5. OVERVIEW OF THE ICT SECTOR
5.2 The Performance of the ICTs industry and Demand conditions
In fact, during the past 20 years Taiwan has emerged as a leading producer of ICT products. The
World Economic Forum (WEF) published the Global Information Technology Report 2005-2006,
in which Taiwan ranked 7th in the Networked Readiness Index (NRI) out of 115 economies,
gaining 8 places up from previous year. In terms of all main sub-indices covered in each dimension,,
Taiwan as well ranked in the top five worldwide, placing 3rd for Market Environment, placing 3rd
for Individual Readiness, and 4th for Government Usage. Also noteworthy is the significant move
up to 10th place form 23rd in the Environment Component Index, a further evidence of the overall
positive environment for ICT development in Taiwan. In Usage Component Index (covering
Individual Usage, Business Usage, Government Usage), Taiwan again leapfrogged into 5th place in
the 2005-2006 Report, an improvement for the 11th place in 2004-2005. Indeed,
technology-intensive industries, mostly in ICT, now make up over half of Taiwan’s economy,
compared with less than a quarter in the late 1980s. Taiwanese manufacturers collectively produce
well over half the global supply of the devices that make up the core of the worldwide ICT industry
and infrastructure (Dutta & Lopez-Claros, 2005, 2006).
5.2.1 Technology Performance of ICTs Industry
Table 10.8 shows that the R&D investment of domestic industries mostly centres on the ICT
industry; the proportion of ICT R&D expenditures to whole-enterprise innovation expenditure
reached 70.3 per cent in 2004. However, the density of R&D investment in Taiwan’s high-tech
manufacturing and ICT industries is relatively lower than other countries. This phenomenon may be
related to the operational mode of Taiwan’s ICT industry, mostly OEM/ODM; though the
operational scale of ICT-relevant industries is quite large, innovation investment is still relatively
low.
Table 10.8: R&D Expenditure and Personnel in the ICT Industry, 1999-2004
Year
R&D Expenditure (Million NT$)
Percentage of BERD
R&D Personnel R&D Researchers
Headcount FTE Headcount FTE
1999 72,128 59.0% 43,867 36,861 22,163 20,358 2000 78,483 62.4% 49,107 40,484 24,044 21,858 2001 85,893 65.9% 51,069 43,034 26,609 24,992 2002 94,914 68.0% 57,328 46,789 30,265 27,157 2003 104,555 69.5% 63,882 51,895 32,940 30,002 2004 118,032 70.3% 69,421 57,686 36,410 33,385 Source: Indicators of Science and Technology (Page: 38, Table 2-2-7), Republic of China, 2005
Note: The range of ICT is based on the definition of the OECD Frascati Manual, 2002; FTE= Full-Time Equivalents.
1) Information
The mobile computing age is predicted to have three major impacts: digital content will grow
explosively and diversely; integrated digital convergence will enter into mainstream services;
services will continue to go online and become more user-friendly. These three trends will
accelerate the development of user-friendly, smart, mobile and secure living environment
technology. The development of various types of information, communications and video products
will speed up the diffusion of the mobile computing age and user-centric applications and services.
Recent performance in relation to R&D project funding and manpower is set out in Figure 10.6.
Source: 2005 Yearbook of Science & Technology (NSC, 2005) Notes: Funiding is given as budget numbers.
1550.4 Funding (NT$ Million) Manpower (Man-Year) Funding/Manpower
(NT$ Million)
Figure 10.6: Information R&D funding and manpower
2) Telecommunications
Society is expected to rely on broadband networks to sustain a thriving knowledge economy in the
coming age of deregulation, globalization, and digitization. Besides maintaining a competitive
telecommunications market and actively promoting the development of the broadband network
infrastructure so as to develop a sound ICT development environment, the Taiwan government also
aims to continue to pursue forward-looking telecommunications policies based on new ways of
thinking. It had promoted the reform of existing controls, and intended to accelerate the integrated
development of the telecom and broadcasting industries. In this way it is expected that Taiwan will
be transformed into an internationally competitive high-tech island. Recent performance in relation
to R&D project funding and manpower is set out in Figure 10.7.
Source: Source: 2005 Yearbook of Science & Technology (NSC, 2005) Notes: Funiding is given as budget numbers.
5.4 Funding (NT$ Million) Manpower (Man-Year) Funding/Manpower
(NT$ Million)
Figure 10.7: Telecommunications R&D funding and manpower
3) Electronics
With support from the government, the nation’s semiconductor industry has achieved impressive
results. Because the domestic electronics and information product industries have been able to
obtain steady supply of key parts and components, Taiwan has become one of the world’s leading
information product suppliers. However, in the face of stiff cost competition and increasing
emphasis on capital investment, the domestic semiconductor industry must boost its core
competitiveness in the future by focusing on emerging areas characterized by innovation and value
creation. As for the display industry – the other “Two Trillion and Twin Stars” industry – Taiwan is
currently ranked second in the world in terms of Flat Panel Display (FPD) manufacturing capacity,
and it has become a leading global high-tech product manufacturing and service centre. In order to
increase Taiwan’s technological autonomy further in this area, the government has implemented a
FPD promotion programme that should create a sound foundation for the development of the
display industry. Recent performance in relation to R&D project funding and manpower is set out in
Figure 10.8.
Source: 2005 Yearbook of Science & Technology (NSC, 2005) Notes: Funiding is given as budget numbers.
2341.4 Funding (NT$ Million) Manpower (Man-Year) Funding/Manpower
(NT$ Million)
Figure 10.8: Electronics R&D funding and manpower
5.2.2 Industry Performance of the ICTs Industry
According to the “National Science and Technology Program Implementation Regulations” drafted
and approved by NSC in 1998, as response to Taiwan’s major socioeconomic and employment
needs, and in order to integrate up-, mid- and downstream R&D resources, there are three
programmes related to ICT, respectively Telecommunications, Digital Archives, and e-Learning.