It is clear that within the APEC economies there are patterns of industrial specialization and national idiosyncrasies, and that the development and influences of ICT are multi- dimensional. In an attempt to shed light on industrial-related policies, this study focuses on macro- and economic-oriented aspects as a means of evaluating the impacts of ICT. In embarking upon this project, our intention is to quantify the differences in ICT development for the APEC economies. In our efforts to reveal the effects of the ICT revolution on these economies, we employ an empirical study, involving principle component and growth accounting techniques, in order to explore the relationship between ICT and non-ICT industries. We intend to tackle a number of questions relating to the ability of ICT to accumulate national wealth, increase overall total productivity levels, boost industrial transformation and improve resource allocation. We recognize, however, that there are also disparities in the development of ICT amongst different APEC economies; whilst some economies are already at an advanced state, others are still desperately trying to catch up. For the digitizing economies within APEC, the contributions of ICT development are complicated; therefore, our focus will remain on certain specific digitizing economies as our samples, these being the US, Australia, Canada, Japan and Chinese Taipei. As we review the development of ICT in Chinese Taipei, we find that resources and budgets are mainly focused on the government sectors, with the private sector seldom relating to the public sector. Both the WMRC e-government ranking, and the EIU e-readiness ranking, indicate that the competitiveness of Chinese Taipei, in terms of its establishment of the appropriate e-environment, was downgraded in 2003 (the EIU ranking was the same as 2002, but this had already taken a backward step as compared to 2001). When checking the WMRC profiles for Chinese Taipei, it also becomes clear that the weaknesses are on w3c disability accessibility and security policy, whilst the EIU’s report indicates that the defects for Chinese Taipei, in terms of the e- environment, are in the area of support for e-services, as well as social and cultural areas. It is clear therefore that Chinese Taipei has to strengthen its e-power by establishing a strong consensus for cooperation. Extracting the IMD’s indicators on technological and scientific infrastructure by principal components analysis, we find that Chinese Taipei ranked sixth amongst the seventeen APEC economies, behind the US, Japan, Canada, Singapore and Australia. We also find that Chinese Taipei has advantages in general ICT development, R&D spirit, and ICT infrastructure but that there is room for improvement in R&D inputs and the necessary incentives for information and technology. This signifies that the government needs to allocate a greater budget, or other incentives (such as tax reductions, subsidies or appropriate supporting policies), for information and technology in order to improve R&D expenditure levels by both the public and private sectors so as to stimulate the overall development of ICT. Our empirical study, using growth accounting techniques, shows that the increase in TFP has contributed significantly to economic growth in Chinese Taipei, but that the greater part of the contribution made by TFP is nevertheless derived from intra-industry technological progress effects. The tests for inter-sector externalities from ICT using cross-economy data show a positive sign with statistical significance. The policy implications from our empirical findings are that the APEC economies may be placing too much emphasis on ICT development, per se, whilst the use of information and communications technology still lags behind. It is therefore necessary to determine how to utilize ICT, from a universal perspective, and how best to use the digital dividends, not only for domestic rural areas, low income households and the disabled, but also on an international scale for the less-developed economies.
