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Taiwan's private sector needs more R&D funding: academic

2012/06/25 19:22:13

Taipei, June 25 (CNA) Taiwan's research and development (R&D) funding is highly concentrated in the public sector, while the private sector is lagging behind, a situation that needs to be addressed, an academic said Monday.

Hu Sheng-cheng, a fellow at the country's top research institute Academia Sinica, said except for huge enterprises like the Hon Hai Group and Taiwan Semiconductor Manufacturing Co that have made significant investments in R&D, companies in the private sector generally lack funds for research.

But even in the public sector where there is more funding, there is not much efficiency in terms of research, said Hu, a former chairman of the Council for Economic Planning and Development.

These two factors -- lack of R&D funding in the private sector and poor research efficiency in the public sector -- have contributed to Taiwan's low economic growth compared with its main trade competitor South Korea, Hu said at a forum on the economic challenges facing Taiwan.

He pointed out that South Korea spends four times as much as Taiwan in R&D.

In fact, the R&D budget of Samsung Electronics Co., South Korea's top electronics company, is more than the entire amount spent in Taiwan, Hu said.

He suggested that the Taiwan government provide independent funding for state-sponsored research institutions and national universities.

On the issue of Taiwan's efforts to sign free trade agreements (FTAs) with other countries, Hu said the government should offer clearer guidelines on how it would protect local industries that are not highly competitive.

In addition, the government needs to train more people in the field of international negotiations to help Taiwan make a breakthrough in its FTA efforts, he said.

Also at the forum, Chang Pin-tsao, chairman of the General Chamber of Commerce of the Republic of China, said that foreign investment in Taiwan has been in the decline over the past few years.

Foreign investors have gradually lost interest in the Taiwan market because the country's economic growth has been lagging behind Singapore and South Korea's over the past three years, Chang said.

Foreign investment in Taiwan totaled US$10 billion in 2007. In 2008, the figure dropped to US$6.7 billion, and to US$4.4 billion in 2009. In 2010, it dived by another 30 percent.

Chang urged the government to proactively support businesses in the private sector.

Many policymakers in the public sector shy away from supporting private businesses for fear of being accused of pandering to private interests, he said.

This has now become an excuse for officials to not to assist the private sector, Chang said.

The government should institutionalize its support system and stick to the law to avoid such accusations, he added.

The forum, organized by the United Daily News Group, brought together politicians, business leaders and scholars to identify and discuss solutions to Taiwan's economic challenges.

(By Lin Hui-chun and Ann Chen)
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