The military's Chun Shan Institute of Science and Technology (CSIST) is to be divided into three structures in the next few years, a change expected to have a great impact on the defense industry, defense sources said yesterday.
The former structure will operate in three different forms, including a restructured institute, a number of non-profit research foundations and several spin-off companies.
Though the institute will continue to exist it will retain only a small number of its original functions. The change will be the most important the institute has undergone since its inauguration in 1969. Under the change, the majority of institute personnel and resources will form non-profit research foundations and a number of spin-off companies operating independently of one other.
The non-profit research foundations, to be modeled on the Industrial Technology Research Institute under the Ministry of Economic Affairs, are to be constructed from the institute's major research and development wings, which have formed its backbone to date.
This backbone boasts several decades' worth of experience in the development of key military technology relating to aircraft and missiles among other areas.
After becoming non-profit research foundations, the departments will be effectively out of the institute's control.
Several spin-off companies are also to be born from a number of lesser departments. These will focus on the development of technology used for both military and civilian purposes. They are to be for-profit organizations.
With most of the resources and personnel moved elsewhere, the institute will retain less than 2,000 personnel to maintain its remaining role of planning. The institute now has a staff of over 10,000.
An institute official, who spoke on condition of anonymity, said the change is expected to have a significant impact on the defense industry.
"Strictly speaking, Taiwan does not have the sort of defense industry seen in other countries," the official said.
"The institute is the core of the industry. Now that it is to be broken into three different parts, the defense industry that it has helped to sustain will be at risk of collapse," he said.
"Even if the institute continues to exist, it will only be a shadow of the original structure. With a staff of less than 2,000, what can it do?" he asked.
The official said he was not the only person to have had pessimistic feelings about the future of the institute and that many of his colleagues simply did not have the chance to voice their concerns publicly.
The armaments bureau of the Ministry of National Defense did not agree with this assessment.
An official at the bureau said that the transformation was a necessary process for the institute to become more productive and efficient.
But quite a number of institute officials suspected that the real motive behind the move might be to take advantage of the break-up to meet a goal of cutting the country's military personnel across the services by 2007.
The roughly 8,000 institute personnel to be separated from the institute and incorporated into the offshoot foundations and companies are to be counted among the reductions to military personnel, defense officials said.
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