Taiwan has pegged biotechnology as a key plank for future economic growth, but analysts said the government is doing too little, too slowly to kick start the industry.
They said the promised investment by the government is woefully inadequate and the government polices are not taking shape, leaving the future direction for biotechnology in Taiwan looking vague.
While policies could still take shape this year, analysts were not hopeful that the Taiwanese government would be willing to increase the size of its promised investment given the deepening economic gloom in the country.
First quarter economic growth was the slowest in 26 years and economists have predicted the second quarter will be even worse. Second quarter exports showed their steepest decline in 25 years.
The local biotech industry currently consists of a handful of companies making glucose reagents and studying Chinese herbal medicine. But, following the success of its world leading computer chip industry, President Chen Shui-bian (陳水扁) has vowed to make Taiwan a "green silicon island" by adding biotechnology. In the past it has pushed biotechnology and faced similar criticism that it failed to come up with solid policies.
This time, the government has offered tax benefits, a five-year NT$20-billion (US$571 million) investment plan, assistance in new product development and other incentives to attract companies.
Chen promised to invest NT$10 billion (US$285 million) annually on research and development over the next five years.
But these promises do not hold much sway with analysts.
"Compared to other countries like the United States, Taiwan's NT$10 billion per year is relatively small," said Wang Wei-min, a senior analyst at Polaris Securities Group (
"It usually costs around US$500 million [NT$17.5 billion] and takes at least 10 years to develop [one] new drug in the US, and I wonder how Taiwan will allocate its money," said Wang.
Experts attending a biotechnology conference in May organized by the government advised Taiwan to double its annual biomedical research budget to NT$20 billion. In an indication that more government money might not be forthcoming, Taiwan last month eased stock market requirements to allow the listing of biotech firms which have successfully developed "products or technologies" with market potential, but which may not yet be profitable.
Industry leaders and analysts welcomed the move, but urged the government to spell out its policies clearly and quickly because the criteria for which companies qualify for the listing were not clear.
"Just take one thing. Who should be the one to define which product or technology has market potential?" said one biotech analyst at Capital Securities Corp (群益證券).
It is essential that government policies are clear so that industry can at least head in the same direction, said Ellson Chen (
"Corporates' efforts coupling with government polices are vital for the biotech industry's success," he said.
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