THE STUDY OF KEY SUCCESSFUL FACTORS ON …...THE STUDY OF KEY SUCCESSFUL FACTORS ON FOOD...

THE STUDY OF KEY SUCCESSFUL FACTORS ON FOOD

BIOTECHNOLOGY INDUSTRY IN TAIWAN

Ming-Lang Wang1, *, Kang-Wei Wang

2

[email protected],

*, [email protected]

1Department of Industrial Management, Chung Hua University, Associate Professor

30012, No.707, Sec.2, Wu-Fu Rd., Hsinchu City, Taiwan, R.O.C.

2Medical Affairs Bureau Ministry of National Defense, Director, Comptroller Office

10462, No.409, Bei-An Rd., Taipei City 104, Republic of China (Taiwan)

*Corresponding author [email protected]

Abstract

Biotechnology industry is one of the most valued industries in the future, covering agriculture, food, health care,

environmental protection, mechanical and electrical information, materials and chemical industries. From these fields, the

biotechnology industry has become part of our lives. Not only has Taiwan actively promoted the biotechnology industry

to become a major industry, but countries around the world have also listed biotechnology industries as a priority boosted

industry. In recent years, in response to the issue of the "Food safety storm", Taiwan has formulated relevant regulations

and combined with the R&D of the biotechnology industry, so that the public can eat food with peace of mind. First of all,

this research aims to explore the key factors affecting the development of Taiwan's food biotechnology industry, and to

explore the trend of this industry and key issues through interviews with experts and questionnaire surveys of industry

stakeholders; Secondly, at the same time, through the integration of expert interviews and analysis of questionnaire results,

we have a better understanding of the trend and vision of the food biotechnology industry, and put forward relevant

conclusions on the research topics based on various theories and analysis results. Finally, the study found that there are

four key factors affecting the food biotechnology industry development in Taiwan which are: (1) funds investment in

research and development, (2) understanding of consumers’ demand, (3) how to maintain competitive edge in the market,

(4) the support of government policy (ex. funds support and promotion).

Keywords: Key Successful Factors; Biotechnology Industry; Food Biotechnology; Industrial Trends

Ming-Lang Wang, Kang-Wei Wang, Int. Jou Eco. Res, 2020, V11 i1, 79 – 98 ISSN:2229-6158

IJER –January -February 2020 available online @ www.ijeronline.com

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mailto:[email protected],*

mailto:[email protected]

mailto:[email protected]

1. Introduction

To make the biotechnology industry

becomes one of Taiwan's emerging industries. In

recent years, Taiwan has successively promoted

various measures to assist the development of

the biotechnology industry. In February 1996,

the "Ministry of Economic Affairs

Biotechnology and Pharmaceutical Industry

Development Promotion Group" was established.

The primary purpose of this promotion group is

to act as a channel for communication,

coordination and integration of various

departments. In the same year, the National

Health Research Institutes were established and

the National Health Research Institutes were

established, too. The foundation of the

biotechnology industry has been strengthened

(Julie C.L. Sun, 2003). Simultaneously, Council

for Economic Planning and Development

(Executive Yuan)、National Science Council

and Council of Agriculture set up biotechnology

parks in the northern, central, and southern

regions of Taiwan to strengthen regional

development and effectively increase regional

capabilities and technologies.

After nearly two decades of efforts, there

has been a remarkable growth in Taiwan's

biotech industry with actively promoting by both

public and private sectors. In 2014, the total

revenue of biotech industry in Taiwan was NT $

288.6 billion. The total market capitalization of

all listed companies in biotech industry over that

of the total market increased from 0.85% in

2010 to 2.16% in 2014. With the efforts of the

government and the industry, the revenue of

biotech industry increased 51%, comparing NT

$ 191.2 billion in 2007. Applied Biotechnology

Industry can be divided into five major areas:

food biotechnology, agricultural biotechnology,

environmental biotechnology, specialized

biotechnology and biotechnology service

industries. Applied biotech industry increased to

NT$ 82.2 billion in 2014, from NT$ 38.6 billion

in 2005. The compound annual growth rate is

about 8.76%, which is the fastest growing

industry, included the fast growing health food

and health sector, driven the growth of applied

biotechnology industry (Jia-Yi Fan, 2016).

The overall view of the current status of

Taiwan's biotechnology industry, both the

government and academia believe that the

promotion of policies related to the

biotechnology industry and the bio-economy

needs to strengthen cross-ministerial

coordination, and to reinforce cross-sectoral

resource sharing, information circulation, and

the expansion of biotechnology to agriculture,

industry, health and other fields. As far as the

current development trend of Taiwan's

biotechnology industry is concerned, Taiwan has

advanced agricultural technology, such as

cultivation technology, breeding technology,

biological science, etc., can be combined with

"productivity 4.0" by sensing technology、

intelligent robot (IR) 、 Internet of Things

(IoTs)、Big data analysis and other forward-

looking technologies. Construct a smart

production 、 marketing and digital service

system to increase the value-added of applied

biotechnology industries such as agriculture,

food, and environmental biotechnology.

With the gradual improvement of

biotechnology industry structure, the capital

market has also injected sufficient funds into the

biotechnology industry, which has increased the

amount of investment in the biotechnology

industry year by year. In the future, it will be line

up with biotechnology policies and various

investment incentives provided by the



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government to encourage domestic and foreign

manufacturers to invest in Taiwan, and assist in

raising R&D and operating funds to accelerate

the development of biotechnology industry.

Simultaneously, according to the domestic and

foreign biotechnology industry development

profiles, the industry will complete the blueprint

of the biotechnology industry development and

developing three major strategies, including

developing featured products, and creating

flagship companies, and expanding investment.

It is expected that the revenue of the

biotechnology industry will reach NT $ 500

billion by 2020, 5 flagship biotechnology

companies with revenue of NT $ 10 billion will

be born, and Taiwan will become a hub, well-

known for distinctive product and high-quality

technology in biotechnology and medicine

internationally (Biotechnology Industry in

Taiwan, 2015).

At present, many countries are enhancing

economic construction and development, hoping

to develop biotechnology industry with high

added value, low pollution, and high economic

benefits. The biotechnology industry has been

listed as a national key sector for development.

Taiwan also actively promotes the biotechnology

industry, and has set up biotechnology industrial

parks in the northern, central, and southern

regions. It is hoped that the clustering effect of

the industry can be brought into play, and

expected that the planning of the biotechnology

park will allow companies to assist in research,

strengthen the basic structure of industrial

development, and also balance the development

of Taiwan's biotechnology industry.

As the biotechnology industry covers a

wide range, and food biotechnology is closely

related to our lives, "eating" is no longer purely

to intake what our body needed, but also

includes related health foods derived from the

need for physical health. Research and

development of these related products not only

make the company profit, but also improve

people's health and prevent physical diseases in

advance. This research takes Company B as an

example. The purpose of this study is to

understand the current development status of the

food biotechnology industry, and to understand

the development process of the company by

interviewing the professional managers of

Company B. This study will explore the

development and prospects of the food

biotechnology industry based on theories of

expert interviews and questionnaire surveys of

industry professionals.

2. Literatures Review

This chapter explores the use of the

biotechnology industry in life. The applied

biotechnology industry is one of the three main

industries in biopharmaceuticals. The applied

biotechnology industry covers 7 areas –

regenerative medicine, food biotechnology,

agricultural biotechnology, special biochemicals,

biopharmaceutical services, environmental

biotechnology, and emerging biotechnology. The

object of this study is the food biotechnology

industry, which is one of the areas of applied

biotechnology industry (Yearbook of Applied

Biotechnology Industry, 2016). According to the

Yearbook of Applied Biotechnology Industry,

the scope of products and services includes: (1)

microbial nutrition health products; (2)

functional ingredients nutrition health products.

This study explores the current status and vision

of Taiwan's food biotechnology industry with

three core frameworks: future development,

industry SWOT analysis, and strategic planning.

Then, it explores why the biotechnology

industry is so important in the economic system



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(Biotechnology Industry in Taiwan, 2011).

According to the Department of Health

announced that apply for healthy foods good for

health (including controlling blood lipid,

improving gastrointestinal function, dental

health, and immune system, reversing

osteoporosis, preventing aging, controlling blood

sugar, anti-fatigue, and promoting iron

absorption etc.,). Improving gastrointestinal

function and controlling of blood lipid are the

main items for manufacturers to apply for

certification. Anti-fatigue, reversing osteoporosis,

and promoting iron absorption are newly applied

items for manufacturers. As the government

gradually opens up certification programs, the

number of certifications will continue to increase,

and it will also attract biotechnology and

pharmaceutical manufacturers to invest in the

development and certification of healthy foods

(Biotechnology Industry in Taiwan, 2009).

Due to the development of modern medical

technology, Taiwan is gradually moving towards

an aging society. With the increase of the elderly

population, the demand for related health foods

has increased (Fann & Hsu, 2010). The total

consumption of health food increased to NT$

188.4 billion in 2014 from $ 156 billion in 2013.

Kircher et al., (2004) pointed out that the elders

are more likely require more nutritious, healthier

and softer food because they need special

nutrition and requirements. In response to the

advent of today's people's focus on healthy diets

and the advent of an aging society, the

government has also actively developed related

health foods and formulated related health needs

and diet analysis policies for the elderly.

Secondly, the rapid development and

commercialization of Genetically Modified

Organisms (GMO) has become the focus of

international concern in recent years. APEC and

WTO and other international conferences

continue to discuss this related issue. Early

genetically modified crops were mainly resistant

to herbicides and pests. Recently, genetically

modified crops with improving nutritional

quality have gradually appeared in market. Their

demands have expanded from farmers to

consumers. Food and nutrition-related industries

have inevitably had to pay attention to this trend

(Chii-Cherng Liao, 2005). The "Summary of

analysis of domestic health food output value

and industry in 2011" proposed that any health

foods or functional foods that provide special

physiological functions and health effects are in

the scope of health foods. In addition to "health

foods" certified by the Department of Health,

"functional foods" with special functions,

"dietary supplements" that supplement nutrients,

and "special nutritional foods" that meet the

needs of special physiological conditions, such

as foods for patients. Therefore, health foods

are not limited to "health foods" certified by the

Department of Health. In the broadest definition,

any health foods provide health or functional

effects are in the scope of biotech foods.

Although this definition is somewhat different

from the biotech food of this study, it is roughly

similar to each other (Shu-Yen Chiang, 2015).

Taking food biotechnology as an example, food

is indispensable in our daily life, and all

countries attach great importance to it.

Government departments actively combine the

food and biotechnology industries to develop

health foods and lactic acid bacteria functional

foods for the general public for safety and

healthy.

2.1 Definition of Biotechnology

Alison L. Van Eenennaam

(2017) argued the scope of biotechnology covers

using biological procedures including biological



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cell characteristics, components or metabolites

from microorganisms, plants, or animals etc. to

make products, or applying molecular-level

technologies to improve traditional production

procedures, and the science of improving human

life (Biotechnology Industry White Paper, 2015).

There are different international definitions of

biotechnology, for example: The United Nations

Convention on Biological

Diversity (CBD) defines biotechnology as

"biotechnology is the use of biological systems,

living organisms or derivatives to produce or

modify products for specific uses, or any

application technology of the process." OECD,

consist of the United States, Canada, Japan,

Britain, the European Union and

other 30 countries, defined biotechnology as "the

application of science and technology to living

organisms as well as parts, products and models

thereof, to alter living or non-living materials for

the production of knowledge, goods and

services. Industrial Development Bureau, in

accordance with the world trend of opinions,

defined biotechnology as "the use of molecular

biology, cell biology, immunology, genomics

and proteomics and other life science and

genetic engineering, protein engineering, cell

engineering based on technologies such as tissue

engineering, science and technology for research

and development, manufacturing or improving

product quality to improve the quality of human

life" ( Biotechnology Industry in

Taiwan , 2015) . Raju P. (2016) claimed

that biotechnology is the concept upon technical

level, which can be applied to various traditional

industries and emerging areas. It is not easy

define due to the indistinguishable scope of the

industrial sub-sectors.

Due to the wide range of technical

applications and different classifications, there

are many industries that can be introduced and

combined with biotechnology. Most of them

involve organisms at the level of manufacturing

or technical applications. Among them, medicine,

agriculture and food are the main application,

but it does not mean these existing industries are

completely included in the biotechnology

industry. Additionally, the definition

biotechnology in Taiwan is not very clear, it has

caused some misunderstandings about

biotechnology (Jack J. Chen, 2001).

2.2 Food Biotechnology and Future

Development

Liao (2005) proposed that the food industry

is a sustainable and essential industry for

people's livelihood. Taiwan's annual food

consumption is about NT $ 1.5 trillion, of which

the catering industry is about NT $260 billion,

food processing is about NT $ 450 billion,

observed by long experience, although the food

industry output value will also change with the

socio-economic growth and decline. But

compared with other industries, the food

industry is relatively stable. Biotechnology is

one of the cutting-edge technologies following

petrochemical, aviation, nuclear energy, and

information in the 20th century. Its application

has expanded to the fields of medicine and

health care, food, agriculture, and environmental

protection, and it is the most promising

technology area in the 21st century. The

challenges it will face in 21st century includes:

(1). R&D trends in the food sector include

the following three key points:

1. Food safety, 2. The appeal of health

benefits and 3. Highly applied biotechnology.

(2). The application of biotechnology in

the food industry is as follows:

1.The scope of biotechnology applications in

the food industry, 2. The advantages of



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biotechnology in the food industry, 3.

Improvement of food processing, 4.

Development of new products, 5. Improvement

of food quality and safety inspection, 6.

Treatment and utilization of food waste (Chii-

Cherng Liao, 2005).

2.3 Industrial Competitiveness (SWOT analysis)

This study applies SWOT analysis. The

analysis originated in 1980's and proposed by

Professor Heinz Weihrich in University of San

Francisco. Strengths and weaknesses analysis

focus on the strength of the company itself and

its comparison with competitors, while

opportunity and threat analysis focus on changes

in the external environment and possible impact

on the company. When conducting the analysis,

all internal factors (i.e. advantages and

disadvantages) should be brought together, and

then external factors should be used to evaluate

these external forces (MBA Encyclopedia,

SWOT Analysis, 2019).

Strengths: 1. Biotechnology industry talents,

2. Beauty and health food favored by

young people,

3. Across a wide age range in the

market.

Weakness: 1. Higher cost,

2. Longer period for food experiment,

3. Insufficient experience.

Opportunity: 1. Climbing demand for food due

to aging society,

2. More and more people attach

importance to food,

3. Government supports.

Threat: 1. Many competitors in the industry,

2. Many choices in market,

3. Genetic modification issues,

4. Food safety issues.

2.4 Strategic Planning

Comparing international standards of food

bio-economic development, the US National

Bio-economic Blueprint focuses on reducing

regulatory barriers, cultivating the talents,

strengthening research, accelerating

commercialization, and attaching importance to

food safety; Germany integrates biotechnology

and the food industry and attaches importance to

the development and application of bacteria and

food innovation; Japan’s “Cool Japan” strongly

promotes Japanese brands, expands overseas

markets, and builds the foundation for industrial

innovation. It empathizes on disease prevention

and universal design foods and other new

product development and sales, and at the same

time, it uses ICT such as electronics transaction

and cloud technology to stabilize food supply

(Board of Science and Technology, BOST, 2016).

In order to strengthen the management and

supervision of health foods and protect the rights

of consumers, the Ministry of Health and

Welfare in Taiwan announced the Health Food

Control Act in 1999. Unregistered food for

inspection shall not be named as health foods. At

the same time, the Ministry of Health and

Welfare also announced the evaluation of

healthy foods as a basis for manufacturers to

apply for health food review. The authority also

established health food specifications for Anka

and fish oil (Biotechnology Industry in Taiwan,

2015).

3. Research Methodology

This study adopts secondary analysis、

expert interview and questionnaire survey to

explore the vision of Taiwan's biotechnology

food industry development.

3.1 Secondary Data Analysis

Secondary data analysis is an analysis

method that further analyzes existing data to



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derive conclusions or interpretations. The data

sources include research reports, industry

operating data, case studies, books, journals,

published data on the Internet, statistics

surveyed by the government and publications.

The use of data can provide the value as for the

researchers to develop the concept of research,

and sometimes it can be the actual data for

researchers to verify hypotheses, or for

exploratory research (Pei-Er Han, 1998). In

addition to the secondary data, the study

conducted expert interview and questionnaire

surveys. It is hoped to better understand the

future development trends and prospects of the

food biotechnology industry in Taiwan, and at

the same time explore the general situation of

the industry from various aspects, and get

relevant answers to in-depth questions (Ruo-

Huan Yu, 2004).

3.2 Expert Interview

An interview is a conversation between two

or more people. The essential requirement is that

there should be at least one interviewer and one

or more interviewees. In fact, an interview is a

method for gathering information. If properly

managed and arranged, the interviewer can

inquire about the other party's ideas and get the

answers they want. Besides, interviews can be

formal or informal, and can be stepped into the

core of the topic through the exploration of

structured, unstructured, or open-ended

questions. More mature topics can also be

explored through standard, structured or closed-

ended questions. As for in-depth interviews,

according to the definition of scholars (Yang et

al., 2000), in-depth interviews refer to obtaining

important factors through interviews, and these

important factors are not simply the results of

general face-to-face interviews.

The purpose of the in-depth interview is to

analyze the true insider, true meaning, impact,

future development and solution of the interview.

Generally speaking, in-depth interviews can take

more time than general interviews, but the

results obtained can more deeply describe the

nature of issue as a basis for further analysis.

However, the in-depth interview is mainly to

explore the true feelings of the interviewee. It

can be used for in-depth topics for journalists',

psychiatry, psychological counseling, education,

and ethnographic anthropology (Wan, 2004).

3.3 Interview with Food Biotechnology Industry

Company B

(1). What is the reason and motivation for your

company's establishment?

Answer: Company B was founded in 1999

with a capital of approximately NT $ 250

million. The first beginning B company

produced medical equipment. Under various

circumstances, the company will come into

contact with the biotechnology industry, and

then develop skin care products. Regarding food

biotechnology, in the beginning, the company

exported health products to the United States. It

was about 2012 that the local marketing

companies started to need foods with health

effects, so that company B was asked to develop

and produce health food.

(2). What is the biggest challenge the company

face in the early stage of operation? How did the

managers overcome the problems?

Answer: In beginning selling products to

the United States, Company B started with

capsule foods. When animal capsules were

imported into the United States, the United

States established strict food regulations due to

the previous outbreak of mad cow disease in the

United States. Company B spent nearly half a

year to understand the local regulations and the

relevant food regulations in the United States.



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Finally, it solved the problems by understanding

the U.S. regulations.

3. Why the company built the factory in Hsinchu

Science Park? Are there any special

considerations?

Answer：Company B chose to set up a

factory in Hsinchu Science Park, mainly because

the technology industry is denser in this area.

Hsinchu Science Park has convenient

transportation. Additionally, there are National

Chiao Tung University, National Tsing Hua

University and Industrial Technology Research

Institute(ITRI). There are many talents, and it is

one of the major science and technology towns

in the country to develop high-tech foundry

industries. It has also gradually become the

center of science and technology industry in

northern Taiwan.

4. What is your major considering if need to

cooperate with external company?

Answer: Quality. According Company’s

perspective, if the products are poor in quality

from marketing, engineering, manufacturing to

customer retention, it will affect their purchase

intention. This is a negative impact for the

company. From the perspective of sustainable

operation, products with good quality is the

fundamental to maintain the company's image.

5. Based on your understanding of the future

development on the food biotechnology industry

in Taiwan,

which products have more potential?

Answer: As far as company B is concerned,

the Taiwan market is not optimistic, because the

market scale of Taiwan is too small. Healthy and

functional products have more potential to sell

abroad. In addition to health foods after illness,

the company also focus on health foods for

preventing disease in advance.

6. Does the certification of health foods mean

the quality assurance of health effects? Can it

increase trust for the public?

Answer: From the standpoint of company B,

the certification of health food is necessary. It is

necessary to obtain the certification of health

food first if declaring any effects of the product.

This is a basic regulatory requirement. It is

against the law if selling uncertificated products

in market. The company should increase the

public’s trust. After all, it is a nationally certified

food, and the people will feel safe to take it.

7. As far as you know, do Taiwan's health food

industry transferred technology abroad?

Answer: No, at present, because Taiwan

lacks raw materials, most of products rely on

imports, and foreign technologies are better than

domestic, so there is no technology transfer.

8. Is there a transformation of traditional

industries into biotechnology industries, and

then research and development on health foods?

Answer: As far as company B's experience

is concerned, there is no such issue at present,

because the machinery and equipment are

different, and the operator may have some

different concepts in the process of operation. In

practice, there have been no cases in which

traditional industries have been transformed into

biotechnology industries.

3.4 Questionnaire Survey

The questionnaire survey method is a

general and concrete operational process. It must

adopt objective and systematic scientific

methods. In application, it is necessary to

understand the implementation process and

sequence in order to collect reliable and effective

data (Ming-Qing Wu, 1991). This method allows

responders to answer in a convenient time, and

the questionnaire has anonymity, standardized

questions, and a wide range of implementation.



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This study uses expert interview 、

secondary data analysis and literature review to

establish a research structure, and then through

the literature to explore the relevant information

and design questionnaire. It is hoped that the

results of the questionnaire survey will be used

to understand the trend and vision of the food

biotechnology industry in Taiwan, and how the

company will maintain a competitive edge and

competitiveness in the industry for future

evaluation and research. Through the initial test,

questionnaires are officially issued and collected,

and then use SPSS software to analyze. Beside,

this study adopts Likert 5-Points Scale, the

instrument was validated in advance through

several personal interviews with Food

Biotechnology Industry managers on site,

scoring the subjective cognition an "1" for very

unimportant, and a "5" for very important. The

questionnaire was issued between October 2019

and December 2019.

3.5 Analysis Method

The questionnaires were collected and

encoded for effective questionnaires. The SPSS

version 18.0, statistics software, was used for

data analysis. Descriptive statistics provide a

simple summary of the measured samples, and

the results are quantified. This result is part of

the statistical data that forms a broader content.

The data is organized and summarized to

describe the attributes of a certain group in order

to have an overall understanding of the general

characteristics of the data.

Reliability analysis, questionnaire

reliability refers to the reliability of the questions,

that is the measurement of error, and also the

consistency or stability of the test results as the

basis. Reliability measures include test-retest

reliability 、 split-half reliability 、 equivalent-

forms reliability and Cronbach’s α reliability,

etc. (Chou, 2002). Nunnally (1978) argues that

in exploratory studies, if the reliability is greater

than 0.7, it is acceptable.

Factor analysis is a technique used to

reduce the dimension of variables. Its main

purpose is to reduce multiple variables

(dimensions) in original data to a smaller

number of dimensions, and to maintain the most

information provided by the original data. After

reducing the number of variables, it is easier to

explain or plot in subsequent research reports. It

can also be used for various tests, or as the basis

for discriminant analysis, cluster analysis, and

etc. in later stage. Therefore, the factor analysis

result is usually not the final analysis result of

the report; it is only an intermediate process to

condense the variables needed for the further

analysis (Shi-Ying Yang, 2015).

Principal component analysis aims to use

the idea of dimensionality reduction to convert

multiple indicators into a few comprehensive

indicators. In statistics, principal components

analysis (PCA) is often used to reduce the

dimension of the data set while maintaining

the feature that the data set has the greatest

contribution. In the management strategy, in

order to make the proper decision, a set of

variables is often used to judge whether the

decision is executable, but the variable needs

to be observed multiple times before it can be

obtained. Therefore, we replace the old

variable with some new variables, so that the

new set of variables can reflects most out of

the old one.

3.6 Research Structure

The study adopts case study and enterprise

questionnaire collection. The biotechnology

industry data is obtained through literature

review. The following is the diagram research

structure.



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Figure 3-1. Research structure

4. Data Analysis

Questionnaire issue period is from October

2019 and December 2019. A total of 180

anonymous questionnaires were sent, and 56 valid

questionnaires were found after deducting the

damaged and ones with incomplete answers. The

effective recovery rate was 31.11%, and then use

SPSS 18.0 software to analyze and understand the

current and future trends and visions of Taiwan's

food biotechnology industry. The following are

the results of our analysis.

Competitive advantage of

biotechnology products in market

Promotion & development of food

biotechnology industry

R&D expenditure

Customer’s need for effects of

product

Management expectation for future

development of bioecology industry

Key factors for food biotechnology industry



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4.1 Reliability Analysis

Table. 4-1 Reliability Analysis

According to the analysis above, the Cronbach's

Alpha of the questionnaire is 0.834, indicating

that the reliability level is quite good. Nunnally

(1978) is often associated with the assertion that

instruments used in exploratory research should

have reliability of .70 or better. The Cronbach's

Alpha at the right side of each variable means the

change of total reliability level if removing that

variable. If the range of change is small, that

variable should not be removed.

4.2 Descriptive Statistics

Table 4-2 Sales Region Descriptive Statistics

According to the results of the questionnaire,

Taiwan’s biotechnology foods mainly are

exported overseas. The major market is Americas,

followed by Europe and Asia.

4.3 Factor Analysis

Criteria: With KMO=0.873(mediocre > 0.6),

First take the absolute value of factor loadings

>0.45, then take eigenvalues >1.

Cronbach's Alpha

Adjusted Cronbach's Alpha by

standardized variable The number of variables

.834 .831 30

Sales Region Frequency Percentage(%) Effective Percentage Cumulative

Percentage

Europe 14 25.0 25.0 25.0

Americans 37 66.1 66.1 91.1

Asia (including

China)

5 8.9 8.9 100.0

Total 56 100.0 100.0 100.0



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Table 4-3 Principal component analysis of the important factors for technological innovation and new

product development

Table. 4-4 Results of principal component analysis of R & D expenditures as important factors for

technological innovation and new product development (Factor Renaming)

Factor 1: Mainly composed of three highly

relevant variables, such as “Expansion of R&D

units”、 “Introduction of related technologies”

and “Training for R&D talents”. Because the

factor loading of the first two factors is higher and

more relevant, so this factor is named “Factors of

R&D technology ". The factor loadings are

between 0.714 and 0.838, the eigenvalue is 1.785,

and the explained variance is 44.631%.

Factor 2: Only includes “equipment update”.

The factor loading is 0.951 and the eigenvalue is

1.08, and the explained variance is 26.999%, so

this factor is named as "equipment factor". The

total explained variance of factor 1 and factor 2 is

71.63%.

Variable Factor 1 Factor 2

Training for R&D talents 0.714 0.19

Expansion of R&D units 0.838 0.044

Introduction of related technologies 0.751 -0.381

Equipment upgrade 0.047 0.951

Name of Factor Factor loading Eigenvalue Explained variance

1. Technical talents

Expansion of R&D units 0.838

1.785 44.631% Introduction of related technologies 0.751

Training for R&D talents 0.714

2. Equipment

Equipment upgrade 0.951 1.08 26.999%



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Table. 4-5 Principal component analysis of consumer demand factors for different product functions

Variable Factor 1 Factor 2 Factor 3

Control blood lipid 0.096 0.762 -0.222

Improve gastrointestinal function 0.086 0.854 0.224

Reverse osteoporosis 0.444 0.638 0.099

Dental care 0.681 0.433 0.007

Improve immune system 0.794 -0.038 -0.085

Control blood sugar 0.782 0.393 -0.032

Improve liver function 0.663 -0.003 0.484

Anti-fatigue -0.075 -0.422 0.621

Prevent aging 0.042 0.268 0.827

Table. 4-6 Results of Principal Component Analysis of Consumer Demand Factors for Different Product Functions (Factor Renaming)

Name of Factor Factor loading Eigenvalue Explained variance

1. Prevent and maintain body function

Improve immune system 0.794 3.404 37.823%

Control blood sugar 0.782

Dental care 0.681

Improve liver function 0.663

2. Basic health care factors

Improve gastrointestinal function 0.854

1.511 16.785% Control blood lipid 0.762

Reverse osteoporosis 0.638

3. Maintain vitality factor

Prevent aging 0.827

1.183 13.142%

Anti-fatigue 0.621



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Factor 1: There are 4 variables in factor 1, such

as "improving immune function"、"controlling

blood sugar" 、”dental care” and , “improve

liver function”. Because the factor loading of the

first two factors is higher and more relevant, so

this factor is named " Prevent and maintain body

function". The factor loadings are between 0.663

and 0.794, the eigenvalue is 3.404, and the

explained variance is 37.823%.

Factor 2: There are 3 variables in factor 2,

such as "improving gastrointestinal function" 、

"control of blood lipid “and “reverse

osteoporosis”. Because the factor loading of the

first two factors is higher and more relevant, so

this factor is named "basic health care factor".

The factor loadings are between 0.638 and 0.854,

the eigenvalue is 1.511, and the explained

variance is 16.785%.

Factor 3: There are 2 variables in factor 3,

such as "prevent aging" and "anti-fatigue", so

this factor is named "maintain vitality". The

factor loadings are between 0.621 and 0.827, the

eigenvalue is 1.183, and the explained variance

is 13.142%. The total explained variance of

factor 1, factor 2, and factor 3 is 67.75%

Table. 4-7 Principal component analysis of the trend factors for the future development of the food

biotechnology industry

Variable Factor 1 Factor 2 Factor 3

Microorganisms 0.239 0.323 0.632

Animals 0.017 0.12 0.917

Plants -0.136 0.691 0.301

Vitamins 0.171 0.852 0.166

Minerals 0.617 0.525 -0.291

Containing other functional ingredients 0.856 0.104 0.062

Compound products 0.814 -0.11 0.252



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Table. 4-8 Principal component analysis of the main trend factors for the future development of the food

biotechnology industry (Factor Renaming)

Factor 1: There are 3 variables in factor such as

“Containing other functional ingredients” 、

Compound products” and “Minerals”. Because

the factor loading of the first two factors is higher

and more relevant, so this factor is named

"complex products". The factor loadings are

between 0.617 and 0.856, and the eigenvalue is

2.477, and the explained variance is 35.387%.

Factor 2 is composed of two types of high-

relevant variables: "vitamins" and "plants", so this

factor is named "natural products". The factor

loading is between 0.691 and 0.852, the

eigenvalue is 1.491, and the explained variance is

21.304%.

Factor 3 is composed of two types of high-

relevant variables: "animals" and

"microorganisms", so this factor is named "partial

animal products". The factor loadings are between

0.632 and 0.917, the eigenvalue is 1.044, and the

explained variance is 14.917%. The total

explanatory variation of factor 1, factor 2, and 3

three is 71.608%.

Name of Factor Loading Eigenvalue Total explained variance

1. Complex products

Containing other functional ingredients 0.856 2.477 35.387%

Compound products 0.814

Minerals 0.617

2. Natural product

Vitamins 0.852

1.491 21.304%

Plants 0.691

3. Partial animal product

Animals 0.917

1.044 14.917%

Microorganisms 0.632



93

Table. 4-9 Matrix of products that maintain competitive advantage in the market (PCA after rotation)

Table. 4-10 Principal component analysis of products that maintain competitive advantage in the market

(Factor Renaming)

Factor 1 is mainly composed of five types of high-relevant variables, such as "high-quality

products", "excellent production technology",

"price advantages", "flexible marketing tactics",

and " Brand value beyond peers", named as

"competitive advantages". The factor loadings are

between 0.569 and 0.848, the eigenvalue is 2.613,


Variable Factor 1

Price advantage 0.755

Excellent production technology 0.813

High-quality products 0.848

Flexible marketing tactics 0.581

Brand value beyond peers 0.569

Name of Factor Factor loading Eigenvalue Total explained variance

1. Competitive advantages

High-quality products 0.848

2.613 52.257%

Excellent production technology 0.813

Price advantage 0.755

Flexible marketing tactics 0.581

Brand value beyond peers 0.569



94

Table. 4-11 Principal component analysis of the promotion and development of food biotechnology

industry

Table. 4-12 Principal component analysis of the promotion and development factors of the food

biotechnology industry (Factor Renaming)

Factor 1 is mainly composed of two types of

high-relevant variables, such “product exhibitions

and explanations" and "government’s supports

and funding ". Therefore, this factor is named

"government factor", and its factor loading is

between 0.747 and 0.781, the Eigenvalue is 1.465,


Factor2 is composed of two types of high-relevant

variables, "establishing sales networks" and

"share products information through the Internet."

Therefore, this factor is named "network factor".

The factor loadings are between

0.764 and 0.825, the characteristic value is 1.421,

and the explainable variation is 28.423%. The

total explained variance of factor 1 and factor 2 is

57.716%.

5. Conclusions and Recommendations

The current status of the biotechnology

industry in Taiwan is discussed above. Although

the government has actively promoted this

industry in the early days, the shortage of talents

and most of the research and development

technologies used relying on foreign patented

Variable Factor 1 Factor 2

Introduce products in featured articles 0.484 0.328

Product exhibitions 0.781 0.033

Establish sales networks 0.137 0.825

Introduce products online -0.167 0.764

Government’s supports and funding 0.747 -0.255

Name of Factor Factor Loading Eigenvalue Total explainable

variance

1. Government factor

Product exhibitions 0.781

1.465 29.292%

Government’s supports and funding 0.747

2. Internet factor

Establish sales networks 0.825

1.421 28.423%

Share products information through the Internet 0.764



95

technologies cause slow development in industry

in Taiwan in the future. In terms of talents, today's

society is facing the problem of declining

birthrates. Many colleges and universities

therefore face the challenges to cancel

departments due to few student enrollments.

Therefore, it is a challenge to train the talents.

From a technical point of view, relying on foreign

mature technology, although it can save a lot of

R&D expenditure for enterprises when competing

with international, it will be encountered the

competition of selling similar products when

selling aboard even it is profitable selling in

Taiwan. In addition, there will be many

restrictions when signing licensed technology

with foreign countries due to patent protection

and regulations. The further research and

development will be impeded because of this.

Therefore, it will not help our country to promote

this emerging industry.

The main findings of this study are as follows:

5.1 Discuss the direction of the future

development of food biotechnology. In the future,

which type of product on trend will be

developed?

According to the collected data and the

results of questionnaire analysis of industry

professions, it is learned that the main research

and development of new industrial technologies

tend to be animal derived products. As far as we

know, most of the raw materials for health foods

on the market are derived from animals. It is

produced by extracting the essence of animals.

5.2 How to promote the food biotechnology

industry to let the public understand the demand

and importance of products, so that increase

their willingness to purchase?

Through the analysis of SPSS results, it is

known that the Taiwan’s food biotechnology

industry currently lacks government funds to

support and promote and establish networks for

selling for consumers to search and understand

the effects of products on the Internet based on

their needs to increase consumers trust in food

biotech products to increase their purchase

willingness.

5.3 The conclusions of this study through expert

interviews are as follows：

(1). What is the future development of Taiwan's

food biotechnology industry? Which products

have more potential?

It is not optimistic about the Taiwan market

because of small market size in Taiwan. It is more

difficult to develop the market. Products that are

marketed abroad are mainly healthy and

functional products with more market potential.

In addition to health foods after illness, the

industry can focus on the products preventing

disease in advance.

(2). How can the development of food

biotechnology industry help our country?

In recent times it has become a matter of concern

on health, as well as changes in diet and lifestyle,

and other factors, the general public are more

likely to purchase health food and it promotes

economic development. Although most raw

materials rely on imports, the industry can take

advantage of existing rich agricultural resources

and strengthen the development of ingredients

with innovation to reduce the cost of imported

raw materials and improve competitive

advantages.

(3). Does Taiwan's health food industry transfer

technology abroad?

No. At present, because Taiwan lacks raw

materials, most products rely on foreign imports,

and foreign technology is better than domestic, so

there is no technology transfer so far.

5.4 The conclusions of this study through the

questionnaire survey of practical operators are as



96

follows:

(1). How to maintain a competitive advantage?

Taiwan’s food and biotechnology products have

been sold in Europe and the United States.

Although it has encountered various difficulties in

sales, it means that our level of production

technology has become closer to advanced

countries. In addition, the industrial clustering

effect and lower tax rates than other countries, it

is believed that Taiwan’s food biotechnology

industry can maintain its advantages under global

competition.

(2). Understanding consumers' product needs can

help the food biotechnology industry. In recent

years, many health food safety issues have

erupted in Taiwan, such as improper labeling and

the use of illegal raw materials. In addition to

discouraging consumer confidence, it has also

prompted the government to tighten the

regulations in health food product raw materials,

production and quality inspection, and standards.

As a result, manufacturers have also begun to

actively understand the importance of consumer

demand for product performance. Through the

results of questionnaire analysis, it was found that

consumers did not have a particular preference for

which product category.

Regarding the future development of the

food biotechnology industry, it is hoped that the

study would provide relevant information for

government or business decision makers, and to

promote policy and R &D directions in the future,

such as which policies and measures should be

promoted and which product category should be

further research and development and so on, line

with international standards and making Taiwan

known internationally for food biotechnology

industry.

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