The thesis uses the case study of software industry development to investigate the role of the state, relationship with the private sectors, and its transformation. Besides, This paper adopts Peter Evans¡¦ ¡§embedded autonomy¡¨ and Linda Weiss¡¦s ¡§governed interdependence theory¡¨ to explain these situations. As far as Taiwan, the state helped develop software industry after 1980s. At that time, there was no software programming or service company in Taiwan. Like the other strategy industry, the state set up the pilot agency, III, to support software industry, but the state didn¡¦t intervene in production. The unique character of software industrial development has been its synchronized globalization among developed and developing world. To out-compete among others in software industry is quite a gap for Taiwan. Besides, Taiwan¡¦s labor cost is higher then India and Mainland China. So, Taiwan has no chance to get the low-level business. In the analysis, the state¡¦s e-government budget didn¡¦t benefit to software industry. The state have no obvious network with society, have no control force to software private sectors, and the state¡¦s capacity was be doubted. So the state only just plays a ¡§husbandry¡¨ ideal-type.