Asia Silicon Valley Development Plan driving industrial upgrades and transformation

  • Date: 2017-05-02

I. Background

On September 8, 2016 the government approved the Asia Silicon Valley Development Plan, which is designed to bring next-generation industry to Taiwan. By harnessing advanced technological research and development results from around the world, the plan hopes to use the internet of things (IoT) to spur domestic industrial transformation and upgrades, and drive economic growth through innovation and entrepreneurship.

The Asia Silicon Valley plan, flagship of the government’s “five plus two” innovative industries program, is applying innovative thinking to every facet of economic development including law, finance, personnel, international connectivity, IoT value chains and demo sites.

To embrace innovative economic development trends and opportunities, the government will continue to promote innovation, entrepreneurship and the IoT throughout the Taiwan economy. It will also be promoting new application services for mobile lifestyles, artificial intelligence, automated driving and piloting, augmented and virtual reality, and information security for the IoT to develop new operational models for the digital economy.

II. Promoting an Asia Silicon Valley: Achievements

A. Building a comprehensive ecosystem to support innovation and entrepreneurship

1. Financing assistance provided: The National Development Fund (NDF) has earmarked NT$100 billion (US$3.29 billion) for an industrial innovation and transformation fund established in July 2016. In March of 2017 the NDF approved an angel investor program to support innovation with NT$1 billion (US$32.9 million), to be used in conjunction with private sector angel investors for joint investments in innovative industries. The NDF also earmarked another NT$1 billion (US$32.9 million) to provide operating capital for social enterprises. Finance-related organizations also raised NT$270 million (US$8.88 million) to set up an innovation and entrepreneurship fund, primarily to support innovative companies.
2. Enhanced ability to attract and develop new innovative talent: To provide incentives for foreign professionals to work in Taiwan, in October of 2016 the Executive Yuan approved a program to help Taiwan retain talent, and in April of 2017 approved a draft bill to help recruit and retain foreign professionals. The administration is also actively advocating an entrepreneurial visa program aiming to issue 200 such visas per year, and will send at least 50 doctoral degree holders to Silicon Valley in the U.S. each year to enhance mutual interaction and communication.  

3. Formulated innovative laws and regulations: The Statute for Industrial Innovation was amended to provide tax relief for venture capital firms and angel investors, thereby promoting the development of high-risk innovative firms by helping such firms raise funds. The Financial Supervisory Commission has also completed a draft law that provides a regulatory sandbox for financial technology companies to create innovative financial products and services. The Ministry of Science and Technology has also drafted amendments to the Fundamental Science and Technology Act to ease restrictions on faculty and students starting up new companies, and has sent the amendments to the Legislature for deliberation.

4. Provided venues to foster innovation: In November 2016 the Executive Yuan established two bases for young entrepreneurs in central and southern Taiwan, respectively, and the government will assist local governments set up entrepreneurial clusters. A dedicated demo section for innovative virtual and augmented reality applications will also be set up at Computex Taipei 2017, the world’s second-largest computer show, to give demo space to selected small and medium-sized enterprises and innovative firms.

B. Connect with international research and development capabilities

1. Established the Asia Silicon Valley Development Agency (ASVDA): To accelerate progress on the Asia Silicon Valley plan, the agency was established in Taoyuan in December 2016, and a program office was opened in Silicon Valley in the U.S. in January 2017. The agency’s goal is to forge links with key resources including global advanced technology research and development capabilities, as well as international talent, financial backing and markets.

2. Established links with international enterprises: Microsoft has already opened an IoT innovation center in Taiwan, and Qualcomm will also set up a laboratory dedicated to technology research and development for the IoT, 5G and the internet of vehicles. The chief investment officer from Taiwan’s ASVDA also participated in the Global Entrepreneurship Congress held in South Africa in March 2017 to raise Taiwan’s visibility.

3. Linked innovative enterprises: The government helped organize 2016 Meet Taipei (a forum and exhibition for innovation and entrepreneurship). The Taiwan Startup Stadium, which helps entrepreneurial teams from Taiwan penetrate international markets, also led 12 teams to take part in large-scale entrepreneurial activities in the eastern U.S., linking up with the New York area entrepreneurial ecosystem.

C. Create an IoT value chain

Major League IoT was launched in December of 2016 to link government demo programs and shape industrial standards. The agency already has over 140 members comprising well-known major manufacturers, small and medium-size enterprises, startup communities and industry associations that have submitted 52 concrete proposals in eight categories including smart transportation and smart health care.  

D. Smart demo sites

At this stage, a major task in developing the IoT industry is promoting smart city demo sites, testing and certification. Efforts will initially focus on smart transportation, smart health care and IoT application platforms, all of which should work to drive domestic industrial growth. One example is using smart transportation technology to deploy Wi-Fi mobile internet services on buses at the Taiwan Taoyuan International Airport.

III. Conclusion

Taiwan’s first wave of industrial development was driven by continuous technological innovation, and the wave that followed saw the information industry become a major source of economic growth. Today, we have the Asia Silicon Valley Development Plan, Taiwan’s industrial wave of the future.

Under that plan, launched less than one year ago, the government has already set up offices in Taiwan and Silicon Valley, forging connections with high-level international talent, funding sources and markets. Major League IoT was also launched to gather and consolidate industrial capabilities. Future plans call for enhancing links with innovative industries in the agriculture, machinery and medical biotechnology sectors to drive comprehensive industrial upgrades and transformation to restructure Taiwan’s economy.