To enhance the productivity and competitiveness of the manufacturing sector, the Taiwan government is establishing technology transfer infrastructure as a strategy for promoting automation. This paper first reviews the status of the automation capability, then discusses the role of government in shaping the industry from the perspectives of four determinants: firm strategy and structure, factor creation, demand condition, and related and supporting industries. Derailed strategies and implementation plans are discussed in the context of the four determinants. An example of the programme result is presented. The objectives of year 2000 are stated in the Conclusions section.