財政問題與國家經濟建設研習營國家經濟建設中的科技發展

財政問題與國家經濟建設研習營國家經濟建設中的科技發展 2004.09.03

報告人朱雲鵬 中央大學管理學院教授兼台經中心主任國立中央大學台灣經濟發展研究中心

Table of Contents • The Trajectory of Taiwan’s Industrial Development • R&D Inputs in Taiwan • Room for Improvement in Industry-University Collaboration • The Promotion of Industry-University Collaboration in Taiwan • Conclusions and Recommendations

Period of radical currency appreciation Actual Index -----Trend Index I. The Trajectory of Taiwan’s Industrial Development • From 1992 to 1999, the share of manufacturing in GDP reversed its falling trend of peaking-off. The main contributing factor was the rise of the IT industry. Actual and Trend Index of Manufacturing Production in Taiwan

The success during the 1990s owed a lot to the increases in mass production of computers and other information-technology related industries. However, facing the rise of the PRC as a main hardware production base and that of India as a main software development base, as well as the rise of other developing nations aiming at catching up with the NIEs, this pattern of industrial development has to change. What worked for Taiwan during the 1990s will no longer work if Taiwan does not change.

In the next 10 years, the manufacturing industry in Taiwan has to develop toward the direction of high value-added industries, give first priority to R&D and innovation, constantly develop new products to increase the profit margins, and broaden its niche through planning and management. Such viewpoints have become a consensus at several national conferences.

In 2002 during the 23rd STAG year-end meeting, it was suggested that Taiwan’s economic base should be upgraded from the previous “incremental improvement” stage to the “breakthrough by inventions” stage. • During the new stage, it is crucial that the R&D personnel inside the universities and research institutes are fully involved in the process. During the incremental improvement stage, it was sufficient for Taiwanese manufacturers to base their technologies on personal experiences, reverse engineering, or technological transfers from abroad.

II. R&D Inputs in Taiwan *：Defence excluded **：Excluding R&D in the social sciences and humanities p：provisional Source：Main Science and Technology Indicators, 2003/01,OECD

Table 2 R&D Expenditures by Sector of Performance *：Included elsewhere **：Excluding R&D in the social sciences and humanities Source：Main Science and Technology Indictors,2003/01,OECD

Table 3 R&D Expenditures(‘02) by Type of Work Source：Indicators of Science and Technology, NSC, 2003

III. Room for Improvement in Industry-University Collaboration • Technological and vocational education institutes have provided the essential manpower to the industry in Taiwan for the past 40 years successfully. • Graduates from the technological and vocational schools strongly supported manufacturing industries development particularly during the labor-intensive stage. • However, as indicated above, the days of cheap labor are gone, and Taiwan must move on to the next stage, where high-caliber researchers must play vital roles.

3.1 Distribution of R&D Manpower Table 4 R&D Manpower Source: Main Science and Technology Indicators, 2003/1, OECD。

This ratio of R&D employees to the number of overall employees was higher than many other countries such as Canada, UK, and Norway; and much higher than the PRC in 2001.

Table 5 TOTAL R&D PERSONNEL BY SECTOR OF EMPLOYMENT AND FORMAL QUALIFICATION（1）

Table 5 TOTAL R&D PERSONNEL BY SECTOR OF EMPLOYMENT AND FORMAL QUALIFICATION（2）

It is true that 62.6% of R&D talents are employed by business enterprises, 20.39% by government, 16.19% by universities or colleges, and only 0.86% of R&D employees work for private nonprofit institutes. • However, when we talk about R&D employees with a master’s or Ph.D. degree, the percentage of these people working for universities or colleges becomes 68%, and only 13% of these worked for business enterprises.

As for doctoral researchers, they increased by 1,131 persons in 2001. Among them, 886 (78.3%) are in universities or colleges, 102 (9%) in S&T research institutes (including Academia Sinica), and 143 (12%) in business enterprises. • So doctoral researchers still prefer working in universities or research institutions.

Table 6 Researchers with a Ph. D. Degree Yr 1998 1999 2000 2001 Universities and Colleges 10,346 11,508 12,353 13,239 Total 15,947 17,063 18,069 19,200 Percent (%) 64.9% 67.5% 68.4% 68.9% Source: Indicators of Science and Technology, Republic of China (2003)

Source：Indicators of Science and Technology, NSC,2003 Figure 2 Researchers by Degree

The situation is especially serious during recent years: as higher education capacities increased sharply in Taiwan, the demand for researchers with a Ph.D. degree increased tremendously (see table 7).

Table 7 Number of Universities and Assistant or Higher-Rank Professors Yr 1998 1999 2000 2001 2002 Universities 137 141 150 154 154 Assistant or Higher-rank Professors 18,513 19,979 21,486 23,072 24,708 Growth Rate of the Above (%) 6.2% 7.9% 7.5% 7.4% 7.1% Source: Ministry of Education, Taiwan, ROC

3.2 With insufficient collaborative efforts, universities’ focuses are on producing academic papers and business enterprises on producing defensive patents • Academic R&D performs well in Taiwan. • A total of 563.88 engineering papers (EI) per million people were published and Taiwan was ranked the 7th globally in 2002. In addition, a total of 480.93 SCI papers were published per million people and Taiwan was ranked the 20th in the world.

Table 8 Number of Papers and Ranking by Nationality in EI (per million population)

Table 9 Number of Papers and Ranking by Nationality in SCI (per million population)

On the business fronts, Taiwan patents were ranked the 4th in the world among all US patents as table 10 indicates. • Total number of patents per million population in Taiwan were ranked the 2nd globally and utility patents were ranked the 3rd. • Ranked by field, the number of semiconductor process technical patents was the 3rd, medical equipment was the 9th, communication technology was the 11th, biotech and medicine technology were the 17th and the 18th in the world.

Table 10 Number of U.S. Patents Granted and Ranking by Nationality

Table 11 U.S. Patents Held Per Million of Population

So it seems Taiwan’s performance has been shining both in the number of patents and in academic publication. • Upon closer examination, however, several puzzles arise.

The first puzzle is that Taiwan’s patents are not closely associated with scientific discoveries. • Our US patents cited academic papers only 0.21 times per patent, far below US’s (4.46), UK’s (3.2), Japan’s (0.99), or South Korea’s (0.76) in 2002. • Most patents are focused on process technology and only few technology patents are based on scientific basic research.

Table 12 Patent Citation

Table 13 illustrates the proportion of academic paper publication in each field. Physics, Clinical Medicine, Chemistry, Electrical Science, and Electronics Engineering, Biomedical Science, Material Science, Basic Life Science, Computer Science, and Mechanical Engineering. Unfortunately, these papers are in general not closely associated with the demands from the enterprises.

This brings us to the second puzzle or problem, namely, the lack of industry-university collaboration, and the associated lack of Taiwan’s receipts from patens licensing. • Actually, most patents filed by Taiwanese business are “defensive” ones, which will be used in court when required. • Taiwan’s technical trade export was only 3% of import in 1999. Although it rose to 10% in 2000, the ratio is still far below those in advanced countries.

Table 14 Coverage Ratio of Technology Balance of Payments (Receipts/Payments)（％）

Figure 3 Licensing Fee and Royalty coming from R&D Project of MOEA

The NSC tried hard to promote patents filings in previous years, but the numbers were still limited as tables 15 and 16 indicates. Nowadays, the responsibility of such efforts has been shifted back to the universities.

Table 15 Number and Royalties of Technology-Transfer by NSC Grants Table 16 Number of Patents Applied and Issued through NSC Grants

3.3 Insufficient motivation for collaboration • Economists and regional scientists have long identified the contribution of university research to industrial innovation as one of the key factors driving the US economy. • Knowledge spillovers from the academic sector are thought to have had positive effects upon nearby industrial firms, especially for those operating in technology-intensive domains, even before the passage of the Bayh-Dole Act in 1980. • Additionally, the ratio of US patents filed by academic institution rose from 1% in 1980 to 1.5% in 1991, and to 3% in 1998.

Due to faster technological development, shorter product life cycle, and more intense global competition, most firms have transformed themselves in the current competitive environment. • The ability of a firm to continually acquire knowledge in order to create a competitive advantage depends upon such organizational factors as the firm’s absorptive capacity, the firm’s ability to institutionalize the knowledge acquisition process and the characteristics of the knowledge. • Some firms are better able to absorb knowledge from external sources.

University research centers and industrial firms have thus complementary resources and skills. The notion of complementary is therefore key to industry-university collaboration. • According to the National Research Council, the factors affecting competitive advantages have changed since the 1990s: interaction between researchers and users become more important than before. • Transferring knowledge between industrial firms and university research centers is important since industry is relying more heavily on these types of relationships to broaden and enhance their existing knowledge base.

Therefore, industrial firms transfer their R&D from Pasteur’s quadrant (basic research stimulated from applications) to short term, practical, application research. • University increases the research on Pasteur’s quadrant (basic research stimulated from applications) instead of Bohr’s quadrant (basic science research). • The Bayh-Dole Act passed in 1980 also helped.

For Taiwanese firms, a move from OEM to ODM or even to OBM requires spillovers from university in order to create innovative products. • However, currently there are incentive problems for university teachers to engage in industry-relevant research. • For promotion, professors prefer devoting themselves to working on readily publishable papers, which could have little to do with the practical problems of business enterprises.

IV. The Promotion of Industry-University Collaboration in Taiwan • The government has taken various measures to try to correct the problem.

4.1 The National Science Council • Large-Size Grants (average amount is 8 million, minimum is 4 million NT dollars) to industry-university (or research institutions) for collaborative research. Each year the participating enterprise is required to contribute 25%-50% to total budget, not including advanced technology licensing fee. In 2002, total application of such projects amounted to 25, of which 12 were approved. These projects resulted in patent application of 21 cases, 9 of which have been approved. Total budget amounted to 147 million NT dollars.

Small-size Grants: Between 0.5 million to 1.5 million. During 2002, a total of 1,293 applications were received, and 927 of them were approved. Total NSC funding amounted to 344 million NT dollars. • Outstanding Awards for Industry-University Collaboration: the award was designed to encourage university professors to do more in this aspect.

The NSC also encouraged schools to establish technology transfer centers/offices. A total of 20 centers were established, and during 2002 ten of them received grants at the amount of 2.5 to 5 million NT dollars each. Until February 2003, a total of 266 patents were filed and seven have been approved.

4.2 Ministry of Education • The Ministry adopted various measures, financial as well as administrative, to promote university-industry collaborations. • Six “University-Industry Collaboration Centers” were established around six main S&T universities (vocational schools, not general universities) in different areas throughout Taiwan. Preliminary results are shown in the following table 17.

Table 17 Results of Efforts to Promote University-Industry Collaboration by Ministry of Education, Jan.-July 2003

4.3 Ministry of Economic Affairs (MOEA) • The Small and Medium-Sized Enterprises Bureau has helped schools to establish Incubating Centers since 1996. More than 60 such centers were established island-wide by 2002. • Under the Department of Technology, MOEA, there are three Science and Technology Special Programs, applicable to the universities, industry, and non-profit research institutions respectively.

The aim of these programs is to grant funding to those projects that cultivate advanced technologies, including development and application of research results as well as the development of key technologies and components. • In order to promote university-industry collaboration, an increasing (though still small) share of the budget has been allocated to the first category, namely those applicable to the universities. • In addition, the MOEA in 2001 promulgated the National Science and Technology Development Plan.

財政問題與國家經濟建設研習營 國家經濟建設中的科技發展