This study aims to identify the effectiveness of Science Park policy to innovation environment formation through reviewing the evolution of regional technology-based development policy in Taiwan with particular reference to HSIP. The research interest, particular, is focused on the analysis of three major aspects of technopolis development and impact on regional innovation. Through the case study, it is identified that development from pure science park to technopolis have had good impacts on regional development based on the regional innovation and production networks. The research results show us two decades of development began with the establishment of the HSIP in 1980, aiming at mass production, followed by the
gradual inwards migration of a technical labor force, stimulating the development of the area around the HSIP and the establishment of related industries (Figure 11). Moreover, because the development of the knowledge economy depends on innovation to enhance competitiveness, spatial proximity was utilized to create a business environment, and a technological infrastructure oriented towards incubating research and development activities was established to strengthen the competitive advantages of HSIP companies. The accumulated spin-off effects of innovative production networks were also reflected in the evolution of the local socioeconomic environment.
Such industrial evolution has not only influenced the structure of production space, but has also promoted the transformation and development of the local population structure and residential communities. Consequently, the growth of HSIP shaped the formation of Hsinchu technopolis. Simultaneous with the continued agglomeration of high-tech companies, functional space also emerged for local industrial network components, that is, mass production, R&D, and incubation. Moreover, support industries and space for these three types of functional space also began to materialize. Consequently, in terms of related industries, the establishment of HSIP contributed significantly to the development of local support industries, especially the rapidly growing producer service industries and KIBS.
Two peak periods were found in the overall development of producer services in the Hsinchu technopolis. The first peak was when interactions between HSIP industries and producer services emerged. The second peak occurred after the local industrial network gradually impacted accessible areas in the vicinity of HSIP and further stimulated interactions and the establishment of producer services. Consequently, producer services in Hsinchu City expanded to other accessible locations through major transportation thoroughfares.
The authors also found that the industries in the Hsinchu technopolis pursued more compartmentalized and specialized production methods as industrial activities in the Hsinchu technopolis became more diversified. From invention and production to sales and marketing,
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such processes require the support of many different professions. A sustainable industrial development environment requires various resources, in order to establish an integral industrial network. Such interactions in the vicinity of ITRI and HSIP led to the demand for and dependency on a variety of producer services, particularly KIBS industries. Consequently, a network of business services also began to emerge.
Moreover, although communication costs have decreased considerably because of globalization and the improvement of communication technology, face-to-face interactions remain essential for the spatial agglomeration of high-tech innovation owing to the ambiguity and uncertainty of new innovative knowledge. Therefore, location remains a key factor. The local innovation and production network formed by the HSIP, the surrounding area and technological infrastructure not only strengthened the local agglomeration economy, but also became a major force for enhancing the competitive advantage of local industry.
The authors also found that the spatial proximity of firms clustering within the HSIP strengthens the interaction among high-tech personnel and the expansion of their professional networks, as a result, innovative R&D activities are effectively promoted. The geographical proximity of firms also facilitates rapid mobility of high-tech human resources within the industrial cluster and even encourages the spinning-off of work teams. It is found that the aforementioned interaction process has directly and significantly improves innovative activity in the cluster and the establishment of industrial innovative networks. Moreover, interaction among high-tech talent is particularly significant in promoting innovation activities of small and medium high-tech firms.
Considering factors such as the intentions of R&D investment and activity, technology transfers, human resource spin-offs, production and trading interactions, and so on, the authors also concluded that the northern region of Taiwan comprises a complete innovation environment, that is from science park to high-tech region. During the early stages of new production and the
spinning-off of a new firm, firms in the northern Taiwan area tend to locate around ITRI and the HSIP. When these firms have developed mature and extensive relationship networks, as demonstrated by an analysis of their production and trade interactions, they tend either to put down roots and remain in an appropriate location within the northern Taiwan industrial cluster or alternatively establish connections with other clusters in order to integrate cross-boundary resources. Additionally, the synergies achieved through the linking with ITRI (the first R&D park) and HSIP (the first Production and R&D park) in Taiwan also promoted the formation of an innovation cluster in Hsinchu technopolis, and expanded the production cluster over the northern region of Taiwan. Furthermore, the innovation cluster was then reinforced by the technological infrastructure, ITRI.
Moreover, following the emergence of the new linkage of the United States, Taiwan and China during the mid-1990’s, the establishment of cross-border interactions among clusters has attracted considerable interest of high-tech firms and researchers. Cross-border interactions among clusters have significantly changed the conventional perspective of cluster dimensions and geographical connections. However, firms still rely on spatial proximity, establishing their R&D centers in the Hsinchu or northern Taiwan, to fulfill the practical requirements for face-to-face interaction and reduce the risks associated with uncertainty and technological infrastructure costs.
Local innovative clusters with close spatial relations and deep interactions within the technological community enjoy advantages in knowledge competitiveness.
Notes
1. Park companies accounted only 56% of total research and development funding in Hsinchu area in 1990. By 1994, it has increased to 56% and by 1998, 84%. Between 1990 and 1999, research and development funding of Park companies grew ten times, exceeding that of Hsinchu area, and even the funding of the entire nation.
2. In 1999, there were a total of 11,092 oversea approved patents in Taiwan. Out of this number, 1,276 were owned by companies located in HSIP. (Source: 2000 Indicators of Science and Technology, Taiwan)
3. The survey questions mainly dealt with three areas - frequency of interaction among high-tech personnel and
24
mobility of high-tech talent. The firms were in the integrated circuit, computer and peripheral, telecommunications, and opto-electronics sectors. Some 600 questionnaires were distributed and 243 usable responses were returned.
4. All types of industry include agriculture, forestry, fishery, animal husbandry and mining, manufacturing, water, electricity, fuel and natural gas, metal and mechanics, IT and electronics, chemical engineering, household trades, service and others. (Source: ITRI’s Technology Service Center)
5. Technological cooperation contracts and trade networks that originate at the HSIP show that the degree of industrial clustering in the Hsinchu area is highest in the integrated circuit and opto-electronics industries, while the computer and peripherals, and telecommunications industries, tend to cluster throughout the entire northern region.
Kung (1999) addressed the agglomeration of spin-offs in these four industries by analyzing the family trees of enterprises in the area.
6. Chu-Nan Science-Based Industrial Park (CSIP) is located in Miao-Li County, adjacent to Hsinchu City. Its construction began in 1999 and 66 companies submitted their lease/purchase applications in 2000. However, the size of CSIP is still quite limited. There are 16 companies already undertaking mass production activities in CSIP in the end of 2003. (Source: Planning Division, HSIPB)
7. Including legal and accounting, architectural and engineering technical, specialized design, computer system design, data processing and information supply, consultation, advertising and other related industries.
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Appendix Annual Increase in Operating Revenue and Newly Established Units of Knowledge-Intensive Services in the Hsinchu Area
Grand Total
Legal and Accounting
Services
Architectural and Engineering
Technical Services
Specialized Design Services
Computer Systems
Design Services
Data Processing
and Information
Supply Services
Consultation Services
Advertising Services
Other Professional,
Scientific and Technical
Services 2001 13111
(66)
170 (4)
620 (4)
3448 (12)
6574 (21)
447 (5)
1261 (11)
367 (5)
224 (5) 1999 42771
(97)
441 (4)
2357 (13)
9870 (18)
26135 (23)
50 (2)
2682 (14)
636 (10)
600 (13) 1997 27116
(63)
205 (3)
196 (4)
16638 (15)
4552 (9)
942 (2)
396 (7)
2405 (8)
1783 (15) 1995 26600
(49)
956 (13)
4403 (6)
104 (1)
13969 (9)
133 (2)
1768 (7)
4221 (9)
1045 (7) 1993 6847
(38)
652 (10)
119 (2)
2378 (4)
1661 (4)
134 (2)
1008 (4)
47 (3)
847 (9) 1991 40058
(30)
1006 (11)
37261 (6)
219 (1)
817 (1)
0 (0)
66 (1)
116 (3)
574 (7) Hsinchu
Area
1989 3760 (18)
104 (6)
130 (2)
291 (1)
1416 (2)
0 (0)
76 (1)
0 (0)
1743 (6)
26 1987 413
(7)
426 (8)
0 (0)
0 (0)
0 (0)
0 (0)
0 0)
21 (3)
214 (2) Note: ( ) indicates the annual number of newly established units.
Source：The Report on 2001 Industry, Commerce and Service Census, Directorate-General of Budget Accounting and Statistics, Executive Yuan, Taiwan
Slow Population Growth Rapid Population Growth
Figure 4 Consolidated Popu- lation Distribution*, 1984-88
Figure 5 Consolidated Popu- lation Distribution, 1989-93
Figure 6 Consolidated Popu- lation Distribution, 1994-98
HSIP HSIP HSIP
*Consolidated Population Distribution includes analyses of total population, population growth and
population density
Taiwan Highway 68 Chupei
Chunan
Paoshan Chutung Hsinchu
Tofen
Taiwan Highway 61
Freeway 3 Taiwan Highway 1
Freeway 1 Chupei interchange
Tofen interchange
ITRI
Hukao Industrial Zone
Chunan Science Park
Hsin-Chu Science Park
Figure 3 Hsinchu district: location and major infrastructure and urban characteristics
Figure 8 Annual Increase of the Number of Companies in Producer Services in the Hsin-Chu Area
（Source: The Report of 2001 Industry, Commerce and Service Census）
0 20 40 60 80 100 120 140 160
87 89 91 93 95 97 99 2001
Number of Companies
Transport, Storage and
Communication Finance, Insurance and Real Estate Business Services
Hsian- Shan District
T
Chunan
Chutung Chupei & Hukao
HSIP
First level
Second level Third level
Figure 7 Impact in Industrial Production Space
28 0
20 40 60 80 100 120 140 160
86 88 90 92 94 96 98 2000
Number of Companies
Figure 9 Annual Increase of the Number of Knowledge Intensive Services Companies in the Hsinchu Area
（Source: The Report of 2001 Industry, Commerce and Service Census）
Figure 10 Total Annual Operating Revenue Increase of Knowledge-Intensive Services in the Hsinchu Area
（Source: The Report of 2001 Industry, Commerce and Service Census）
0 10000 20000 30000 40000 50000 60000
86 88 90 92 94 96 98 2000
US$ thousand
造橋收費站
施工中
0 4 8km Freeway Interchange
Industrial Zone Urban Area Science Park
ITRI Freeway 1 Taiwan Highway1
Hukao Industrial Zone
Hsinchu Science Park
Taiwan Highway 61 Taiwan Highway 1
Hukao Industrial Zone
Hsinchu Science Park
Chunan Science Park
Freeway 1
Freeway 3 ITRI
30
Table 1 The Spatial Distribution of HSIP Employees Unit: Person
1990 1997 2000 2003
Number of
employees who originally came from:
(%)
Number of employees
who originally came from:
(%)
Number of employees who reside
in:
(%)
Number of employees
who originally came from:
(%)
Number of employees who reside
in:
(%)
Number of employees who reside
in:
(%) Hsinchu City
2690
（37.90）
18211
（32.62）
24442
（43.79）
24444
（24.29）
35395
（35.17）
34787
（33.42）
Hsinchu County
2107
（29.68）
15136
（27.12）
15673
（28.08）
20999
（20.86）
22687
（22.54）
22450
（21.57）
Other Cities and Counties
2300
（32.42）
22470
（40.26）
15702
（28.13）
55206
（54.85）
42567
（42.29）
46844
（45.01）
Total 7097 55817 55817 100649 100649 104081
Source：HSIPB, 2001
Table 2 The Commuting Trip Demand Distribution of HSIP Employees in 1997 Unit:PCU/hr
Hsinchu City Hsinchu County
Northern District
Eastern District Hsian-Shan
District Chu-Tung Chu-Pei Pao-Shan
1677 4525 403 2002 889 497
13.38﹪ 36.10﹪ 3.21﹪ 15.97﹪ 7.09﹪ 3.96﹪
Hsinchu County
To-Fen Chu-Nan
Other in Hsinchu County
Other
Cities/Counties Total
112 95 1261 1074 12535
0.89﹪ 0.76﹪ 10.06﹪ 8.57﹪ 100.00﹪
Source: HSIPB, 1998
Table 3 Technological transfer of electrical and electronic machinery in Hsinchu District and Northern Taiwan Region by Number of Companies and Value
Hsinchu District Northern Taiwan The ratio of Hsinchu District / Northern Taiwan Number of
Companies
US＄
(thousand)
Number of Companies
US＄
(thousand)
By Number of Companies
By US＄
03 53 2300 185 6250 0.286 0.368 02 67 3650 214 10750 0.313 0.340 01 46 1950 163 5030 0.282 0.388
2000 71 4500 224 9720 0.317 0.464
99 64 1840 207 5670 0.309 0.324 98 79 3280 231 6380 0.342 0.514 97 44 1350 168 2980 0.262 0.454 96 52 4650 165 6040 0.315 0.770 95 28 1000 103 2650 0.272 0.378
1994 49 1050 198 4660 0.247 0.227
Source：ITRI