Manufacturing servitization and revitalizing industrial clusters: a case study of Taiwan's LIIEP

Abstract

In the recent years, the ‘manufacturing servitization’ has been put at the center of Taiwan's industrial policies in order to solve the low value-added problem. In pursuit of regional development rebalance, industrial and technology policies are also hired to revitalize weak industrial clusters by using R&D grants and leveraging the capabilities of various public research institutes. Few studies examine the existence of potential policy dilemma in the redistribution of R&D resources to achieve purposes of the industrial upgrading by ‘manufacturing servitization’ and achieving regional development rebalance by reallocating R&D resources toward low-development regions or sectors. Drawing on the project office dataset of the ‘Local Industrial Innovation Engine Program’, with 907 samples, this study intends to provide with empirical evidence to address that ‘manufacturing servitization’ has been influencing the formation of R&D alliances further to allocating R&D resource bias to highly developed regions and industrial sectors, rather than revitalizing industrial clusters. Accordingly, there may remain a potential controversial problem for the industry policy to achieve both purposes of improving value-added and balance development across regions or sectors.

Keywords:

• R&D alliances
• R&D institutes
• policy dilemma

JEL:

• O25
• O32
• O38

Disclosure statement

No potential conflict of interest was reported by the author.

Note

Notes

1. CSIST's technological advantage mainly comes from its defense technologies.

Additional information

Notes on contributors

Meng-Chun Liu

Dr. Meng-Chun Liu, a PhD in Economics from Monash University in Australia, serves as Research Director of Mainland China Division at Chung-Hua Institution for Economic Research in Taipei. His researches focus on the regional influences of the R&D networking and investment by Taiwan-based companies in China. He also teaches mainland China's economy, foreign direct investment and technology policies at universities.