One year has passed since Tsai Ing-wen was elected by voters as president of Taiwan. With much fanfare, the Tsai administration is following through on one of her campaign’s most high-flying promises: to turn the island into the Silicon Valley of Asia. The focus of the ASV initiative is on the internet of things (IoT), a concept that refers to a seamless network of smart electronics ranging from, but not limited to, refrigerators, health devices, and cars.
The Asian Silicon Valley (ASV) Development plan (亞洲．矽谷推動方案)—which was formally announced in September 2016—is slated for completion in 2023. The newly formed National Development Council (國家發展委員會) under the Executive Yuan has set aside a budget of NT$11.2 billion (US$354.7 million) for 2017 to go towards “internet infrastructure, mobile broadband services, e-commerce, smart applications, test beds, industry-university collaboration, digital talent and regulatory adjustment.”
Indeed, the Tsai administration has come out of the gate full-throttle. After taking office in May 2016, the Tsai government notably established the Asia Silicon Valley Development Agency (ASVDA; 亞洲．矽谷計畫執行中心) to implement its ambitious plan to transform Taiwan from a leading manufacturer of high-technology products to an innovator of those technologies—as embodied by the Silicon Valley model. The executive director of this new agency, which has offices in Taipei City, Taoyuan City, and Sunnyvale (California) is dual-hatted as deputy minister of the NDC: Kung Ming-Hsin (龔明鑫).
Yet, despite the apparent bipartisan agreement on the campaign trails about the need to prop up Taiwan’s ailing technology industry—which has languished in recent years, in part due to intense global competition and regulatory stagnation—opposition lawmakers are raising red flags about what they see as misguided priorities. To be sure, Kuomintang (KMT) legislator and TEDxTaipei founder Jason Hsu (許毓仁) has criticized the plan as being more for show, and has suggested that the administration instead focus on “internet business regulations [and] plans to recruit skilled talent, or [to] improve the financial and technological environment.”
In this special issue of the Global Taiwan Brief, we asked three contributors with a broad range of expertise to share their observations about the opportunities and challenges ahead for the ASV initiative. One expert, David Weng, served as a key architect of the ASV initiative and, in his piece, describes the plan’s implementation schedule. Another contributor is tech entrepreneur Arthur Tu, whose experiences in helping tech startups in Taiwan provide unique insights into the challenges that will be faced at a more granular level. The third author, Lotta Danielsson, is Vice President of the US-Taiwan Business Council—the leading industry voice for stronger business ties between the United States and Taiwan—and offers a US business perspective on the ASV initiative. This issue provides a follow up to a special seminar that the Global Taiwan Institute organized in December 2016.
The Tsai administration should be applauded for recognizing the “disruptive” potential of the IoT, but unleashing its economic potential is not a simple or easy task. In the United States, multiple government agencies that span sectors and industries are responsible for regulating it: the Food and Drug Administration, the Federal Communications Commission, the Federal Trade Commission and the National Highway Traffic Security Administration. The convergence of these technologies and previously separate sectors wrought by IoT is creating regulatory overlap that threatens to bog-down innovation by creating excessive red tape. To streamline these efforts, US lawmakers have proposed the DIGIT Act as a policy framework for IoT.
One of the many difficulties facing the Tsai administration is finding the right balance of regulations that will encourage entrepreneurship and promote innovation, all the while protecting consumers from actual and potential predatory practices. The Tsai government should be applauded for taking this on as a main policy pillar, but the hard work begins now. To truly unleash the full potential of IoT, the Tsai administration will have the unenviable task of governing it and tackling entrenched interests. Whether the Asia Silicon Valley initiative will bear the fruits it was intended to depends on these efforts.
The main point: To unleash the full potential of IoT, the Tsai administration will have the unenviable task of governing it. Whether the Asia Silicon Valley initiative will bear the fruits it was intended to depends on these efforts.