COOPERATIVE RESEARCH IN A NEWLY INDUSTRIALIZED COUNTRY - TAIWAN

Partly triggered by the successful experience of the Japanese VLSI program, Taiwan has launched several cooperative research projects, aimed at enhancing industrial competitiveness. These undertakings, however, have not performed as well as expected. Under such circumstances, the Taiwanese government is anxious to explore which factors affect the inter-industry and inter-firm variation in cooperative research activity, and to evaluate the feasibility of such R&D cooperative projects. Our analysis suggests that the more research active the industry is, the greater is the proportion of those funds allocated to cooperative arrangements. And foreign competition is the principal factor which influences a firm's decision to engage in cooperative research activity. Furthermore, we conclude that Taiwanese firms should look beyond their own R&D as the major source of new technology and become involved in cooperative research. The reasons for such a necessity are due to the accelerating pace of technological change, scale barriers in high-tech industries and Taiwan's small and medium-sized enterprise, dominant status in the industrial structure. However, a compromise which allows research goals to fall in the middle ground between research-oriented and product-oriented measures is advisable to match Taiwan's current environment. In addition, implementing a new cost-sharing principle and an appropriate incentive scheme to improve research efficiency in government-led cooperative programs are urgently needed.