In the past few years, the prominent achievement of economy in Taiwan has been called the ¡§ Taiwan Experience¡¨ or ¡§The Miracle of Economy¡¨. Urban is not only the place that people gather to take economic activities and live in groups, but also the area that produce and consume goods. Now the modern economy has expanded as the type of urban economic. Nowadays, service industry which has been the major industry during the transition of industrial structure in Taiwan could be an illustration that Taiwan is in the age of Service Economy, the functions of a city are going to be more various and delicate, and the division of industry is tending to be more professional. Though the service industry that just serves customers in the past can¡¦t totally meet the needs of the public, the growth of its high specialization and output value bridges the gap for the problems resulted from the manufacturing industry. Most important, the producer service industry has become the main industry in the world. The purpose of this research is to understand the development in the present and tendency of producer service industry, and also to measure the space efficiency of producer service industry in 22 counties for three years by Data Envelopment Analysis(DEA). The research is divided into five parts: the first part includes research structure and literature review. The second part is to discuss and figure out the theory of DEA. The third part is to analyze the transition and development of producer service in present days. In the fourth part of the research measures the efficiency of producer service industry in 22 counties, in the mean time it estimates the relation of among efficiency, agglomerate economy, city scale, public investment, and the development of other industries by regression analysis and chi-square test. Then the conclusions and recommendations would be discussed to government that makes the plans of economy industry policy and the development of producer service industry. The conclusions of this research are: 1.The producer service industry in Taiwan grows rapidly, and the industry gathers in Taipei city which Location Quotient is more than one . In addition, Taipei city plays the most role for industry¡¦s output value, the numbers of employees and factories Moreover, the producer service industry in Taipei Metropolitan Area and other Metropolitan city gradually grows. Furthermore, the industry is expanding to the nearby metropolitan gradually. 2.The producer service industry and the industries in the producer service industry are influenced by Forward Linkage Effect. This shows that the industry grows rapidly following other industries development during the development of economy. 3.The producer service industry in Taipei city shows the excellent space efficiency. On the other hand, the some of 22 cities areas showed efficiency from 1986 to 1991, and the nearby metropolitan area also showed efficiency in 1996, especially in Taipei metropolitan area and in Kaohsiung metropolitan area. 4.The space efficiency of producer service industry shows remarkable relation with city scale, agglomerate economy and public investment. Additionally, the producer service industry also has the close relation with manufacturing industry and non-producer service industry during the development of industry.

In the beginning of 21st century, like many nations across the world, Taiwan has worked hard in an attempt to establish a new economy. This new economy will be comprised of intellectual property and high-tech industries which high economic return, low pollution, and all other added values will truly bring another phase of prosperity to Taiwan. Ideally, the government hopes to pattern the successful model of Hsinchu Science Park to the new establishment of biotechnology-related science parks across the island. Therefore, the Southern Taiwan Science Park, Nankang Science Park, and Chupei Biomedical Science Park were set up. Meanwhile, the Cabinet¡]the Executive Yuan¡^also evaluated the existing bio-tech industries in terms of natural resources, academic support, and cluster effect through the Strategic Review Board (SRB). The SRB is composed of experts from industries, government officials, academicians, and researchers as well. After sophisticated discussion, SRB reached the following conclusions: 1. biotech science parks are essential to form the cluster effect to Taiwan¡¦s biotechnology. 2. The biotech science parks shall be established in regions across the island in order to integrate the resources from the northern and southern Taiwan . In June of 2002, the Cabinet has officially initiated the plan ¡§The Challenge 2008 ¡V Nation-level Development Plan¡¨ which included ¡§Two Trillion, Two Stars ¡¨ plan devised by the Ministry of Economic Affairs, and the bio-tech development is included in the ¡§Two-Two ¡¨ plan . At the moment, Taiwan¡¦s bio-tech annual output to 100.9 billion NT$, and will bring this number up to 250 billion NT$ by 2006. In addition, the government also aims to attract another 100 billion NT$ of investment in bio-tech by the establishment of another 500 bio-tech companies within the next ten years. Some Cabinet-level agencies, such as the Council for Economic Planning and Development, the National Science Council, and the Council of Agriculture also coordinated with the local governments to plan the establishment of bio-tech science parks. According to the government¡¦s ¡§Bio-tech Industry Promotion Programs (BIPP) ¡§, four bio-tech science parks have been planned : Nankang Bio-tech Park, Chupei Biomedical Park, Southern Taiwan Bio-tech Park, and Tunghwa Bio-tech Incubation Center. The success factors for those programs will hinge on the Taiwan¡¦s ability to conquer over the current economic slowdown, to promote and maintain Taiwan¡¦s existing economic competitiveness and growth. In fact, with Taiwan¡¦s economic power, the avid promotion of knowledge-based economy, the ambition to the bio-tech industry, and the avid support from the different fields, Taiwan has amassed the essential factors to create a successful bio-tech industry. However, to realize the dream of initiating biotechnology to become the next ¡§star industry¡¨ in Taiwan, the detail planning, the execution, and the integration of the government and private resources, it dearly deserves our close attention and supervision. The purpose of this study is to investigate the ¡§bio-tech cluster effect¡¨ with respect to other factors including¡¨ resource distribution¡¨, ¡§social interaction¡¨, ¡§cluster demographics¡¨, ¡§nuclear/peripheral development¡¨, ¡§cluster economics¡¨, ¡§non-profit marketing and sales¡¨ and so on. This study will also introduce some bio-tech science parks and clusters (e.g. Europe, U.S., Asia, and China), to present their current status and past experience, then compare with the planning and development of the bio-tech science parks in Taiwan. With theoretical analysis and factual experience, this study will analyze the advantage and restrictions of the development of bio-tech science parks. Additionally, this study will provide a few viewpoints from the foreign for the government and bio-tech industry in the building of the new star industry. This study pointed out, right at the juncture where the bio-tech sets for the next wave of industry, that we are faced with the shortage of talents, the high-level technology, and funds. As a result, the development of bio-tech industry in Taiwan has fallen short of expectation, and limited the scope of discussion of this study. As of now, the bio-tech industry in Taiwan has not created any significant bio-tech-related product, the funds for bio-tech-related research only amounts to 7 billion NT$, not even 1% of the U.S. With over 100 billion NT$ of venture capital funds, only less than 5% was invested in bio-technology. Unless the government increases its R&D fund and hasten its steps in the promotion of bio-tech start ups; otherwise, Taiwan will continue to lag behind in its bio-tech development. Another unexpected factor, which plays a major role in the development of bio-technology, is the instability of the policy. Bio-technology promotions and development are easily influenced by politicians and leaders of different political backers, and often stalling various plans. For example, an approved proposal with a budget at 3.9 billion NT$ was overturned by the reason of ¡§inappropriate budgeting plan¡¨ in April of 2003. The Cabinet¡¦s proposal consisted of recruiting new bio-tech companies, biotech experts, new technologies, and to purchase Nankang bio-technology building which will increase the substantiality of ¡§the Greater Taipei Biotechnology R&D Cluster¡¨, however, the Congress¡]the Legislative Yuan¡^considered the Chinese-American Economic and Social Development Fund was not suitable for such bio-tech development and promotion. This study also pointed out some certain aspects that are beneficial to the development of biotechnology in Taiwan, to express our support to the current bio-tech-related policies, we sincerely hope that bio-tech industries will has a fruitful growing in the near future. The previous success in manufacturing calculators, computers, and other electronics that once earned Taiwan the title of ¡§Island of Technology¡¨ will again bring the island a new title, ¡§Island of Biotechnology¡¨. One of the major suggestions of this study is to advise the bio-tech industries could give up their existing ¡§subjectivity¡¨ and replace this mindset with ¡§objectivity¡¨ where sharing of knowledge, critical discussion, and mutual interaction, will bring a ¡§cohesive effect¡¨ that will ultimately reflect the benefits of biotech cluster. Researchers, professors, scientists, and students from universities, research organizations, and incubation centers should bring their promising research to nearby science parks to find appropriate matching companies to give the further collaboration in research, co-develop, manufacture, market, and sale promising in biotech products. Another point worth mentioning here is that both the public and private sector should play the equal role and share the same responsibility. In other words, from the Ministry of Economic Affairs, National Science Council, Council of Agriculture to the local government, and the biotechnology science park should get involved the support to the bio-tech and avoid overlaps of resource allocation. The government should evenly distribute resources, encourage fair competitions and beneficial collaborations. Even more, state owned corporations such as Taiwan Sugar Corporation and ADImmune Corporation have jumped in the bio-tech band wagon and also participated in the formation of bio-tech science parks. Anyway, one of the most ideal propositions is to promote agricultural-biotech zone from the middle to southern Taiwan science parks, in order to take advantage of Taiwan¡¦s existing natural resources, the northern science parks should emphasize on R&D, drug manufacturing, medical device design and manufacturing, bio-tech service, and so on. For example, each bio-tech park should focus on a major area and its related-services such as flower industry should match well with fruits, and vegetables while water/ocean produces should be separated. This way, each bio-tech science park will distinguish itself and even cooperate with others, and each will have its own playground and market niche. In summary, combining local political/economic situations and overseas¡¦ bio-tech park experience, this study presents the following key points that may prove to be essential in the successful establishment of Taiwan¡¦s biotech science park and cluster development: 1. Regardless of which party is in charge, government should concentrate on the establishment of science parks; 2. The establishment of science parks should base on cluster style, absorbing all potential talents and encourage R&D seedlings; 3. Sufficient R&D fund, and develop core facilities to incubate up-coming technologies; 4. To establish good relationships and frequent interactions with surrounding universities and research institutes, to ensure the flow of outstanding talents; 5. Government should promote more establishment of science parks through the Association of Allied Industries in Science-Based Industrial Park, National Applied Research Laboratories, Industrial Technology Research Institute, and other non-profit organizations, and to make more reasonable development process and flexibility in terms of hardware planning; 6. To provide easy access to public transportation and highway networks and comfortable and quality living environment to science parks.