A Cross-Strait Comparison of Innovation Policy under Industry 4.0 and Sustainability Development Transition
2. Literature Review
2.1. Innovation Policy and Innovation Policy Model
2.2. Industry 4.0 Literature
- Interoperability—machines, devices, sensors, and people that connect and communicate with one another.
- Information transparency—the systems create a virtual copy of the physical world through sensor data in order to contextualize information.
- Technical assistance—both the ability of the systems to support humans in decision-making and problem-solving, as well as the ability to assist humans with tasks that are too difficult or unsafe for humans.
- Decentralized decision-making—the ability of cyber-physical systems to make simple decisions on their own and become as autonomous as possible.
2.2.1. Industry 4.0 in China
- Innovation driven: focuses on core innovation which can manipulate industry progress to facilitate innovation mechanisms and facilitate interdisciplinary coordinative innovation. Digitization, networking, and intelligentization of the manufacturing industry, with critical technology breakthroughs, may chart a new course of innovation for the Chinese manufacturing sector.
- Quality improvement: quality control and assurance is the mainstream for establishing a strong manufacturing nation. Quality enhancement is not just on product or service, but enterprise management systems, technology R&D, and branding are all critical issues with respect to quality. Regulations, monitoring, standards systems, and an advanced quality management culture will all be needed to improve the entire market environment, including authentic business operation.
- Green development: sustainable industry development is the cornerstone of building a strong manufacturing nation. Promotion of energy-saving and environmental protection technologies/skills/equipment will accelerate green tech development and industry upgrading. Developing recycling economics, such as green energy, smartgrid, water-recycling, and especially the recycling efficiency advancement, will enhance the green manufacturing system and lead industry to an eco-friendly development hereafter.
- Structure optimizing: industrial structure amendment is pivotal for this revolution. More resources will be allocated to manufacturing with advanced technology; the traditional manufacturing sector is set for an industrial upgrade; the manufacturing industry will undergo transformation with models and concepts borrowed from the service sector. From this perspective, industry and enterprise clusters with core competencies and high-quality, and high-effectiveness, will be incubated to fit the structure amendment, which may help map optimal industrial developments and further consolidate future strengths in the manufacturing sector.
- Talent education: talent pool construction is another crux. Building an integrated and comprehensive education system for enterprises to recruit, employ, foster, and develop long-term competence is necessary. Under this tide of change, talents need not just professional skills, but copious interdisciplinary knowledge, business operation, and co-working ability.
2.2.2. Industry 4.0 in Taiwan
- International cooperation reinforcement: promoting global heavyweights to team up with leading Taiwanese companies. Bilateral cooperation between flagship companies will encourage Productivity 4.0 and push for an exchange platform to organize Industry 4.0/Productivity 4.0 international forums on a regular basis for cross-regional cooperation and exchanges of experiences.
- Technological capability enhancement: Introducing Industry 4.0 and experienced experts to help Taiwan’s companies, in particular SMEs, adopt Productivity 4.0 and corresponding solutions or platforms for higher productivity. A cooperation of an industrial–academic-research institute will assist in establishing common communication standards in compliance with Productivity 4.0/Industry 4.0.
- Closer collaboration with strategic partners: Taiwanese companies have their leading position in the global ICT manufacturing industry and are ready to serve as partners of global enterprises in the implementation of Industry 4.0. Closer collaboration with global partners and suitable companies would achieve global market expansion and gain Productivity 4.0 experience.
3. Methodology and Data Survey
Data Survey and Pattern Matching
5. Conclusions and Implications
5.1. Analysis of Results
- Policy dimension comparison: Taiwan and China both focus on three policy dimensions, among which ‘environmental-side’ draws the most attention, followed by ‘demand-side’ policy, with the ‘supply side’ considered to be of lesser importance. Although the weightings are not identical, both sides of the Taiwan Strait concentrate on the same policy dimensions. Both China and Taiwan tend to focus more on environmental-side policies because industrial competition advantages may be enhanced through upgrading the industrial environment. These policy tools will be helpful toward developing industry innovation and the domestic market environment by allocating financial resources and developing political support to the industrial structure.
- Policy tools level:
- ‘Political tools’ holds a special position for both governments: China and Taiwan governments seem to have similar preferences for political tool usage. Political tools hold the number one position both in China and Taiwan. We refer back to the definition proposed by Rothwell and Zegveld (1981) and their causal process of policy tools presented in Figure 1. These political tools will improve the R&D activities and indirectly support industry development and innovation. With respect to Industry 4.0, this means that China and Taiwan’s governments tend to adopt this policy tool first when cultivating industry innovation and accelerating emerging technologies, talents, and mechanism infusion .
- Over 90% of resources go to the top four policy tools: Although the priority is not exactly the same, the top four policy tools for both governments are the same, which are ‘political tools’, ‘public service’, ‘legal and regulatory’, and ‘education’. China allocates 92% and Taiwan distributes 94% to these critical tools. Resource allocation is similar for China and Taiwan.
- ‘Public enterprise’ is not emphasized: According to the research results, the two governments focus less on public enterprise. This result is not new for Taiwan industrial development, but novel for China. Facing myriad challenges, the tide of the new ‘retreat of the state, advance of the private sector’ may be formulating.
- Several differences after analysis: The Chinese authority stresses less on ‘financial’ and ‘taxation’ tools; conversely, the Taiwan government concentrates less on ‘information’ and ‘procurement’ tools.
- Analysis of policy implications:
- China Manufacturing 2025: Strategically, the Chinese government puts more emphasis on critical industrial and technological breakthroughs, organization implementation mechanism amendment, and the establishment of complete financial supporting systems. The execution of policy tools matches the innovation-driven structure optimization and quality-improving key points within the overall “China Manufacturing 2025” program.
- Taiwan Productivity 4.0: Relatively, the Taiwanese government concentrates more on industry transformation and scenario establishment—be it manufacturing, service, or agriculture sectors. Integration of the industrial–academic-institute system is another emphasis which covers education, new venture spin-offs, and international cooperation.
- In China, establishing a fair competition market to facilitate industry development is the core of the ‘legal and regulatory’ section. The ‘public service’ part emphasizes assisting SME development.
- ‘Public service’ in Taiwan puts more focus on building systematic structures, and scenarios for industry transformation, manufacturing, service, and agriculture industries are all included.
5.2. Discussion and Conclusions
Conflicts of Interest
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|Dimension||Policy Tools||Policy Statements and Description||Total No.||%|
|Supple Side Policy (9)||Public enterprise||0||0%|
|Scientific and technical||To enhance national manufacturing innovation capability (1); enhance basic industry ability (1)||2||2%|
|Education||To complete multi-level talent education system (6)||6||5%|
|Information||To complete multi-level talent education system (1)||1||1%|
|Environmental-side Policy (73)||Financial||0|
|Legal and regulatory||To enhance national manufacturing innovation capability (2); enhance brand quality construction (4); promote thorough restructuring of the manufacturing sector (1); deepen transformation mechanism (2); create a fair competition environment (8); complete multi-level talent education system (1); render manufacturing more open to foreigners (2)||20||19%|
|Political||To enhance national manufacturing innovation capability (1); infuse informatization and industrialization (4); enhance basic industry ability (2); enhance brand quality construction (2); Green manufacturing (1); highlight area breakthrough (10); promote thorough restructuring of the manufacturing sector (3); develop servicing manufacturing and producer service (1); raise international level (3); deepen transformation mechanism (4); complete financial supporting policy (6); increase fiscal policy support (4); complete multi-level talent education system (1); render manufacturing more open to foreigners (1); complete organization execution mechanism (10)||53||49%|
|Demand-side Policy (25)||Procurement||To increase fiscal policy support (1)||1||1%|
|Public services||To: enhance national manufacturing innovation capability (1); infuse informatization and industrialization (1); develop servicing manufacturing and producer service (2); deepen transformation mechanism (2); complete financial supporting policy (3); increase fiscal policy support (2); complete multi-level talent education system (1); complete SMEs policy (7); render manufacturing more open to foreigners (1)||20||19%|
|Commercial||To enhance national manufacturing innovation capability (1); enhance brand quality construction (1)||2||2%|
|Overseas agent||To render manufacturing more open to foreigners (2)||2||2%|
|Dimension||Policy Tools||Policy Statements and Description||Total No.||%|
|Supple Side Policy (20)||Public enterprise||0||0%|
|Scientific and technical||To control core tech self-development ability (2)||2||2%|
|Education||Industry in-service talent education (6); industry–academia linkage and interdisciplinary talent education (6); encourage international practical talent (3); foster industry practical talent (3)||18||17%|
|Environmental-side Policy||Financial||New venture incubation and technology localization-manufacturing (1)||1||1%|
|Taxation||Industry transformation and upgrade policy (1)||1||1%|
|Legal and regulatory||Int’l ICT linkage hub and standard making (3); build product, technology, process verification system (4); industry transformation and upgrade policy (1)||8||8%|
|Political||To enhance vertical enterprise value chain smartization capability (3); industry horizontal value chain smartization capability (3); build industry counselling system (3); spin-off new venture policy (1); introduce int’l related enterprise for local emerging industry (1); enhance key component and system self-development capability (3); introduce int’l product or service for building self-development capability (1); control CPS core tech self-development ability (1); introduce manufacturing transformation system framework (3); industry transformation scenario establishing-manufacturing (5); industry counselling group (2); industry transformation scenario establishing-servicing (4); new venture incubation and technology localization-servicing (1); agriculture transforming framework (1); industry transforming scenario establishing-agriculture (10); develop critical core technology (3)||45||44%|
|Public services||To assist local company links into the global supply chain (2); spin-off new venture policy (2); introduce int’l-related enterprise for local emerging industry (2); introduce int’l product or service for building self-development capability (1); control CPS core tech self-development ability (3); industrial–academic-institute collaboration on recruiting int’l experts (3); industry transformation and upgrade policy (3); new venture incubation and technology localization-manufacturing (2); servicing industry transformation framework (4); new venture incubation and technology localization-servicing (2); agriculture transformation framework (2)||26||25%|
|Commercial||Spin-off new venture policy (1)||1||1%|
|Overseas agent||To assist local company links with the global supply chain (1)||1||1%|
|Supple Side Policy||Public enterprise||Innovation by state-owned enterprises and institutions; focusing on developing new industries; pioneering in the use of new technology; joint developments with private enterprises.|
|Scientific and technical||Engaged in scientific and technical research; support for research institutes; developing learning society, professional organizations; offering research grants in support of industrial innovation.|
|Education||Government support for education and training at all levels, including general education, higher education at university, and post-graduate levels, vocational education, apprenticeship programs, and continual education.|
|Information||Government support in developing information networks of business intelligence for private enterprises, business centers, libraries, advisory, and consultancy services, cloud databases, and liaison services.|
|Environmental-side Policy||Financial||Government support and subsidy for industrial innovation for specific projects, joint financial investments, provision of equipment loans, arranging third-party financing, loan guarantees and IPO assistance, and export credits.|
|Taxation||Tax exemption and reductions for industrial innovation for specific projects, R&D tax credits, capital gain tax exemption, personal tax allowances.|
|Legal and regulatory||Patents and intellectual property management, regulatory agendas for environmental and health control, accreditation and certification management, anti-trust regulations and social justice supervision, awards and prizes, and protocol standards.|
|Political||Strategic planning of national innovation programs, regional development policies, awards and prizes for innovation, support of mergers and acquisitions, and think-tank and public consulting for policy exploitation, and political and legal systems for investment.|
|Demand-side Policy||Procurement||Central or local government purchases and contracts, R&D contracts, and technology transactions via government procurement.|
|Public services||Infrastructural and institutional developments in science park development, facilitating market transactions, banking service, maintenance and management of innovation diversity and applications, provision of health insurance and services, transportation and telecommunication, social transformation.|
|Commercial||Trade agreements, tariffs, currency regulations, commercialization, and industrialization of innovation.|
|Overseas agent||Overseas representation for international trade and transactions, developing official organizations in support of internationalization of innovation.|
|Supple Side Policy||Public enterprise||0||0||0||0|
|Scientific and technical||2||2||2||2|
|Legal and regulatory||20||19||8||8|
|Priority||Policy Tool||Weight||Priority||Policy Tool||Weight|
|2||Legal and regulatory||19%||2||Public services||25%|
|4||Education||5%||4||Legal and regulatory||8%|
|5||Scientific and technical||2%||5||Scientific and technical||2%|
|10||Public enterprise||0%||10||Public enterprise||0%|
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Lin, K.C.; Shyu, J.Z.; Ding, K. A Cross-Strait Comparison of Innovation Policy under Industry 4.0 and Sustainability Development Transition. Sustainability 2017, 9, 786. https://doi.org/10.3390/su9050786
Lin KC, Shyu JZ, Ding K. A Cross-Strait Comparison of Innovation Policy under Industry 4.0 and Sustainability Development Transition. Sustainability. 2017; 9(5):786. https://doi.org/10.3390/su9050786Chicago/Turabian Style
Lin, Kuan Chung, Joseph Z. Shyu, and Kun Ding. 2017. "A Cross-Strait Comparison of Innovation Policy under Industry 4.0 and Sustainability Development Transition" Sustainability 9, no. 5: 786. https://doi.org/10.3390/su9050786