11Medical Service&Healthcare Industry Eng

8/6/2019 11Medical Service&Healthcare Industry Eng

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Medical Service & HealthcareIndustry:

Analysis & Investment

Opportunities

Department of Investment Services,

Ministry of Economic Affairs


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Table of Contents

I. Global Trends in Medical Service & HealthcareIndustry Development......................................................1

(I) Demands Incurred by Aging Society and Baby Bust.............................2

(II) Advanced technology & know-how.......................................................3

(III) Promising potential for healthcare market .............................................4

II. The Status of the Medical Service & HealthcareIndustry in Taiwan ...........................................................6

(I) Supply & Demand..................................................................................6

(II) Analysia of a Gap in the Industry Supply Chain, Investment Niche, and

Prospective Foreign Investors................................................................7

(III) Major Supplier in Taiwan.......................................................................9

III.Optimum Investment Items for Foreign Investors......13(I) Taiwan is the optimal choice ................................................................13

(II) Investment Niches and Suitable Investment Categories........................15

IV. Successful Examples of Cross-Border StrategicAlliances and Foreign Investment in Taiwan...............16

(I) Tunstall Group Ltd. ..............................................................................16

(II) Moscow Aviation Institute (MAI) ........................................................17

V. Industrial Investment Incentives ..................................19


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VI. Industry-Academia Collaboration in Taiwan.........22


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I. Global Trends in Medical Service & HealthcareIndustry

The phenomenon of senior-citizen and few-children trend has been

dominating many countries throughout the world. With the increasing chronic

diseases, the upgrade of information & communications technology (ICT)

and rapid development of physical measuring technology, aiding kit

technology and commercialized medical care equipment and facilities, the

industry and markets of medical service and healthcare have been growing by

leaps and bounds. The medical service and healthcare industry includes two

major categories, healthcare services and care-oriented medical devices. In

some cases, healthcare foods are included as well. In addition, as the

prevalent laws and regulations state, the distant-diagnostic medical care

services are still prohibited; the medical care businesses focus on hospitals

and clinics.

Scope of healthcare industry

Source: Industrial Technology Research Institute (ITRI), consolidated by this study.


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(I) Demands Incurred by Aging Society and Baby Bust

The trend of senior-citizen and few-children represents the striking

features of families in developed countries today. According to the definition

of the World Health Organization (WHO), a country will be defined as the

aging-oriented society if the number of senior citizens aged over 65

accounts for 7% or more of the populations. A nation is defined as the aging

society if the senior citizens aged over 65 account for more than 14% of the

populations, ultra-aging-oriented society if the senior citizens aged over 65account for over 21%.

Forecast of population in Taiwan, by distribution of ages

Unit: %

Source: Council of Economic Planning & Development (CEPD), Executive Yuan (the Cabinet) ,

2006/6


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Japan, a developed country, is a typical example of senior citizens aged

over 65 account for 21.2% of the total population, way above the criteria for

ultra-aging society (March 2007). Other developed countries like Germanyand Italy represent aging society as well. Only the United States is yet to

meet such criteria. The senior-citizen and few-children phenomenon hits

Taiwan fiercely as well. As the Council of Economic Planning &

Development (CEPD), Executive Yuan (the Cabinet) estimated that in June

2006, the population of the elders aged over 65 would be up to 2.29 million,

about 10% of total population. By 2025, the ratio of senior citizen is expected

to hit 19.8%. On the other hand, the birth rate in Taiwan stays at the lowest

level around the globe. The total number of population is expected to drop in

2019, leaving mounting burden to the youth on supporting senior citizens.

(II) Advanced technology & know-how

In the digital high-tech era of the 21st century, home lifestyle has

undergone substantial change compared with the previous days. For instance,

the high usage rate of wire and wireless broadband networks, improved

technology & know-how of physical measuring and technology for food

processing, rapid advancement of care-oriented medical care aids/devices

have brought medical service and healthcare industry into application to

speed up the market development.

The major categories covered in the improved technology & know-how

include: Wireless Broadband Technology, e.g., application of RFID, Zigbee,

WLAN and GPS. Wire networks include optical fiber transmission for

application to deliver high solution patient databases into application. Other

aspects include battery development, new model material development and

applicationl.


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(III) Promising potential for healthcare market

1. Remote medical care services market in rapid growthThere are no complete statistical databases to verify the markets. But

some data have proven market growth at a fast pace. Take the global remote

medical care services market development for example. The market scale

amounted for US$850 million in 2006 and is expected to reach US$3.25

billion by 2010. The compound growth rate during 2006-2010 is believed to

rise to 39.8%. The key part contained in the services is managerial services

provided through information systems. The market was estimated to grow

from US$638 million in 2006 in the single item estimate to US$2.06 billion

by 2010.

Scale of remote medical care services of the world

Unit:US$1 million

Source: Juniper Research, consolidated by this study. 2008/1

2. Huge market scale of medical care services marketAccording to the official report by Ministry of Health, Labour and

Welfare, Japans, medical care services market was in a size of 5.66 trillion


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yen(approximately US$53.8 billion) in 2005. The major categories covered

in the care services include welfare kits for rental and for sale, healthcare,

rehabilitation, repair. In line with the gradual rise in the number of seniorcitizens in Japan, the market size would reach 6 trillion yen in 2007.

The medical care services markets have been developing for years in the

United States and the Western Europe. All those countries are noted for their

huge scale of welfare system and aging society markets of medical care

services.

Scale of medical care industry in Japan

Unit: 100 million yen

32,291

40,884

46,261

50,653

55,22156,582

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2001 2002 2003 2004 2005

Source: Juniper Research, consolidated by this study. 2008/1


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II. The Status of the Medical Service & HealthcareIndustry

(I)Supply & Demand

As estimated by IEK of Industrial Technology Research Institute (ITRI),

the markets of care-oriented medical devices and healthcare services in

Taiwan were in the scale of NT$92 billion in 2006, increase to NT$106.5

billion in 2007. The markets include the output value of healthcare services

of NT$54 billion, NT$28.35 billion on aids among care-oriented medical

devices, home care consumables and medicated furniture amounted to,

NT$11.55 billion, and monitoring medical devices, NT$12.6 billion. The

total output value by 2015 is estimated to increase to NT$416.5 billion.

Estimate of Taiwans medical service and healthcare industry by output value

Unit: NTD100 million

Source: IEK, Consolidated by this study. 2008/1

In an attempt to fulfill users maximum satisfaction, the suppliers often

introduce ICT technology to home care to satisfy the chronic patients needs

for care in the aging society. Through such efforts to care for chronic disease


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patients, they try to achieve the goals of reducing the costs for both inpatient

and outpatient cares.

Healthcare services can also be conducted by means of remote care. The

major care services include measuring and transmitting physical signals,

assessment and instructions of medication, life of remote area support and

services, provision of home healthcare information, positioning, report on

abnormalities and emergency rescue, reports on safety and security, search of

missing senior citizens, medication advice and reminder and dosage control.

Before we estimate the scale of medical care service industry, we are

normally required to ascertain the contents of required services before we

come to the amount of per capital continual expenditure which is to be

multiplied by the number of the target service population to come to the size

of the local markets. It might differ from the care-oriented medical devices.

In service industry, we normally calculate the size of the local markets which

are known as the output value of service industry. Such services will not beexported until they attain to certain strength. Other than the services to the

local markets, to export medical care devices is the main goal. It, therefore,

calls for different approaches to estimate the output values.

(II) Analysis of a Gap in the Industry Supply Chain, InvestmentNiche, and Prospective Foreign Investor

Taiwans care-oriented medical device industry primarily focuses ondevelopment of home medical care devices, welfare devices or medicare

products, including aids, monitoring devices and home medicare products.

With significant efforts in years, Taiwans manufacturers have advanced

toward the products on the mid and- high levels as the main target for export.

The related products include digital blood pressure meters, electric scooters,

ear thermometers, electric thermometers and respiratory first aid kits among


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others. In the future, such devices will be further developed for intellectual

and integrated functions.

Representative products manufactured in Taiwan 2007

Descriptions of

productsKey manufacturers

Outputs

(thousand sets)

Output value

(million U. S.

Dollars)

Market share

of the world

Digital blood

pressure meters

Microlife, H&L,

Superior Medicine,

etc.

7,500

(including made

in China)

220 46%

Electric scooters

Pihsiang, Merits Co.

Ltd., KYMCO, etc. 175 161 38%

Ear thermometers Radiant, AviTA, etc.

3,020

(including made

in China)

127 35%

Electric

thermometers

Microlife, Jiewei,

Actherm, etc.

30,000

(including made

in China)

58 65%

Respiratory first aid

kits Galemed, etc. 2,600 55 35%

Blood sugar testing

sheets/metersApexBio - 35 -

Source: Taiwan Medical and Pharmaceutical Industry Technology and Development Center,

consolidated by this study, 2008/1

Taiwan has a great potential in medical service and healthcare industry,

including land, building, facilities, software (human resources, consultance,

service/management system). As for the niches on service industry, the aiding

kits for rental, intelligent medical monitoring service, repairing service

facilities, visiting care, daily service, room service, dietary / transportation

service, emergency notice service, day-time care, short-term care,

information provision service are all included. As for the investment

opportunities on facility provision, interior design, environment monitoring,


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medical facilities, safety and security system have the potential for

development.

The niches for investment on managerial services include financial

consulting, human resource management, facility management, land agency,

and marketing service. Besides, medical service and healthcare industry can

expand its business to Long Stay industry, providing services to the target

customers, the elders aged from 55 to 65.With the focus of health

management, life care and senior citizens recreation, not only foreign senior

citizens will possibly be attracted to live in Taiwan, but Taiwan can becomethe center of providing integrated healthcare service in the Eastern Asia as

well.

With the era of aging society approaching, demands on medical service

and healthcare industry have escalated quickly. The best way for local

medical device manufacturers to connect to the global market lies in

cooperating with foreign potential companies through strategic alliances. Theforeign companies in medical service system include Card Guard on medical

facilities and monitoring service in Israel, P2P. on medical care system

development in Canada, Anritsu on medical information system development

in the United States, etc.

(III) Major Supplier in Taiwan

In Taiwan, the Ten-year Project to Set up Long-term Care System was

officially approved by the Executive Yuan (the Cabinet) in September 2006

as the flagship program. In the ensuing month, i.e., October 2006, the

Executive Yuan officially classified the healthcare as the newly emerged

industry for more development. In an attempt to speed up the development,

the Department of Industrial Technology, Ministry of Economic Affairs


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launched in 2006 the Senior Citizen U-Care Flagship Program. In 2007, it

further launched the Healthcare Innovating Service Program which was

newly added with life and entertainment innovation services and operatingprograms, chronic disease management services, setup and planning of the

business operation systems. In the Healthcare Innovating Service Program

which is to be implemented in 2008, since then, lots of new contents

including safety and security protection systems, remote care services,

transportation, housing, recreation, wealth management education were

added in order to make the overall planning framework better and to meet the

substantial needs.


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Development of medical service and healthcare industry engineered by the


Source: Department of Industrial Technology, Ministry of Economic Affairs

Among the government authorities, the units bestowed with the

responsibility to carry out the services in this Chapter include Ministry of

Economic Affairs, Ministry of the Interior, and Department of Health. In

2006, Department of Industrial Technology, Ministry of Economic Affairs

was in charge of implementation of medical service and healthcare services.

The results achieved through its promoting efforts include those enumerated

below: large-scale hospitals such as Chang Gung Memorial Hospital, Tians

Memorial Hospital, Missioncare Inc., Chia-Yi Christian Hospital, as well as


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Far Eastone Telecommunications Co, Ltd., Taiwan Secom Co., Ltd., RPTI

Interrnation Ltd. and a few others have teamed up with one another to set up

relevant service networks.

Fruits in implementation of the annual programs in medical service and healthcare

industry

Engineered by Program titles Co-sponsors

Chang Gung MemorialHospital

Superior Senior Citizen MedicareCare Innovation Program

---

Taiwan Secom Co., Ltd. Healthcare Services Program forUpgraded Online Blessing Lifestyle

Chia-Yi Christian Hospital, MayaInformation Co., Ltd., Cablesoft TechInc.

Cardinal Tien Hospital Omnibearing and ComprehensiveSenior Citizen HealthcareNetwork Program

Netown Corporation, Angel NetUniversal Co., Ltd.

Missioncare Inc. Non-institution Senior Citizen CareService Platform Programs

MiTAC-SYNNEX Group., ELANMicroelectronics Corp., VisatacInternational Co., Ltd., Health & LifeCo., Ltd.)

Yunlin Senior CitizensSociety

Program of Wireless PhysicalMonitoring System to be Used forDiabetes and High Blood PressurePatient Home Care for SeniorCitizens

TaiDoc Technology Corp.

Z-Land Action Digital InformationHealthcare Services System forSenior Citizens

---

RPTI Interrnation Ltd. Action Healthcare Services Systemfor Senior Citizens

PGD Taiwan, VODTELCommunications, Inc., UniversalTechnology Systems Inc., HitronTechnologies, Inc.

Far EastoneTelecommunications Co,Ltd.

Lead Planning for RemoteHealthcare Demo Service Programs

---

Source: Department of Industrial Technology, Ministry of Economic Affairs


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III. Optimum Investment Items for Foreign Investors(I)Taiwan is the optimal choice

Taiwan can provide better incentives for foreign investment on medical

service and healthcare industries as the following:

1. Governments active attitudes toward the medical service andhealthcare industry

The concrete measures include: The U-Care industry specifically

encourages to develop care service systems through development

institutions/communities/homes or emergency rescue, chronic disease

management services and business operation systems, senior citizen lifestyle

and entertainment services & operating modes. Taking judicial (corporate)

person institutions as the infrastructural environment and platforms, it

encourages innovation of omnibearing and comprehensive health services to

senior citizens. The U-Care industry is intended to set up senior citizen care

and service systems in the short-term, to expand to cover chronic disease care

management & services in the mid-term and further to expand to cover

healthcare services in the long-term.

The development strategies include the guidance and encouragement to

the industries to invest in R&D. The U-Care industry will take advantage of

leading new products to help the participating firms minimize the risks inR&D and to help guidance and promotion through intellectual medical care

electric products and medical care devices. Development of high added value

health management medical devices includes the U-Care efforts which will

promote association with information & communications technology to

develop products toward tiny-sized, wireless, home-oriented and e-oriented

inspection trends to develop medical devices of high added values. It will


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also make use of remote healthcare services to develop Class II, the

innovating medical devices at a higher level.

2. Shaping of industrial chainsIn terms of the status quo of Taiwans medical service and healthcare

industry chain development, with the support and promotion from

government, more and more local investors have joined in. At the moment,

Taiwans medical service and healthcare industry chains have gradually come

into being.

Taiwan Secom Co., Ltd., for instance, has teamed up with hospitals,

information system platforms as well as software manufacturers. Tians

Memorial Hospital has associated itself with care services and network firms.

Min-Sheng General Hospital has been in cooperation with the information,

electronic and medical device manufacturers. Other institutions like National

Taiwan University Hospital, Chang Gung Memorial Hospital and Mackay

Memorial Hospital have expanded into the remote care related services as

well. The overall industrial chains might have not come into being. But

potential and opportunities are definitely there.

3. Strength in terminal product manufactureTaiwan is taking the leading position in care-oriented medical device

development, in particular digital blood pressure meters, blood sugar meters,

electric scooters, ear thermometers, electric thermometers, respiratory first

aid kits, air cushion respiratory therapeutic devices, physical monitors, in the

global markets. In the future, government will continue to put resource to

invest in the industry, and the manufacturers in turn will gain significantly

competitive edges in technology & know-how and product development.


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IV. Successful Examples of Cross-Border StrategicAlliances and Foreign Investment in Taiwan

(I) Tunstall Group Ltd.

Tunstall was incorporated in 1957 and is headquartered in Yorkshire,

England. The entire Europe has long been the leading providers of solutions

to individual and home security as well as response center systems. Tunstall

has rendered technological support to 30 countries throughout the world.

Tunstall set up Marketing Division in Australia in 1992 and established the

Emergency Response Center in Brisbane in May 2001. Since October 2002,

Tunstalls nationwide emergency response center has been in sound

performance in Tauranga as one of the response service centers serving New

Zealand with the largest workload. Tunstall set up its Southeast Asian

response division in Malaysia in January 2007, as the only and sole

emergency response center of the entire Malaysia, rendering hands-on

support to the markets in Malaysia, Singapore and Brunei. At the moment,

Tunstall is operated by a total of 1,100 employees, serving over 2.5 millionpatients through remote care systems.

Tunstall established Tunstall Taiwan Co., Ltd. in July 2007 through

which Tunstall introduced to EverCare remote home care systems. Having

witnessed Taiwan governments efforts focusing on the problems resulting

from the fast-growing number of senior citizens, Tunstall has landed in

Taiwan and as its bridgehead before entering in other key markets in

Asia-Pacific Region gradually into Japan and China. In Phase I, Tunstall

will team up with the Evergreen Association to help its members with home

care services. In January 2008, the care systems developed by Tunstall were

officially adopted by the Vocational Advisory Commission for Retired

Servicemen of the Executive Yuan (the Cabinet) which installed the systems

into more than one thousand homes of the retired servicemen in remote areas.

Thanks to the advanced Tunstall care systems, the government has made


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support and rescue readily available to the retired servicemen whenever they

are in an emergency or in other needs.

(II) Moscow Aviation Institute (MAI)

Moscow Aviation Institute (MAI) started to work in collaboration with

Industrial Technology Research Institute (ITRI) as early as in 2002. Together

they successfully developed the Next-Generation Physiological Monitoring

Technology. In 2004, they further expanded the scale of cooperation and

began to develop the Ultra Wideband Non-Contact Breathing and Heartbeat

Monitoring Technology. Through the Ultra Wideband Physiological

Sensing Strategic Alliance, the collaborative effort was accelerated in order

to set up product specification standards and to extend the scope of industrial

application and establish innovative businesses.

In May 2007, MAI and the Center for Measurement Standards/ITRI

successfully co-developed the Ultra Wideband Non-Contact Breathing and

Heartbeat Monitoring Technology. This new technology enables the

measurement of breathing and heartbeat in a non-contact way, and is now

going for trial production. As the wireless technology is used, no physical

contact with the patient is required throughout the entire measuring process.

A monitoring system placed within 1 meter by the patient, can measure the

patients physiological data such as breathing, number of heartbeats and

blood pressure by low-power pulsating radio waves. The data is then

transmitted and recorded in a computer through ultra wideband network.

With the advantages of easy operation and maintenance, the technology will

be mainly applied in remote home healthcare and may become a

representative high-end product in the medical care market in the future. MAI

has already joined the Ultra Wideband Physiological Sensing Strategic

Alliance that ITRI established in 2007. For now and the future, MAI will


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assist the industry players in Taiwan to enter into the global medical

electronics market worth as much as NTD60 billion.


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V. Industrial Investment IncentivesIn a bid to facilitate the rapid development of the Healthcare industry,

the Taiwan Government offers a variety of investment preferences, such as

tax preference, R&D subsidies, low-interest loan, personnel training, etc. to

asssist Healthcare industry players and to attract foreign investments.

Investment Preferences Offered by Taiwan Government

Benefits Measures Contacts

Tax Emerging important strategic industry

(Investment tax credit for shareholdersor 5 year tax free)

Personnel training expenditure

(business income tax credit based on

35% of the training expenditure of the

same year)

R&D expenditure (business income

tax credit based on 35% of the R&D

expenditure of the same year)

Accelerated depreciation of facilities

(maximum depreciation period: 2

years)

Tax credit for the purchase of facilities

and technology investment.

Tax -free import facilities

Income tax free for technology transfer

or technology cooperation.

Preference for the establishment of

operation headquarters.


http://www.moeaidb.gov.twE-mail: [email protected]

Tel: +886-2-2754-1255


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Industrial Technology Development

ProgramITDP

Small Business Innovation Research

ProgramSBIR

Industrial Technology Development

Alliance ProgramITDAP

Strategic Service -Oriented Industry

R&D ProgramSRD

Information Technology Applications

ProgramITAP

Industrial Technology Innovation

Center Program for Local EnterprisesMNCD

Industrial Technology Innovation

Center Program for Foreign Enterprises

MNCF

Department of Industrial

Technology, MOEA

http://doit.moea.gov.tw/

Tel886-2-2321-2200

R & D

Subsidy

Leading Innovative Product

Development Program

Enterprise R&D Alliance Program

Enterprise Operation Headquarters

Service [email protected]

Industrial Development Bureau,

MOEA

http://www.moeaidb.gov.tw

[email protected]

Tel886-2-2754-1255

Industrial R& D Loan Ministry of Economic Affairs

http://www.moeaidb.gov.tw

[email protected]

Tel886-2-2754-1255

Low -Interest Loans for Mid- and

Long-Term Capital

Council for Economic Planning and

Development, Executive Yuan

http://www.cepd.gov.tw/

Tel886-2-2316-5300

Low-Interest

Loans

Project Loans for Small and Medium

Enterprise

Small and Medium Enterprise

Administration, MOEA

http://www.moeasmea.gov.tw

[email protected]

Tel886-2-2368-6858


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Bank Draft and Loan Preferences for

Development Fund, Executive Yuan

National Development Fund,

Executive Yuan

http://www.df.gov.tw/

[email protected]

Tel886-2-2389-0633

Low -Interest Loans for Science Parks Science Park Administration

http://www.sipa.gov.tw/

Tel886-3-577-3311

International Experts Recruitment HiRecruit Services

http://hirecruit.nat.gov.tw/

[email protected]

Tel886-2-2370-9687Military Training Service Application Military Training Project Office

http://rondi.mnd.gov.tw

[email protected]

Tel886-2-2736-8088#3414

Personnel

Training

R&D Substitute Service R & D Substitute Service Program

Office, Ministry of t he Interior

http://rdss.nca.gov.tw

[email protected]

Tel886-2-2736-6066#206

Source:organized for the present study, 2007/12


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VI. Industry-Academia Collaboration in TaiwanIntegrating the efforts from the government, private sector and industry

associations, Taiwan is actively pushing forward the development of the

Healthcare industry.

Cooperating Institutions for the Development of Healthcare Industry in Taiwan

Institution Website

Industrial Development Bureau, MOEA www.moeaidb.gov.tw

Department of Industrial Technology, MOEA www.doit.moea.gov.tw

Department of Investment Services, MOEA www.dois.moea.gov.tw

Committee of Communication Industry Development,

MOEA

www.communications.org.tw

Department of Health, Executive Yuan www.doh.gov.tw

Taiwan External Trade Development Council www.taiwantrade.com.tw

Taiwan Electrical and Electronic Manufacturers

Association

www.teema.org.tw

Industrial Technology Research Institute www.itri.org.tw

Institute for Information Industry www.iii.org.tw

Telecom Technology Center www.ttc.org.tw

Source: organized for the present study, 2007/12

11Medical Service&Healthcare Industry Eng

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