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"Asia Silicon Valley" plan to transform economic structure

 September 8, 2016

The aim of the government’s new “Asia Silicon Valley” plan is to improve Taiwan’s overall economic structure once and for all, Premier Lin Chuan said today after hearing the National Development Council’s (NDC) report on the plan.

One of the five innovative industries President Tsai Ing-wen vowed to focus on, the Asia Silicon Valley initiative is similar in nature to the Industry 4.0 movement taking hold around the world, Lin said.

Although Taiwan played an important role in the computer and internet technologies that shaped communications and fueled the third industrial revolution, it still manufactures mostly low value-added products. Now that the fourth industrial revolution is underway, Taiwan must catch up by restructuring its industries. The island already has an excellent foundation in traditional manufacturing, machinery, and information and communications technology, and the government will spare no effort in pushing that transformation, the premier pledged.

Given the high expectations placed on the initiative, the administration spent two months communicating with businesses and startup communities to build wider support and remove barriers in technology, talent, capital and market deregulation.

To establish an “Asia Silicon Valley” in Taiwan, the government has selected Taoyuan City, home to many industrial clusters and a large pool of high-tech talent. If the Taoyuan experience proves successful, it could set an example for other industrial clusters and help keep talent at home, Lin said.

According to the NDC, the Asia Silicon Valley plan contains one ecosystem, two objectives, three links and four strategies: The ecosystem will be built around innovative startups with a heavy focus on research and development (R&D). The two objectives are to foster that ecosystem and promote innovative R&D for internet of things (IoT) industries. The three links will join local industries together, connect Taiwan to the world, and build links to the future. The four strategies will tie Taiwan to Silicon Valley and other global tech clusters, turning the island into an innovative startup destination for young Asians and creating new industries for the next generation.

Specifically, the four implementation strategies are as follows:
1. Create a robust startup and entrepreneurship ecosystem by cultivating innovative talent, providing business expansion capital, and adjusting laws for a friendlier startup environment.

2. Establish a one-stop service center to integrate the R&D capabilities of Silicon Valley and other global innovation clusters. Participate actively in international standards formulation and certification of IoT-related technologies.

3. Integrate Taiwan’s hardware advantages into software applications. Commercialize research findings of universities and research institutes.

4. Establish a quality internet environment, build diversified smart test beds, and develop applications based on smart logistics, smart transport and smart medicine.

The plan’s implementation period will run from 2016 to 2023, the NDC said. A budget of NT$11.3 billion (US$357.9 million) has already been allocated for 2017 for internet infrastructure, mobile broadband services, e-commerce, smart applications, test beds, industry-university collaboration, digital talent and regulatory adjustment. Of the 2017 budget, NT$5.7 billion (US$180.5 million) is earmarked for new plans and the remaining for existing plans. Budgets for later years will be reviewed on a rolling basis, allocated according to actual needs and used efficiently.

Projecting the combined impacts of the Asia Silicon Valley plan and other digital economy plans, the NDC expects Taiwan’s IoT global market share to climb from 3.8 percent in 2015 to 4.2 percent in 2020 and to 5 percent in 2025. The plan is also aiming to grow 100 successful companies—either local startups enjoying successful exits or large corporations setting up R&D centers in Taiwan. Other objectives include establishing three global system integration companies in Taiwan, attracting investments from two international corporations, and creating one online learning platform for IoT industries.


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