The Department of Industrial Technology (DIT) was reorganised from MOEA’s Office of S&T advisors in 1993. It is an internal department of MOEA dealing with the task of promoting industrial technology through the enforcement of ‘MOEA’s special project
for the research and development o f industrial technology’ S;
thereafter special technology project--STP STP is a government-funded effort
on industrial technology R&D with a special focus on the field of a high technical level, confined as applied research development, key technology development and key component development. STP started in 1977 as a national effort to promote industrial technology, but has been greatly increased its weight and budget since late 1980s. To hasten industrial upgrading, the government has targeted ten emerging industries, eight key technologies and sixty-nine key parts and products in the 1990s.
MOEA hopes to promote industrial technical development and strengthen industrial competitiveness which would eventually contribute to assist stable economic growth and to advance living quality. The characters of STP on developing specific techniques and products are based on market niches, technology-intensiveness, practical technology, or generic and experimental technology. As the budget of STP is from MOEA, the aims of these projects are expected to improve the economic performance of the industrial sector. Therefore, STPs are highly product-oriented and market- oriented.
Table 4.6 ÌVIOEA's Special Technology Projects -- Inputs, 1991-96 B u d g e t I N T S B illion) P ro je c t |N u m b e r | M a n p o w e r |P e r s o n | 1991 79.5 48 3741 1992 108.4 (3 6 .3 ) 56 4 1 0 4 (9 .7 ) 1993 1 1 3 .6 (4 .8 ) 58 4 3 1 0 (5 .0 ) 1994 108.1 (-4 .9 ) 63 4 5 4 9 (5 .5 ) 1 9 9 5 1 1 6 .5 (7 .8 ) 71 4751 (4 .4 ) 1996 1 3 1 .2 (1 2 .6 ) 76 5 1 6 9 (8 .8 )
Source: DIT, 1996c: 14 & 15 ()= Annual growth rate.
Table 4.7 1993 STP Expenditure Allocation by Project Classification N T $ t h o u s a n d P e r c e n t a g e E le c tro n ic s & I n f o r m a tio n 5,127,621 45 .1 4 M a c h in e rie s & A u to m a tio n 1,818,335 16.01 M a te r ia ls & P ro c e s s 9 1 5 ,5 7 9 8.06 F o o d & M e d ic in e 1,011,762 8.91 E n v ir o n m e n t & R e s o u rc e s 50 5 ,0 9 6 4.45
G e n e r a l 1,979,858 17.43
T o ta l 1 1,358,251 100.00
Source: DIT, 1993: Figure 4
Table 4.8 1995 STP Expenditure Allocation and Manpower Input by Institute N T $ m illio n P e r c e n t a g e M a n p o w e r D IT 197.5 1.70 84 IT R I 7410.3 6 3 .6 3 2 9 8 0 C IS 1019.2 8 .7 5 413 C h in a T e x tile I n s titu te 298.1 2 .5 6 119 D e v e lo p m e n t C e n te r f o r B io te c h n o lo g y 63 1 .4 5 .4 2 2 60 A u to m o tiv e R e s e a r c h T e s tin g C e n te r 22 8 .2 1.96 6 6 M e ta l I n d u s tr ie s D e v e lo p m e n t C e n te r 529.1 4 .5 4 170 F o o d I n d u s tr y R & D In s titu te 311.5 2 .6 7 116 I n s titu te f o r I n f o r m a tio n I n d u s tr y 818.5 7 .0 3 4 2 9 O th e r s 20 2 .7 1.74 114 T o ta l 11.646.5 1 0 0 .0 0 4751 Source DIT, 1996c:40
In 1990s, STPs are characterised as increasing resources inputs, heavy investment on electronics-related technologies, with ITRI as the largest STP recipient. Table 4.6 shows a major growth of STP resources in terms of budget, project, and manpower between 1991-96. In 1993, electronics and information industry shared 45% of total STP expenditure due to their economic centrality in exports (Table 4.7). ITRI, the biggest public research institute for industrial technology with the most of its internal research organs connected to emerging industries, had been entrusted with 63.63% of
total STP budget in 1995 amongst more than ten MOEA's research affiliates (Table 4.8). It reveals that STPs are for ‘winners'.
D1T itself is not a research organisation, which is responsible for formatting industrial technology policy and for planning STPs. The industrial technology policy is in accordance with the IP from the IDB (Interview No.6). This is to say, IDB decides the developmental strategy of a specific industry, while the DIT’s STP concentrates on the technological development of the future needs of a specific industry.
The IDB was established in February, 1970, as the most important agency in charge o f industrial affairs. The formation and implementation o f IPs are the main functions of IDB. In a nominal sense, IDB followed CEPD's (Council for Economic Planning and Development) guideline for the initiation of detailed sectoral and general IPs, and its proposed IPs have to be evaluated by CEPD. CEPD is an advisory body to the Executive Yuan without administrative authority of its own, whose major work consists o f reviewing economy-related policy proposals or investigating policy issues generated in other ministries or in the Executive itself. IPs suggested by CEPD are readily approved by the Executive because most CEPD councillors are cabinet members. However, in a realistic term IP is formatted by IDB technocrats, those who have direct contact with industrial sectors. Hence, IDB technocrats have a better understanding of the problems faced by a specific industry in IP formation than if the IP is designed by politicians or the CEPD staffs, who lack the contact experience with individual firms or industries. Close linkage between IDB technocrats and the industrial sector reduces the problem o f poor quality information required in IP-making and contributes to the effectiveness of IP implementation. This explains the outstanding performance of Taiwan's IP compared with those of other developing countries.
Chart 4.9 IDB Organisational Chart IDB Division 1 -Section 1: M e ta lInd. - S2: Machinery Ind. - S3: Transportation Vehicle Ind. Accounting Office Secretary Office Management Information Service Center Personnel Office Service Center Division 2 Division 3 ■ S1 : Electrical Ind. ■S2 Electronic Ind S3 Instrument Ind Ind. Automation S4: Computer 4 Communication Ind. ■S1: Petrochemical Ind. • S2 Specialty Chemical Ind ■ S3: General Chemical Ind
Division 5 Division 6 Division 7
■ S I: Ind. Land Planning 4 Development - S2 Ind. Land Acquisition
4 Sales
- S3: Administration of Ind. Zones 4 Land
■ SI: Devising Ind. Policy, Planning 4 Management of Special Programs, Personnel Traning - S2 International Cooperation - S3 Formulating Financia 4 Tax Measures • S I: Administration of Ind., Revisied 4 Compilation of Industnal Regulations • S2: Labour Administration 4 Assistance on Ind. Safety, Hygiene 4 Tech. - S3. Assistance on Ind.
Pollution Control. 4 on W aste Reduction
Division 4
• S1 : Textile Ind. • S2: Food Processing Ind ■ S3 Consumer Goods Ind
S4 Construction Materias Ind.
All sectoral detailed IPs and problem-solving IPs are formulated within IDB’s functional divisions directly. The organisational chart (4.9) of IDB demonstrates the different divisions that are in control of distinct industrial tasks. Division 1-4 undertake the administration of specific industries and their relatively sectoral IPs, while Division 5-7 tackle general IPs in relation to industrial development. Three internal offices maintain the management of logistical matters. The Information Service Center provides all information in relation to industrial affairs including regulations, standards, incentives, measures and funds; Service Center accepts all applications for assistance, incentives, advice, loans and funds.
IDB has a strong administrative capacity to put policies into action. The coverage of its functions varies from trade protection to financial incentives. Its capacity, generally speaking, includes setting up lists o f tariffs and imports control, to issue
import licences, to encourage domestic purchasing agreements, to operate the duty draw-back schemes, to approve applications for loans from various special loan scheme and for loan guarantees, to list those firms qualifying for fiscal incentives, to target industries for R&D support, and most importantly, to identify industries and firms to be targeted (Liu, 1993:Chapter 3 & 5). It also helps to establish orderly export marketing agreements in industries and overseas price negotiations in sensitive sectors like petrochemicals (Wade, 1990:202).
The organisational advantages of IDB can be understood from two perspectives. First, IDB has the responsibility for trade policy and the authority to redistribute financial incentives. This gives IDB more power than it would have if trade policy and the authority for giving financial incentives were the duties of other agencies. Basically, the Board of Foreign Trade is an administrative department, which cannot initiate any trade policy by itself, in particular, the measures of trade protection, but it has to follow instructions from IDB on industry-related matters. Besides, IDB, as the competent authority on the operation of funds and the distribution of financial incentives, led it to shift resources between sectors with less inter-departmental friction in the process of IP implementation and planning. IDB’s strengthened functions covering the field o f trade and finance, which are generally divided horizontally within the same hierarchy, makes for a better integration of various functioning policies into IP.
Second, IDB plays the roles of policy-initiator, policy-maker and policy- implementor which are different functions normally performed by vertical divisions within the same hierarchy. In the theory of public policy, the actors which decide on policy are generally different from those who are responsible for policy implementation. IDB is an exceptional case of one body playing three independent roles. Therefore, the coherence of industrial policy in the different stages of the policy process can be moderated (policy itself, policy outcome and planned schedule) by IDB entirely. Under these circumstances of converging vertical and horizontal functions, the organisational advantages of IDB serve as the principal impetus in supporting Taiwan’s continuing
industrial development.
2. STATE POLICIES SUPPORTING INDUSTRIAL TECHNOLOGY