Asia Silicon Valley Development Plan

  • Date: 2016-09-22

I. Introduction

The Asia Silicon Valley Development Plan is an important component of government efforts to promote next-generation industrial growth. It is also a key component of the five major innovative industries—along with intelligent machinery, green energy technology, biomedicine and national defense—selected based on President Tsai Ing-wen’s policy blueprint to spur domestic industrial transformation and economic growth.

Drafted by the National Development Council and subsequently approved by the Executive Yuan on September 8, 2016, the Asia Silicon Valley plan focuses on creating a research and development (R&D) intensive ecosystem of innovative startups, and promoting innovative R&D for internet of things (IoT) industries. It will also forge connections between local industries, bring Taiwan closer to the international community, and build links to the future. The plan includes concrete strategies to connect with Silicon Valley and other high-tech clusters, transforming Taiwan into an innovative startup destination for young Asians while creating new industries for the next generation.

II. Focus on developing IoT and enhancing innovative startup ecosystem

A. New government is focusing on innovative IoT R&D as a key industrial policy

1. Improve conditions for the development of an IoT innovation ecosystem.

2. Capitalize on Taiwan’s advantages to set up test beds for the integration of IoT software and hardware.

3. Strengthen domestic and international links to enhance R&D capabilities and participation in standard-setting activities.

B. Use timely and innovative strategic measures to enhance the innovative startup ecosystem

1. Cultivate and recruit innovative talent: Attract and retain foreign talent by creating a friendlier environment in terms of visa applications, employment, residency requirements, financial services, taxes, insurance and an international lifestyle. Provide subsidies for young people and postdoctoral researchers to learn the latest innovation trends through overseas internships and training programs.

2. Build a funding framework: Establish a national-level investment company and an industrial innovation and transformation fund to provide required financial assistance.

3. Create an innovation-friendly legal regime: Reform financial and economic regulations to harmonize with international trends; promote comprehensive regulations on the digital economy by overhauling the Company Act and other laws.

III. Four strategies to promote an innovative startup ecosystem and strengthen international links

The Asia Silicon Valley plan will shift the focus of Taiwan’s industries from information technology to the IoT using the following four strategies:

A. Adopt the Silicon Valley “spirit,” cement ties within Asia and build an ecosystem that supports innovation and entrepreneurship:

Create an environment conducive to innovation and entrepreneurship by cultivating and attracting innovative talent, providing funding assistance, optimizing the regulatory environment, strengthening the functioning of innovation clusters and their connectivity with their international counterparts and providing venues for innovation activities.

B. Increase connectivity with international R&D capabilities, including Silicon Valley, to set up innovative R&D bases:

1. Introduce innovation capabilities from Silicon Valley and other innovation hubs: Establish an innovative R&D center as a single promotional window; integrate resources across government agencies, import overseas technology, and actively negotiate and cooperate with foreign venture capital to bring their R&D and innovation capabilities to Taiwan.

2. Link domestic and overseas resources to develop IoT standards and capture business opportunities: Combine R&D resources of colleges and universities, research institutes, and incubation centers to form an alliance that integrates IoT organizations; consolidate industrial R&D capabilities and connect with Silicon Valley and other innovation clusters to develop next-generation IoT standards and business opportunities.

C. Integrate hardware and software to increase Taiwan’s soft power and build a comprehensive IoT supply chain:

Leverage innovation capabilities and academic resources to strengthen Taiwan’s soft power; help academic and research institutes commercialize IoT R&D results; identify gaps in IoT technology to build a complete IoT ecosystem.

D. Combine cyber and physical clusters to provide diversified demonstration sites for innovative and intelligent technologies:

Encourage central and local governments to work with international companies in conducting field verification; strengthen hardware and software integration as well as system deployment; establish an Asia-Pacific IoT testing center to tap into the global IoT market; give priority to smart applications in logistics, transportation and health care when implementing smart services pilot programs.

IV. Expected benefits

By combining the Asia Silicon Valley plan with other digital economy programs, Taiwan’s share of the global IoT market is projected to climb from 3.8 percent in 2015 to 4.2 percent in 2020, and to 5 percent in 2025. The plan also aims to grow 100 successful companies—either local startups that have successful exits or enterprises that set up R&D centers in Taiwan; establish three global system integration companies in Taiwan, attract investments from two international corporations; create one online learning platform for IoT industries.

V. Conclusion

The Asia Silicon Valley Development Plan is one of the government's most important industrial development programs. It does not seek to create a domestic replica of Silicon Valley. Instead, this plan aims to transform Taiwan into an innovation base with strong links to Silicon Valley in the U.S. and high-tech clusters in Asia. Through these links with renowned global technology clusters, Taiwan will become an integral part of international trends in the fast-developing digital economy, improve domestic technologies, and engage in international talent exchanges. This will turn Taiwan into a global base for internet technology, big data and IoT enterprises, as well as an Asia-Pacific base for creative young people ready to start their own businesses. All of these efforts are designed to help Taiwan achieve its vision of becoming a “digital country and intelligent island.”