Local enterprises should inject more resources into technological innovation, which is an important foundation for Taiwan's economic development, the Council for Economic Planning and Development (CEPD) said on Friday.
CEPD officials made the remarks when releasing a report on Taiwan's innovation competition performance.
The report shows that the US Patent and Trademark Office awarded patents to 242 Taiwanese items for every 1 million people from 2001 to 2005, lagging only behind the 288 items for the US and Japan's 265 items.
The CEPD attributed the performance to the government's efforts to encourage industrial technological research, development and innovation, the officials said.
Thanks to these efforts Taiwan's innovation capability has won the recognition of the International Institute for Management and Development (IMD), which is based in Lausanne, Switzerland.
In the 2007 IMD World Competitiveness Yearbook, Taiwan was placed first in terms of patent output, with a record of 373 patents for every 1,000 enterprises.
In the Geneva-based World Economic Forum's global competitiveness report for last year and this year, Taiwan was ranked eighth in the world in the innovation rating, the report said.
The Economist Intelligence Unit (EIU), part of the UK-based company that publishes the Economist magazine, also released a global innovation study two months ago saying Taiwan, which it ranked eighth most innovative country in the period from 2002 to last year, will rise two notches to become the world's sixth most innovative in the years between this year and 2011.
In its Innovation: Transforming the way business creates study, the EIU said Japan will remain the world's most innovative country by 2011, followed by Switzerland, the US and Sweden.
Commenting on Taiwan's achievement, the EIU said in the study that Taiwan, like Japan, is a very efficient innovator, as the nation can produce a lot of innovations for a low level of input.
The nation's research and development as a percentage of its GDP was 2.52 percent, compared with 3.13 percent for Japan, 2.94 percent for Switzerland, 2.68 percent for the US and 3.95 percent for Sweden, the EIU's figures showed.
The study, which compiled a ranking of 82 economies, concluded that innovation has a beneficial effect on both national economic growth and on corporate performance. The evidence of such benefits is stronger at the microeconomic than at the macroeconomic level, it said.
The CEPD officials said many Taiwanese patents are in the field of manufacturing procedure and that the country still needs to develop influential patents that set new world standards, suggesting that the government set up a plan to reinforce cooperation between the industrial and academic sectors and boost its investment in the field.
additional reporting by Kevin Chen
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