To improve Taiwan's competitiveness, Taiwan's government actively encourages businesses to commit to innovative R&D activities by implementing R&D subsidies and incentives. They hope to accumulate intellectual capitals and nurture enough technical professionals to promote industrial upgrades and stimulate economic development. When applying for R&D subsidy, the application must go through the proper approval process. Approved applications will be awarded with substantial financial assistance to fuel further innovations such that R&D subsidy has become critical to many companies. This study used the "Conventional Industry Technology Development"(CITD) as an example and classifies the R&D subsidy applications for analysis based on the 5 variables: company's basic information, program type, commitment to R&D, past experience in applying for R&D subsidy, and strategic alliance with other institutions. Logistic regression is expected to sum up factors that are significant in obtaining R&D subsidies and formulate a predictive model. This enables the government to re-examine its policies and understand the conventional manufacturers' commitment to R&D. Furthermore, the study may assist the companies to assess their chances in obtaining R&D subsidies and serve as a reference for future endeavors. The study suggests that the factors most critical for companies to obtain R&D subsidies are the number of employees, capital size, number of government subsidies already obtained, number of companies non-R&D outsourced to, whether R&D intensity has increased for the past 2 years, and whether R&D funding has increased for the past 2 years. Although plan's duration and non-R&D outsourced dollar amount may have some influence, their impact was not obvious in the model.

Taiwan's small and medium enterprises (SMEs) play an important role to promote economic development. White paper on small and medium enterprises in Taiwan, 2004 indicated SMEs¡¦ numbers is 97.83% of whole industry. So SMEs is the main force in Taiwn¡¦s industry. According to National Science Council review SMEs in Taiwan engage in R¡®D activities facing the captial and technological barriers, and the percentage that accept government subsidy is 13%(National Science Council, 2000). The Deptartment of Industrial Technology (DOIT) of Ministry of Economic Affairs (MOEA), launched Taiwan's SBIR promoting program, mostly referred to the SBIR US version, in 1999 in order to encourage local start-up companies pursuing innovative research of industrial technologies and products. Rothwell & Zegveld (1982) research government innovation policy include technology and industry policy, classify three composes:Supply, Demand, and Environmential policy. In government R&D subsidy policy system can be distinguished to R&D procurement(Demand) and directive subsidy(Supply). The study compare to other country¡¦s R&D subsidy policy and refer to business technology strategy. The study uses the interview method to analyze the policy awareness of SMEs and confer the policy influence of SBIR subsidy policy. So far as bring up the suggestion of government R&D subsidy policy. Through interview analysis, SMEs represent in the beginning of R&D activities always face capital shortage and need technological assistance. The study propose government carry out R&D subsidy should replace monitoring control for concilling system. Government can match up national industry development way to alliance industry engage in specific R&D activity by government R&D subsidy policy. To sum up government can weighted the Demand and Supply side innovation policy to cooperate R&D subsidy policy system. So that government R&D subsidy policy can look after both side by stimulating SMEs innovation generality and promote national technology level to reach the full-scale policy achievements.