Factors of external influence on science and technology policy of the government of Taiwan

In spite of diplomatic isolation Taiwan is deeply involved into the global economic system. Taiwan's policy of science and technology development was influenced by external powers in different ways. First of all, Taiwan has a highly export-oriented economy, and development of high-technology industries would be impossible without large-scale export of high-tech product to the global market. In 1982, high-tech products made up only 18,3% of Taiwan's exports, in 2005 this share increased up to 50%. Second, Taiwan S&T policy experienced political, economic and ideological influence of the USA. Taiwanese technocrats, who graduated from American universities, were the advocates of the Western economic theories. Moreover, they maintained a lot of personal contacts with political establishment and business in the USA. These relationships allowed them to attract American experts and top-managers for consultations that contributed to the S&T policy formulation and its effectiveness. Technology transfer from the Radio Corporation of America (USA) gave an important impetus for independent science and technology research within Industrial Technology Research Institute (ITRI) which became the driving force of high-tech industry in Taiwan. Another important source of influence is the People's Republic of China. Before the 1980s when no economic and trade ties existed between two sides of the Taiwan Strait, the threat from the mainland consolidated governing elite in Taiwan and made it focus on economic development. Economic reforms started in the PRC in the late 1970s, its rapid industrialization and rise of regional competition forced Taiwan to pay more attention to high-tech industries. On the other hand, in the 1990s Taiwanese firms started to move production facilities to the PRC. Starting from 1996, the government of Taiwan restricted investments in high-tech production in PRC, while giving more preferences to high-tech companies in Taiwan. It also urged Taiwanese government to continue active S&T policy, although the whole economic system of the island was under the deregulation process. However, in the beginning of 2000s, the restrictions were loosened to let the local business reduce costs. Nowadays, competition of the PRC and the possible hollowing out of the most competitive industries and innovations is one of the major challenges for Taiwan.

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