Last month, the government reiterated its pledge to invest almost $610m of its National Development Fund in the development of biotechnology and said it would raise an additional $922m for a venture capital fund in the biotechnology business.
The National Development Fund has already invested $240m in the sector since it was set up 2002, with $110m invested directed to biotechnology enterprises and $130m in domestic companies through venture capital, according to statistics from the Council for Economic Planning and Development.
Taiwan aims to make biotechnology as successful as its globally renowned high-tech industries. This goal has been outlined in various government plans and programmes in the last ten years. In 1995, the government established a continually developing roadmap to drive the sector forward. It is also one of the two "star" industries in the "Two Trillion, Twin Star" programme, which falls under the Challenge 2008 National Development Plan. The other is the digital content industry.
Speaking at the opening of BioBusiness Asia Conference last month, President Chen Shui-bian qualified biotechnology "the star industry of the 21st century". In an indication that Taiwan has everything it needs to make it a global leader in this domain, he said the country offers a "flexible and innovative network of small and medium-sized enterprises" as well as "a thriving science and technology sector and a high-quality medical care system (...) at the heart of the Asia-Pacific market."
The term 'biotechnology' covers a vast range of fields from pharmaceuticals to agriculture and is defined by the ministry of economy as when living organisms or parts of organisms are employed "to make or modify products, improve plants or animals, or develop microorganisms for specific uses".
Last year, the government convened the BioTaiwan Committee Meeting, which resulted in three fields being spotlighted for development: agricultural biotechnology, medical equipment and biotechnology pharmaceuticals. It is expected these industries will help Taiwan become a "major base for genomic medicine research" and a centre of clinical research for the region.
In June, new legislation was passed to encourage investment in the biotechnology sector. The legislation provides for a number of tax incentives to encourage investment in what already constitutes an $800bn global market. This includes allowing up to 35% of biotechnology companies' expenses for personnel training and research and development (R&D) to be offset against enterprise income tax over a period of five years.
In addition, it makes it legal for workers in government research institutions to serve as executives in biotechnology companies, an effort designed to make it easier for companies to attract investor capital.
Tax exemptions on income earned from shares have also been introduced. Executives of biotechnology companies will not have to pay any income tax on income earned from shares until the shares are transferred to new shareholders.
Research institute Academia Sinica called the legislation an industry "milestone"and said it represented a "consensus in the government, industry and academia that Taiwan has to shift from the traditional labour-intensive industry to the high-risk, high-profit biotech industry".
Progress was also made in June on the pending Nankang Biotechnology Park project, when the Executive Yuan (the cabinet) allowed the ministry of national defence to free up 25 hectares of land for its construction. The land will be ready for construction by 2012.
The park is one of three major biotechnology industry hubs planned by the government. Another is in Zhubei in northern Taiwan, while a third is to be located in the Kaohsiung Science Park (formerly known as the Southern Taiwan Science Park (STSP) Luchu Base) in southern Taiwan. These will join the ranks of more than 10 biotechnology parks or special zones within science parks that already exist across Taiwan.
The strong commitment from the state to biotechnology has prompted global and local investment in the sector. Government sources place the annual combined public and private sector investment in biotechnology at around $609m, compared to a little over $30m five years ago. The government predicts these figures will continue to rise. Sales made by the entire biotechnology sector represented $4.9bn in 2005, up 10% on the year before, according to the Industrial Development Bureau. Pharmaceutical companies produced 39% of those sales, while another 37% came from medical device manufacturers and 24% from innovative technologies.