Taipei, Sept. 19, 2008(CENS)--Taiwan has overtaken Japan, South Korea, the United Kingdom and Australia to become the world`s second most competitive manufacturer of information-technology products this year, trailing only the United States, according to the Business Software Alliance (BSA) headquartered in the Washington, D.C.

The non-profit trade association recently released the study, which it contracted Economist Intelligence Unit (EIU) to conduct. The study, now in its second year, assess and compares the IT industry environments of 66 economies to determine the extent to which they enable IT sector competitiveness.

The top 10 in the 2008 study are the U.S., Taiwan, the United Kingdom, Sweden, Denmark, Canada, Australia, South Korea, Singapore and the Netherlands. Taiwan was ranked as the No.6 last year.

BSA`s vice president and regional director for Asia Pacific operation, Jeffery Hardee, ascribed Taiwan`s significant advancement mostly to the change of the approaches EIU applied on assessing research and development environment of these economies. Last year, the assessment was based on patents of all products whereas this year the assessment focused solely on IT-related patents.

Hardee noted that by new assessment approach Taiwan has one patent every 2,000 people and has US$512 in R&D budget every 100 people this year. Although the island`s R&D budget is outshone by Japan`s US$707 every 100 people, its R&D environment is second to none worldwide. The study shows that although Taiwan produces only 120,000 IT-related undergraduates and graduates combined every year, they are quality relative to their counterparts in other Asian countries.

However, Taiwan`s open, competitive index drops eight spots this year, to 19th place, and its government leadership index slumps to 28th from last year`s 19th. EIU said six factors combine to create a sound environment for the IT sector, including supply of high-skilled workers, innovative-friendly culture, world-class technology infrastructure, robust legal regime that protects intellectual property such as patents and copyrights, open and competitive economy and government leadership that strikes the right balance between promoting technology and allowing market forces to work.

According to the study, Taiwan is friendly to foreign investors, its government is efficient and its legal regime is somewhat fair. But the volatile relationship between Taiwan and mainland China and political turmoil on the island have been the deep concern in foreign investors.

By technology infrastructure index, 60% Taiwanese connect to the Internet and have computers, outshone by most of its Asian neighbors. But the island`s mobile ownership has reached 100% and its IT infrastructure is poised to be healthier with its "Mobile Taiwan" plan progressing.

(by Ken Liu)