Numbers might not lie, but they do not necessarily tell the whole truth. Such is the case with the Ministry of Science and Technology’s National Science and Technology Survey for 2020, released on Dec. 30. It touted that overall technological research and development (R&D) spending was NT$718.8 billion (US$25.95 billion), up 8.8 percent over 2019 and exceeding NT$700 billion for the first time, while the ratio of R&D spending to GDP rose to a record 3.63 percent.
R&D is vital to maintaining a country’s industrial competitiveness, which is why R&D spending in Taiwan has increased annually, rising substantially from NT$307 billion in 2006. Most of it came from the corporate sector, which increased its proportion of total R&D spending from 67.2 percent in 2006 to 82.5 percent in 2020, when it spent NT$593.36 billion. Government R&D spending fell from 31.4 percent in 2006 to 16.8 percent in 2020, the survey showed.
Of the 2020 R&D spending, NT$512.2 billion, or 71.3 percent, was devoted to technical development, up 10.2 percent from a year earlier, followed by NT$156.1 billion (21.7 percent) to applied research, up 4.7 percent year-on-year, and NT$50.5 billion (7 percent) to basic research, up 8.1 percent, the survey showed.
The ministry attributed the rising contribution of corporate R&D spending to the nation’s success in curbing the spread of COVID-19, which allowed economic activities to remain at normal levels, while rising demand for products related to 5G, artificial intelligence of things, and remote working and learning boosted corporate R&D in computers, semiconductors, electronics and optical components manufacturing.
The ministry did not say that the ratio of basic research to overall spending again fell below 10 percent for the eighth consecutive year, and the 7 percent in 2020 was a record low. In the past, the ministry acknowledged that the ratio of basic research to overall spending was lower than in most countries due to spending cuts by the government and at universities, but not in its statement last month. Perhaps if a problem persists for long enough, the ministry considers it unsolvable or becomes accustomed to it.
Basic research is the kind that requires 10 or more years to produce an innovation, and usually with no immediate, specific commercial purpose. While Taiwan has seen persistent rises in spending on technical development and applied research, the nation’s long-term competitiveness could be undermined by a weak commitment to basic research, which helps lay the foundation for technological innovation and industrial transformation. Funding for basic research in other major economies generally accounts for 10 percent or more of their national R&D budget to ensure sustained research in science and technology. The ratio in Taiwan has been less than 10 percent since 2013.
After many academics in 2016 complained about shrinking public funds for basic research and criticized the government’s increasing reliance on industrial technology R&D, the ministry vowed to increase spending for basic research by 10 percent per year, but the overall budget has still not rebounded to that level. As Taiwan’s basic research lags far behind other advanced countries, the nation must rely on research from overseas for innovative products and cannot become a scientific and technological innovation power such as Israel, Japan or South Korea.
Taiwan’s R&D has been concentrated in computers, electronics and optical components manufacturing — accounting for more than 70 percent of total R&D spending — with less devotion to other fields such as machinery, materials chemistry and biotechnology. This might result in an unbalanced industrial development in the economy, which would threaten the nation’s competitiveness in the long term.
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