Instituciones Financieras que utilizan el Sistema SUCRE

While most firms hesitated whether to choose a lap-top PC or NPC to develop, some domestic companies (Acer, Twinhead, Cha-cha) had started the R&D for NPC because of the trend to miniaturise the size and to reduce the weight of the portable PC, but progress was limited. Meanwhile, ITRI decided to advance its lap-top PC technology to NPC technology because the technology needed would be developed by Packaging STP. ITRI’s position as a public-sector research organisation, allowed it to apply to the IDB for R&D finance to conduct the development of NPC. However, the IDB denied this kind of product-oriented R&D because government funding is assigned to the development of frontier and basic technology. The IDB also recognised the potential market of NPC and the importance of rapid commercialisation of NPC to match the demand of market, so it advised ITRI to search the private sector for support for the further development of NPC technology.

Besides, Taiwan’s industrial policy makers were keen to see new and smaller computer firms benefiting from the market niche created by the NPC, so it led to an open-to-all policy for the private sector to join the NPC Alliance. The rationale behind IDB’s preference for an open-to-all policy rather than a large/competitive-firm-only policy is threefold. Firstly, the investment o f NPC R&D was huge and not every firm could afford it. If the government does not give the smaller firms a chance to join NPC R&D consortium, they would never have shared a piece of the NPC cake due to high R&D entry barriers in both financial and technological terms. Secondly, the government would like to see more domestic firms accepting NPC technology rather than only a few large firms under the consideration of technology diffusion. Obviously, the effects of

transplanting technology into the majority of industry is preferable to its monopolisation by some large firms. Thirdly, ITRI had failed to attract large firms to the consortium. In the initial stage of planning an ITRl-firms cooperative project, the CCL ITRI intended to look for 5-8 larger companies to invest NTS3-5 million each to cover an estimated budget of NTS30 million. However, the larger firms deemed NTS5 million too much since the development o f a successful NPC is still an uncertainty.

That is not to say that SMEs would be more competitive than large firms in the eyes of IDB. The innovatory performance in industry judged by the size of firm is highly sectorally influenced, but SMEs can play an important role in the emergence of new technology-based sectors of industry (Rothwell & Dodgson, 1994)41. In addition, the flexibility of SMEs in relation to export and manufacturing was one of important factors underlying Taiwan’s economic growth. Given that SMEs still shared more than half of total exports, the government expects that the flexible operation of SMEs can catch the fast-changing market requirements since the principle of fast follower is the strategy for Taiwan’s products survival in the high-tech industry.

One thing that has to be noted here is that the ITRI is a subordinate of the MOEA, in particular, the main financial resource is from the government budget. Any projects of the ITRI should be agreed with the MOEA, and this is also true in the case of the NPC Alliance. Thus, the guidance and advice from the IDB/MOEA should strongly influence the direction o f ITRI's project. Even the NPC Alliance is a contract between ITRI, the Taiwan Electric Appliance Manufacturers’ Association (TEAMA) and firms, IDB remains the ultimate monitoring body.

The Japanese Toshiba was the first NPC on the market in February, 1990. The appearance of Toshiba’s NPC has accelerated the decline of the lap-top PC and started the battle for the market of the NPC. It is certain that the NPC will become the main 43

43 According to Rothwell & Dodgson (1994), small firm advantages are mainly behavioural (little bureaucracy, effective communication, fast marketing reaction, and fast learning capability), while those of large firms are mainly material (high market power, high technical manpower, finance, and ability to cope with government regulations and to defend patents).

product for portable PCs. The idea of developing a uniform NPC was advanced by the office of planning/ITRl ten days after Toshiba launched its NPC on the market, but ITR1 still awaited the response of the private sector. Some firms feared that the NPC might become tomorrow's lap-top PC and the palm-top PC would be the leading product. However, many firms showed their interest in joining the alliance because CCL has a technological team with experience in design and development of the lap-top PC and a logistic team supporting market information and the movement of related technology. Moreover, a new STP with a year budget of NTS 116 million concerning the packaging technology for electrical and computer products would be launched in July, 1990.

In the computer industry, the quality of the progress of developing a NPC differs between firms in terms of their technological capability, financial ability and market awareness. Some bigger firms have invested in the development of NPC, most firms have entry barriers in the technology.

In general, the development of NPC in the private sector is not promising. Three factors explain the difficulties faced by the Taiwanese computer industry at that time (S. Wang, 1991:40). First, the technology related to the development of a NPC is a highly intensive construction which involved not only the idea of 'how to put so many tiny things into a limited space’, but also the interior design for the efficient functioning of a PC and the reshaping of many components. Second, no technicians in the private sector were familiar with NPC technology, not to mention not having experience of constructing and designing a NPC. Last but not least, there is no product standard to follow. This is the biggest problem confronted by the computer manufacturing sector. Many components (liquid crystal displayer/LCD, hard disk, keyboard, etc.) available in the market do not fit in with NPC product design, so firms might develop their own components. Because o f different standards between firms’ products, they have to enlarge their orders for safe storage. No intra-industrial division o f labour means that

are supposed to be done by many other component suppliers. This is in contrast to the case of desk-top PC where a centre-satellite supply system has been well-developed. All these had led to an expensive investment and a slower development of the product.

The CCL proposed a plan for 'the uniform set’ so as to use a uniform NPC to reduce investment risk, to promote an intra-industrial division of labour, and to produce a standard NPC in the computer industry. This proposal with the assistance of TEAMA was announced in May 1990. It hoped to recruit 15-35 firms to join the NPC Alliance with each firm contributing NTS 1.2 million. This immediately met with an enthusiastic response from the private sector. In the beginning, the CCL planned to develop a 286 NPC and gave training courses on the construction and interior design to participating firms. When the number of participating firms reached 30, it was decided that an extra prototype model should be given to each firm. Finally, there were a total of 42 firms joining the NPC Alliance by 27th of June, 1997. Meanwhile, the ITRI and the TEAMA gave a name to this uniform set as ‘Teamate’44. The funds raised by the Teamate project exceeded ITRI’s expectation. It was a total fund of NTS50.4 million equivalent to about US$2 million. This extra budget made the CCL decide to upgrade Teamate from 286SX to 386SX while the 286 model was still the dominant PC in the market. Even if this decision did not make the development of Teamate a step ahead of other competitors, at least it led Teamate to be a very competitive product.

The contract o f NPC Alliance was signed in July 1990 with 42 participating firms. However, there were some firms that hoped to join the alliance after the alliance started work. Eventually, there was a total of 46 participating firms in the NPC Alliance in which four late comers should pay an extra 50% joining fee.

The participating firms can benefit from the Teamate project in several ways.

44 Tcamate { £ & ) in Chinese means ’a friend for tea (lime)'. The name of Teamatc reflects its connection to TEAMA and its market segment aiming at second set o f PC for using outside business environment. NPC has been defined as a second set of PC for user in its earlier concept of marketing, which is the same idea as the second car for leisure purpose in a family, but the share of NPC on the PC market has increased in a way that it can not be seen as a secondary product on the PC market.

They receive a technical report at each development stage: access to production models created by the alliance: motherboard designs: samples of mass production modules: participation in training courses: and a Teamate. In addition, IDB required that each firm should organise a ‘learning by doing' team in order to cultivate some experts in the industry in case the project failed to create a commercially viable product, at least the aim of technology diffusion could be realised through a learning process. This made NPC technology diffused through learning by doing teams organised by the private sector, which has had an effect on the cultivation of experts.