Taiwan Revitalizes and Revive Obsolete Industrial Parks

Dated transportation, sewage, public lighting and fire protection are common issues

Understanding that sharpening national competitiveness for sustainable development amid rising globalization is a serious concern among countries, the Taiwanese government has been actively revitalizing its obsolete industrial parks over the past year, with local R&D bodies, such as Metal Industries Research & Development Centre (MIRDC), involved to help local traditional industries upgrade into higher-end, value-added production.

So far, 61 industrial parks directly administered by the Ministry of Economic Affairs have been developed around Taiwan since 1960, which underpin the island's economy.

According to statistics compiled by Industrial Development Bureau (IDB), more than 11,700 companies with about 550,000 employees in these parks achieved output value of NT$6 trillion in 2011, equaling 43% of the total by local manufacturing industries. Of the resident companies, over 85% were small and medium-sized, and mostly engaged in metal products and machinery as traditional manufacturers.

However, after more than a half century of development, many of these parks are becoming outdated in infrastructure and need to be upgraded. According to MIRDC, 55 have been running for 15 years and longer, 32 of which in operation over three decades.

To revitalize these dated industrial parks, IDB has spent NT$12 billion improving infrastructure and upgrading production in 54 parks from 2009 through 2011 as part of Taiwan's national development policies, aiming to rejuvenate environments to attract more investments and create jobs

IDB's efforts are paying off, as 620 companies have been enticed to move to these retrofitted parks, along with 162 existing enterprises encouraged to expand factories and upgrade facilities as of the end of March 2011, when new investments totaled about NT$153.4 billion, helping to generate additional output value of about NT$134.3 billion and create 23,706 jobs.

Guidelines

According to IDB, the revitalization and upgrading plans were carried out in compliance with several guidelines, including improving environmental security and hazard mitigation planning in the parks for enhanced quality of manufacturing environments and national competitiveness; reinforcing the parks' positive images and information exchanges by building better infrastructure and more supplementary facilities to facilitate manufacturing activities and meet insiders' requirements; making good use of idle land in the parks to speed industrial development and diversification and maximize generation of added value; and tapping collective efforts of local governments, enterprise and residents to make industrial parks fit local urban development.

IDB says that backward, worn infrastructure, including transportation, sewage systems, public lighting, and fire protection systems, was commonly seen in these obsolete industrial parks, which had generally been improved to refresh environments and images. In enhancing industrial cluster development and production upgrades in the parks, the government tapped companies outside and local R&D institutes to build synergies, and also formed several alliances engaged in shifting to higher-end production.

For sustainable development of the revitalized industrial parks, IDB proposed that the central government should consistently dedicate resources to making these industrial parks not just productive, but also educational and recreational, which could be achieved by working on optimizing utilization of park land in cooperation with local governments and enterprises where the parks build different facilities according to local urban development blueprints.

Promote Industrial Cluster

To promote industrial cluster development, IDB commissioned MIRDC during 2010-2011 to form 6 alliances in different obsolete parks.

The MIRDC came up with two main modes to develop distinctive industrial clusters according to different features and manufacturing activities of these industrial parks: one is to urge core, large companies to develop prospective products in partnerships with smaller peers and contract suppliers; and the other is to push forward horizontal integration of manufacturers to develop new, sharable techniques and broaden use of applied technologies, as well as work out suitable standards and efficient procedures for product certification.

One example is that MIRDC helped Taiwanese yacht hardware makers clustering in Dafa Industrial Park in southern Taiwan to upgrade production and develop prospective products, also forming the Yacht Hardware Added-value Enhancement R&D Alliance in 2010, composed of Taiwan's largest yacht hardware supplier, Aritex Products Co., Ltd., along with a system integration supplier, precision casting maker, steel yacht furniture producer and a yacht builder in the park, aiming to take advantage of synergy among these partners to work on electromechanical integration solutions for yacht equipment and furnishing.

The plan is working as the members have already worked out some yacht equipment that is innovated with electromechanical integration for better interoperability. One example is a touch-operated gas stove, which features a sensor and electric control system, with pilot flame lighting the gas under a cook-top as an electric grill. The design helps to shield flames from wind, while enhancing yachting life with electronic applications.

In addition, the members also developed hydraulic boarding ladders which can be integrated into central control systems, which calls for precision casting, electric control and system integration to secure safety and functional reliability during yacht cruising.

Interviewed by CENS, Mark Tsai, project manager of Knowledge Management Application Service Section of MIRDC's Industrial Upgrading Service Department, said, “IDB officials aim to upgrade Dafa Industrial Park to enhance output value, and yacht construction and marine hardware manufacturing is a mainstay sector in the park,” implying that the most effective way to revitalize obsolete industrial parks is to help major companies vertically integrate to go upmarket. (SC, March 2013)