consultation meeting (ICCM) is held annually with France in order to increase communications with senior government officials and to enhance substantive economic cooperation. All MOEA's task forces and industrial promotion offices participate in the ICCM and organize delegations to visit France. Such measures are designed to help Taiwan industries acquire key technologies, develop overseas markets and attract foreign companies to invest in Taiwan.
IV. Future Prospects top
In recent years, economic globalization and the growing importance of information technology have intensified economic competition worldwide. In response to this trend, countries all over the world have been adopting globalized strategies for production, marketing and R&D. Restrictions that have hampered the flow of production factors, products and capital are gradually loosening, and business information flows faster and more freely, contributing to the deepening of global economic integration. As the development of new technology continues and existing technologies come into more widespread use, business enterprises are able to leverage technology to overcome obstacles to growth. The intensification of competition has led to a shortening of product lead times, time to market, and product lifecycles, leading to dramatic changes in the industrial structure and in competitive strategies.
In the future, Taiwan must continue to upgrade its industries and enhance the business environment to achieve quantitative and qualitative improvements. For the manufacturing industry, development strategies should be based on high market and development potential, higher levels of technology, high value-added, low pollution, and reduced reliance on non-renewable energy sources. Enterprises will need to strengthen their design, R&D, logistics and marketing capabilities to build on core competitive advantages. Such efforts will also help Taiwan transform into a leading global R&D and logistics center and a major international production base for high value-added products.
Table 12: Objectives for Development of the Manufacturing Sector
| Category |
2008 |
2009 |
2015 |
| Number of manufacturers (thousand) |
76 |
75 |
79 |
| Number of employees (thousand) |
2,530 |
2,400 |
2,400 |
| Production value (US$ billion) |
417.9 |
464.4 |
559.6 |
| Added value (US$ billion) |
85.7 |
99.8 |
140 |
| Export value (US$ billion) |
233.1 |
246.1 |
310.7 |
| Average annual production value per employee (US$ thousand) |
165 |
194 |
233 |
| Average added value per employee (US$ thousand) |
34 |
42 |
52 |
| Percentage of R&D expenditure to total production value (%) |
-- |
1.7 |
2.5 |
Source: Research project conducted by Taiwan Institute of Economic Research, commissioned by IDB/MOEA.
2009 Industrial Development in Taiwan, R.O.C.
Author: Industrial Development Bureau, Ministry of Economic Affairs
Publisher: Dr. Woody T. J. Duh
Publishing Unit: Industrial Development Bureau, Ministry of Economic Affairs
Address: 41-3, Sinyi Rd., Sec. 3, Taipei 10675, Taiwan (R. O. C.)
Tel: 886-2-2754-1255
Fax: 886-2-2703-0160
Website: http://www.moeaidb.gov.tw
