An Era of Digital Transformation in Taiwan

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Interview with Tsai Zse-hong, Former Executive Secretary of the Executive Yuan Board of Science and Technology (BOST), and Li Chih-peng, Director General of the Department of Engineering and Technologies, Ministry of Science and Technology (MOST).

Taiwan as a Key Player in the Digital Era

Over the last four decades, digital technology has rapidly evolved from the first IBM industrial computers and the first generation Apple computers to the Internet and smartphones and now to an era of AIoT (artificial intelligence of things). During this time, Taiwan’s tech industry has been a global leader in this revolution, most notably in the areas of semiconductors, cutting-edge ICT (information and communications technology), and comprehensive supply chains. As the world continues toward a digital future of 6G, autonomous vehicles, space technology, and other digital innovations, Taiwan is positioned to maintain its leadership role in the digital era.

Tsai Zse-hong, professor in the Department of Electrical Engineering at National Taiwan University and former executive secretary of the Executive Yuan Board of Science and Technology (BOST), states that “As Taiwan moves toward digital transformation, the popularized higher education and comprehensive broadband infrastructure will be its core strengths.” Taiwan’s world-class tech talent has attracted major companies such as Google, Microsoft, and Amazon Web Services (AWS) to establish hubs in Taiwan and recruit even more Taiwanese talent in recent years. According to the World Competitiveness Yearbook published by the Switzerland-based International Institute for Management Development (IMD), Taiwan boasts the second-highest total R&D personnel per capita worldwide. As a testament to the nation’s high academic standards, Taiwanese students ranked among the top five in the 2019 Trends in International Mathematics and Science Study (TIMSS) on performance in math and science. In 2020, 90 percent of the country had access to 1Gbps broadband Internet, exceeding that of many other developed countries. This standard of excellence in infrastructure, talent, and education are all evidence of Taiwan’s competitiveness and great potential in the world’s digital transformation toward a smart country. 

The 5G Era: Changing Life as We Know It Through AI

Li Chih-peng, director general of the Department of Engineering and Technologies, Ministry of Science and Technology (MOST), believes that the goal of digital transformation is not only to increase work efficiency but also to create new business value and services. The World Economic Forum estimates that digital transformation will create a value of USD$100 trillion worldwide in 2030.

Li points out that digital transformation is a golden opportunity to reconstruct Taiwan’s industrial competitiveness. Before the age of wireless technology, machine data collection was an arduous task for factories. Now, 5G networks and smart algorithms have the potential to greatly boost management efficiency. In order to spur industries to utilize AIoT and transforming value added by digital technology, the Executive Yuan launched the Digital Nation and Innovative Economic Development Program (DIGI+) in 2017. Additionally, in 2020, MOST has named industrial digital transformation as one of its six core strategies for future development. Such government policies and programs have enabled the ICT, manufacturing, and service industries to transition toward developing high added value digital applications and services. With a shift in focus toward AIoT technology, Taiwan’s domestic industries will continue to lead the world in the digital age, further bolstering Taiwan’s international competitiveness.  

Tsai notes that the government efforts dedicated to AI are coming to fruition. Collaborations between academia and industry in AI technology, smart manufacturing, and smart medical treatment have also given rise to many success stories. These cases all show how Taiwan is leading the charge toward digital transformation. At the industrial level, the Formosa Plastics Group has successfully integrated AI technology into its manufacturing process. Unicorn startup Appier, Taiwan’s first AI company, has also been listed on the stock market and has been recognized as one of the world’s top 50 AI companies by Fortune magazine. 

Building Smart Competition with Forward-Thinking Internet Infrastructures

With the shift toward online-to-offline (O2O) integration, Li believes further advancements in telecommunication technology will be essential. To this end, the government has invested in fostering industrial development of 5G/B5G wireless communication networks and 6G technology. The Forward-looking Infrastructure Development Program was also formulated in response to recent developments in US-China and Taiwan-US ties and Taiwan’s inclusion in the Pacific Light Cable Network project by Google and Facebook. The program calls for the construction of advanced Internet infrastructure in Taiwan so it may serve as a key cloud service hub in the Asian-Pacific region by 2025. The National Center for High-Performance Computing (NCHC) headed by MOST’s National Applied Research Laboratories (NARLabs) has launched the Construction Plan of Submarine Cables and 5G Cloud Data Center, and the Improvement Plan of Internet Service and Calculation Infrastructure for the Public Sector to bolster network connectivity and back-up networks at both the domestic and international level. Other objectives include the facilitation of undersea cable construction in Taiwan by international enterprises, optimization of the integrated application environment for public digital infrastructures, quality improvement of public services, and the creation of diverse types of value in digital transformation. The Executive Yuan announced their vision of “2030 Taiwan: Innovation, Inclusion, and Sustainability.” The construction of forward-looking network infrastructures is one of six priority areas for development in this vision. The Executive Yuan hopes that the establishment of a national submarine cable center will not only improve Internet connectivity for both the government and people, but also attract international enterprises to host their content delivery networks (CDN) and information centers in Taiwan, allowing Taiwan to become a key information hub in the Asia-Pacific region.

Li explains that 5G is characterized by its high capacity, low latency, and high reliability, but 5G mmWave has a lowered coverage rate and can be restricted by topography. This makes it slightly inferior to 6G. Therefore, the key to future 6G communication will be the connection between low-Earth orbit satellites and ground communication facilities. Such technology will have the potential to provide 3D (land, sky, and sea) coverage for global communication and will be crucial in the continued expansion of wireless communication coverage. Strengthening the connection linking satellites to ground receiving stations and mobile devices will allow previously-inaccessible areas such as remote villages, high mountains, and ships at sea to access wireless communication coverage. Tsai stresses that low-Earth orbit satellites can also support 5G networks in addition to providing the needed communication network for the Internet of Vehicles (IoV). These satellites will ensure that IoV has uninterrupted connectivity and accurate navigational services for self-driving mode. When telecommunication services are unavailable, satellites can continue to provide communication and navigational services. Taiwanese enterprises are becoming key players in the advancement of this satellite technology, working with leading satellite manufacturers in Europe and the US such as SpaceX, OneWeb, and Kymeta. NASA and ESA have also recognized the excellence of Taiwan’s tech industry and have made Taiwanese companies their official suppliers. The future is bright for Taiwan as it becomes a critical R&D and supply chain partner in the international space, national defense, and aerospace industries.

COVID-19 Prevention is a Key Opportunity for Digital Transformation

COVID-19 has increased the demand for digital technologies. According to Li, the pandemic has pushed the government to increase the pace toward digital transformation. For Taiwan, key opportunities will arise from the incoming need for facilities, services, and talent. The continuous development and innovation borne from this wave of digital transformation will also provide many possibilities. Reassessing the use of applications such as remote technology, AI (artificial intelligence), big data, IoT (Internet of things), and hybrid cloud infrastructure is a must for all sectors to sharpen their adaptive abilities in these ever-changing times. 

Tsai underscores the significant growth of the “Low-Touch Economy” (also known as “Zero-Contact Economy”) during the pandemic, most visibly in remote medical care, remote learning, work from home, delivery services and mobile payments. In Taiwan, government-industry partnerships have changed the very fabric of business and commerce—the increased use of e-passes and e-wallets are proof that business practices, transactions, and meetings previously dependent on in-person contact are transforming and going digital.

All Doors Lead to Taiwan’s Digital Transformation

According to the World Economic Forum, Taiwan ranks fourth in innovation capability and is considered a super innovator. Tsai points out that Taiwan’s years of efforts have won international recognition, most notably in its handling of the COVID-19 crisis. Taiwan provided an example to the world through its swift prevention measures and its push to embrace digital transformation. 

Facilities, services, and talent are drivers of the digital transformation. In recognition of this, the Taiwanese government has coordinated interministerial policymaking and invested resources into technological development. MOST’s proposals to enhance productivity and services in science parks by integrating facilities and services; support the research and development of AI, big data, and advanced telecommunication networks; and provide funds for forward-thinking research projects in the semiconductor industry (e.g., The Moonshot Project and the Generation Å Semiconductor and Compound Semiconductor Research Project). These initiatives have already proven successful in the development and digital transformation of the IT industry, and Taiwan continues to put forth additional forward-looking policies for further advancement. Taiwan’s digital transformation will continue to redefine traditional conceptions of industry and lead the country toward becoming a world-class digital nation and a land of intelligent technology.

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