The Asia Silicon Valley Development Plan

The Asia Silicon Valley Development Plan From IT to IoT Engineering a New Industrial Transformation for Taiwan Kung, Ming-Hsin Chief Executive Officer Asia Silicon Valley Development Agency September 11, 2017

Outline IoT Development Vision and Strategies Implementation Goals Why Taiwan? 2

IoT Development 3

Forecast of Global IoT Economic Value by 2025 Source: IOT ANALYTICS: IoT Market Forecasts at a glance 4

Global Potential Economic Impact of the IoT in 2025 Source: McKinsey, 2015 5

Vision and Strategies 6

Vision Quality Employment Asia Silicon Valley Development Plan Economic Development Innovationdriven Growth Transform and upgrade Taiwan s industrial structure with IoT Drive economic growth with innovation and entrepreneurship 7

Four Strategies and Budget 2017 Optimizing Taiwan s startup and entrepreneurship ecosystem (9 projects: NT$1.65B) Establishing demonstration sites for smart products and services (19 projects: NT$3.97B) Enhancing linkages with renowned tech clusters worldwide (4 projects: NT$0.3B) Completing IoT value chain (19 projects: NT$4.51B) Ministries MOEA MOST MOTC MOE MOHW Others Total Budget 2017 7.44 (71.3%) 1.95 (18.7%) 0.55 (5.2%) 0.30 (2.9%) 0.14 (1.3%) 0.06 (0.6%) 10.44 (100%) Unit: NT$ Billion Source: DGBAS 8

1 Optimize Taiwan s Startup and Entrepreneurship Ecosystem (1/5) Build an IoT & start-up ecosystem with heavy focus on R&D Business angels, VCs, accelerators Capital assistance National Central Univ., National Taiwan Univ., National Tsing Hua Univ., National Chiao Tung Univ. and others Universities Policy Environment Legal & accounting services Regulatory adjustment Social Network Infrastructure Startups established by universities, research institutes and corporations Startups launched with entrepreneurial spirit Innovative R&D centers founded by multinational corporations Startups R&D Clusters Corporations Taiwan corporations, e.g. Acer, Inventec, Chunghwa Telecom, Advantec, Asus International corporations, e.g. Cisco, HPE, IBM Recruitment services Talent exchanges Research Institutes Industrial Technology Research Institute (ITRI), Institute for Information Industry (III), and other prominent global institutes Link and integration platforms Test beds and supportive policies Local Industries and Environment 9

1 Optimize Taiwan s Startup and Entrepreneurship Ecosystem (2/5) Increase talent supply Global talent attraction Local talent cultivation Improve university startup regulations and incubation mechanisms Provide financial support to post-doctoral fellows to study or train overseas and learn about global innovation trends Deregulation of overseas recruitment and retention Relax restrictions on attracting foreign students Strengthen function of "Contact Taiwan", the onestop online talent recruitment service 10

1 Optimize Taiwan s Startup and Entrepreneurship Ecosystem (3/5) Provide business expansion capital Increase early-stage investments Relax IPO listing requirements and lower transaction costs Establish national investment company, industrial innovation & transformation fund etc. Startup grants Small Business Innovation Research Program (SBIR) Business revenue Early-stage investments Go Incubation Board for Startup and Acceleration Firms (GISA) Business Angel Program Taiwan Silicon Valley Technology Fund HeadStart Taiwan Investment program Program for Financial Support of Creative Enterprises Young Entrepreneur Startup Financing Loans Micro Biz Loans Angel Fund, Startup Fund Equity Crowdfunding Platform Special Project Loans for Innovation & Development of SMEs National Investment Co. Management Fund up to NT$10 B Later-stage investments Industrial Innovation & Transformation Fund up to NT$100 B Capital market fundraising (stock exchange listing) IPO Preparation Stage Seed Stage Startup Stage Expansion Stage Mezzanine Stage 11

1 Optimize Taiwan s Startup and Entrepreneurship Ecosystem (4/5) Adjust laws and regulations Laws and regulations related to the Digital Economy Current major economic legislation Fundamental Issues Cyber security and personal information protection Establishment and operation of corporations Digital assets and corporate fundraising Digital talent cultivation and recruitment Digital governance Regulatory sandbox Application Issues Remote medical services and healthcare E-commerce Fintech services Sharing economy Internet of Things (IoT) Income Tax Act Deregulation of overseas recruitment and retention Corporate anti-corruption and bribery laws Deregulation of professors and students starting companies on campus Accounting and auditing regulations favorable to industrial innovation Regulations encouraging government to procure products or services from startup companies 19

1 Optimize Taiwan s Startup and Entrepreneurship Ecosystem (5/5) Build an innovation environment Existing Tech Clusters International Entrepreneur Initiative Taiwan 2.0 Start-Up Hub Social Enterprise Hub TAF Innovation Base Measures for the Future Enhance functions of existing local startup clusters, and strengthen connections with clusters throughout Asia Upgrade and transform university incubators to partner with local renowned accelerators Promote collaboration between state-owned enterprises or large corporations and startups and accelerators 13

2 Enhance Linkages with Renowned Tech Clusters Worldwide (1/3) Partner with global innovation clusters for technology, talent, capital and markets ICT AR, VR IoT Semiconductors Smart Manufacturing Digital Education Smart Tourism National Investment Co. Innovation R&D Center Smart Energy Forge connections with R&D capabilities of Silicon Valley and other global innovation clusters 14

2 Enhancing Linkages with Renowned Tech Clusters Worldwide (2/3) Asia Silicon Valley Development Agency (ASVDA) Set up on December 25, 2016 Facilitating business corporations Integrating resources to promote IoT and startups ASVDA Bay Area Office Set up on January 14, 2017 Integrating resources of Taiwan Government s innovation and entrepreneurship overseas Helping local startups go to the U.S. Smart City Working Group A Taiwan-U.S. Smart Cities Working Group launched in April 2017 Global Entrepreneurship Congress (GEC) 2017 CIO of ASVDA presenting the Asia Silicon Valley Development Plan in GEC 2017 in Johannesburg, South Africa 15

2 Enhancing Linkages with Renowned Tech Clusters Worldwide (3/3) Microsoft IoT Innovation Center Launching in Taiwan in Oct 2016 to help Taiwanese corporates to come up with IoT solutions Qualcomm Technology Lab - Taiwan Founding in Nov 2016, focusing on IoT, 5G, IoV etc. Assisting Taiwanese companies in areas of advanced technologies, service design and product launch FbStart Accelerator Setting up in Taiwan in March 2016 Cooperating with AppWorks and TSS, providing tools and services to Taiwan s startups Introduce global startups into Taiwan 24 global startups invited to exhibit at InnoVEX 2016. Eight teams successfully partnering with Taiwan corporates 44 global startup teams displaying at Meet Taipei 2016 6 leading startup entrepreneurs including Sigfox co-founder visiting Taiwan under the Visiting Entrepreneurship Program Help Taiwan startups go global Taiwan Startup Stadium (TSS) leading 12 local teams to display at Disrupt San Francisco 2015 & 2016 TSS also building network with New York startup communities More European presence in Taiwan La French Tech set up Taiwan office at end of 2016 Austrian startup delegation will visit Taiwan in July 2017 16

3 Build a complete IoT Value chain(1/5) Promote innovation of IoT related technology, and help businesses carry out cross-field integration Industrial innovation & transformation fund Help existing hardware MFRs to transform themselves into system integrators Target sectors such as sensors, networks and services, and get involved in standard formulation and patent registration Build an IoT ecosystem Develop industries to fill the existing IoT tech gap Enhance software capabilities Commercialize IoT research findings Develop university courses, both in-class & online, on software & hardwaresoftware integration Encourage university spin-offs, research spinoffs, or collaboration with startups 17

3 Build a complete IoT Value chain(2/5) 4th Layer Application services IoT service (transportation, energy, commerce, manufacturing, medicine) big data analysis operational intelligence analysis data mining service big data security business intelligence applications data: income, operations 80% of IoT business opportunities to come from services 3rd Layer Data collection data center software as a service (SaaS) quality control and service management cloud service customer needs management 2nd Layer Internet infrastructure broadband (DSL, fiber optic) mobile broadband (3G, 4G, 5G) wireless personal area network (NFC, Zigbee) satellites, GPS Wi-Fi Taiwan s strengths 1st Layer Object detection gateway smart lighting e-healthcare sensing device energy management in-vehicle network smart plugs smart appliances smart grids IoT platform protocols Taiwan s strengths Source: Market Intelligence & Consulting Institute, Industrial Economics and Knowledge Center 18

3 Build a complete IoT Value chain(3/5) Establishing Major League IoT, ASVDP formulating Industrial standards Major League IoT, ASVDP Organizing a prototype national team providing policy suggestions linking to government demonstration programs 19

3 Build a complete IoT Value chain(4/5) Major League IoT, ASVDP Composed of Acer, MediaTek Inc, Advantech, Cisco, Microsoft, IBM and other corporations, associations, startups, SMEs, and institutes More than 230 companies and institutes registered as members. Two general meetings have been held so far. Multinational Corporations Cross-industry Cooperation Domestic Enterprises Industrial Alliance/Association Startup Associations Research Institutes SMEs 20

3 Build a complete IoT Value chain(5/5) SIG Meetings Held in Feb and May 2016 respectively. Hundreds of people from various companies attended Discussion focusing on 8 areas including smart transportation, smart healthcare, industry 4.0 etc. Smart Transportation Smart Homes Smart Manufacturing (or industry 4.0) Smart Healthcare Smart Agriculture Smart Business Smart Logistics Smart Energy and Environmental Scanning 21

4 Construct Diversified Test Beds for Smart Products and Services (1/3) Exploit Taiwan s strengths and advantages to tackle local and global problems Maximize Taiwan s strengths to develop new industries such as smart logistics, future cars, healthcare, smart robots and smart cities Make best use of Taiwan s uniqueness, e.g. a comprehensive medical database derived from the National Health Insurance system Help solve global issues such as healthcare, medical services, food safety etc. 22

4 Construct Diversified Test Beds for Smart Products and Services (2/3) Test beds for demonstration Nationwide: AR, VR, e-commerce City/county-wide: Smart logistics, healthcare, commerce, cities and grids; make industrial parks smarter Regional: e.g. Smart transportation for Keelung, Taipei, Taoyuan, and Hsinchu; smart manufacturing in central Taiwan; smart energy in southern Taiwan; and smart tourism in eastern Taiwan IoT ICT Semiconductors Smart manufacturing Smart energy AR, VR Smart tourism Digital education Smart logistics Smart healthcare Smart transportation Smart industrial parks 23

4 Construct Diversified Test Beds for Smart Products and Services (3/3) Establishing Demonstration Sites for Smart Products and Services Focusing on popular issues such as smart transportation, smart healthcare etc. Smart City Demonstration Testing and verifying technologies and buz models at selected demonstration sites Expanding to the Island s other cities and overseas markets Promoting serviceoriented solutions MOEA is launching a grant scheme and calling for proposal for Smart City solution 24

Future Focus

Future Focus ASVDP will concentrate on the following six plus one key areas in the future IoT Cybersecurity Self-driving Cars AR/VR Startup Mobile Life AI New Southbound policy and Global Linkage 26

Implementation 27

The Plan s Implementation Center Coordination Committee for collaboration among industry, governments (central and local), universities & research institutes Chief Executive Officer Think Tank Chief Research or Technology Officer (CRO or CTO) Chief Human Resources Officer (CHRO) Chief Financial & Investment Officer (CFO & CIO) Chief Legal and Environmental Commitment Officer (CLO & CECO) Chief Administrative Officer (CAO) 28

Goals 29

Qualitative Goals Connect to Silicon Valley and other global tech clusters Forge connections with their advanced R&D capacities and make Taiwan the best partner for global corporations with good potential Develop industries for the next generation Make Taiwan a leading global tech cluster for the Internet, Big Data, IoT and other new industries Future Industry Development Taiwan- Silicon Valley Connection Innovation & Entrepreneurship Become an innovative startup destination for young Asians Optimize Taiwan s startup ecosystem by incubating local startup teams and bringing outstanding global talent to Taiwan 30

Quantitative Goals 5% Increase Taiwan s IoT global market share from 3.8% in 2015 to 4.2% in 2020 5% in 2025 (Projection of combined impacts of the Asian Silicon Plan and other digital economy plans) 100 Grow 100 successful companies, either local startups enjoying successful exits or local R&D centers set up by large corporations 3 Develop and establish 3 global systems integrators in Taiwan 2 Successfully attract investments from 2 world-class companies 1 Create 1 online learning platform for the IoT related sectors 31

Taiwan is leading in the world PC / Notebook (No.1) IC design (No. 2) Bicycle (No.1) LCD panel (No. 2) IC Foundry (No.1) Tablet (No. 2) Server (No.1) 5 companies rank among the world s Top 10 Original Design Manufacturers (ODM) 140,000 Manufacturing SMEs Sources : Industrial Development Bureau 2015 statistics 33 Copyright National Development Council. All Rights Reserved.

Mozilla 2016 Report The 9 th largest country in terms of total developers The 5 th hottest app development cluster (Taipei) HackerRank 2016 Report The 7 th best developer in the world 34 Copyright National Development Council. All Rights Reserved.

Taipei Within 1 hour s drive One can access Market of 10M+ people 70+ hi-tech clusters & software parks Top 3 universities Main international airport Two international ports Taiwan Central government Sources : Wikipedia 35 Copyright National Development Council. All Rights Reserved.

Beijing Shanghai Seoul Tokyo Strategic Location in the Asia-Pacific region Taipei 2 Hours Hong Kong Bangkok 2.55 hours (avg.) 5 Hours Singapore Sources : Invest Taiwan 36

Easy to do business 4 th in Asia (World Bank : Ease of Doing Business 2016) Great IPR protection 4 th in Asia (The International Property Rights Index 2016) Abundant creative talents 1 st in Asia (The global competitiveness report 2016-2017 - Innovation Capacity) Strong entrepreneurial spirit 1 st in Asia (Global Entrepreneurship Index 2016) The best place for expats 1 st in the world (InterNations Expat Insider Survey 2016) 37 Copyright National Development Council. All Rights Reserved.

Taiwan Internet of things new company 4th Layer Application services 3rd Layer Data collection 2nd Layer Internet infrastructure 1st Layer Object detection 2013-2017.7 total of new companies 196,946 10,994 5,311 1,372 7,326 4,025 Emerging application potential industry 15,019 資料來源 : 經濟部商業司財政部財政資訊中心

The number of applications services companies has increased significantly in the past 12 months 4th Layer Application services 1st Layer Object detection 3rd Layer Data collection 2nd Layer Internet infrastructure 資料來源 : 經濟部商業司財政部財政資訊中心