Green Island's Smart Footprint

Green Island’s Smart Footprint

Patrick J. Carmody Industrial Technology Research Institute, commissioned by the Ministry of Economic Affairs-Taiwan Abstract The purpose of this work is to introduce, examine and provide a contextual overview for Ta- iwan’s achievements in the IT sector and to outline a current context for future trends in Ta- iwan’s IT evolution. To achieve this goal, this work analyzes the forces in play involving IoTs, Big Analytics, Open Data, and Smart City initiatives— and how these forces are merging in Taiwan today within a global arena. More specifically, this work examines both local and global industry partnerships, practices in sound governance, and current accomplishments in Smart City initiatives and how these forces will be a catalyzing force that embraces an emerging digital broadband environment and the market demands it brings. Research shows that Taiwan has effectively established an environment conducive for conti- nual success in Smart City development and forging global collaborations in IT development that buoy cross-border fertilization in innovation and know-how. For these things to happen in Taiwan specific precursors must be firmly established. Taiwan’s building blocks in its IT sector are not exclusive to its OEM/ODM manufacturing and semiconductor know-how, but also extends to its ICT advancements, IT solutions and system service provider capacities, and a regulatory environment that has laid the foundations for the next epoch in its IT evolution— its burgeoning Smart City technologies, applications in digital services, and software development. The implications from this examination are far reaching. Taiwan is in a position to leverage its current accomplishments in IT development and open governance to capture and harness future IT trends in the globally-driven IT marketplace. Taiwan’s current regulatory environment and industry success will be a boon to accomplish next steps in its digital evolution and IT knowhow. Ongoing advancement in its “digital inclusion” strategies will be part of the mix in leveraging Taiwan’s success in Smart City development and utilization of IoTs, Big Analytics, embedded sensor technologies, and a rapid expansion in APP creation promoting digital services for urban landscapes. In summary, the crux of this work demonstrates how Taiwan’s IT sector is adapting and responding to new IT trends and developing innovative ways to cultivate global markets in IT development through both public and industry support mechanisms and Smart City initiatives.

1. Introduction not only in its OEM/ODM industrial base, but, Taiwan. Aka the Green Island or sometimes also extending to its ICT business communi- also aptly referred to as the “Green Silicon Is- ty, IT solutions and system service providers, land” are fitting names for a number of rea- green landscape, and urban fabric. Although sons. Beyond Taiwan’s green splendors lies Taiwan may be both nestled in and miffed by something very special— a highly adaptive, diplomatic isolation its place in the “Digital innovative, and creative force— its technology Age” is not. Taiwan’s ability to capture trends sector- imbued with “Smart Powers” stamped in the global IT industry and harness innovation within those trends has been nothing

© Business and Public Administration Studies, 2016, Vol. 9, No. 1 19 Published by the Washington Institute of China Studies. All rights reserved. Green Island’s Smart Footprint short of astonishing. In sync with the head- are a number of existing precursors that must winds driving a dynamic weft of OEM/ODM be properly understood in order to enlighten manufacturing know-how, ICT innovation, forward looking perspectives. It is necessary and IT solutions and system service capacities, to understand the techno-footprint in place Taiwan is wisely turning its attention toward a there today. In broad contours, these precur- new market taking shape within a rising glob- sors include- Taiwan’s key industry initiatives, al urban landscape involving applied tech- public policy success on federal and local lev- nologies and digital services in the Internet els in governance, strategic local and global of Things (IoT), Internet of Everything (IoE), partnerships, and, of course, the impetus of and Big Analytics. Anchored in this triad of its cross-Strait relationship with its mainland trends lies Taiwan’s Smart City initiatives, counterpart. These precursors are a constella- an accelerator and platform for developing tion of synergies mapping a new space for Tai- IoT (Internet of Things) and IoE (Internet of wan’s IT sector in Smart City technologies and Everything) applied technologies (Scroxton, its adjacent supporting industries. 2015, p. 22). Taiwan’s Smart Cities are a spark point for kindling the development and ad- 2. The Stage, IoT, IoE, vancement of Smart City innovation and ap- Big Analytics and Urban plied technologies. This event reflects an up- Development ward trend in a new market layered in a global The idea of a Smart City encompasses a broadband digital economy offering new op- broad range of implications and meanings. portunities for Taiwan’s technology sector, But, fundamentally, a Smarty City is an ur- city leaders, and urban citizens. To put this ban center which utilizes its big data analyt- in a broader context, this unfolding economic ics through the power of IT to improve eco- development will not be exclusive to Taiwan’s nomic development, and the management of national economy but, rather, part of a larger resources that elevate the quality of life for its global network composed of digitally-based city citizens and respective stakeholders. In urban centers. Within its minutiae, there are more narrowly sculpted terms, this will mean global stakeholders engaging in unique part- advancing “digital inclusion” for public and nerships including software developers, in- private stakeholders to develop innovation frastructure technocrats, public leaders, and in critical modern infrastructure, broadband manufacturing/ICT leaders. These partner- technologies and applications, digital services, ships will evolve within a “system of systems”, market growth, and cost saving strategies in a complex internet-wired environment where public budget planning. Essentially, success in a new convention of interlinked intranets will digital inclusion brings with it a makeover in emerge in urban landscapes facing shrinking upgrades at all levels of the urban and indus- public budgets. In this space, public private trial fabric. partnerships (PPPs) are converging to both A Smart City is a corridor, a place for sand- support and promote cross-border fertiliza- boxing out-of-the box models, for the imple- tion in innovation and commercialization of mentation and tinkering of Internet of Things new hardware technologies, embedded sensor by offering a space for applying automated technologies, software development, and open technologies and innovation directly into an data services. In this dynamic, Taiwan will al- urban fabric via the development of digital ways do what it does best- adapt and thrive. services. The development of digital services To illuminate how this emerging market will and urban management strategies work in be a catalyzing force on the Green Island, and concert to improve transportation, public how Smart City initiatives will act as an axes for safety, emergency management, tourism, re- future achievements in digital frontiers, there tail, smart buildings, production monitoring,

20 © Business and Public Administration Studies, 2016, Vol. 9, No. 1 Green Island’s Smart Footprint healthcare, smart agriculture, smart homes, islation. Legislation guided by enlightened and smart energy and water management policy prescriptions by public leaders has been systems (“Designing Roadmap,” Digitimes, a key factor in continuous commitment to an 2014).To achieve “digital inclusion” within open data platform and open governance. For these urban enhancements, utilizing “Big Ana- example, in 2005- Taiwan’s Freedom of Gov- lytics” as a cornerstone to data driven-decision ernment Information Law enables public ac- advantages in governance and public-private cess to government agencies information, and partnerships (PPPs) is at the forefront of this on the media front, legislation in 2003 barred transformational event. However, for Big Ana- the government and political party officials lytics to be a well spring— there first needs to from holding positions in broadcast media be an open data environment in place. On this companies and requires all government enti- front, Taiwan’s regulatory bodies have set the ties and political parties to divest themselves stage. from all broadcasting assets thereby staving An open data policy is an integral part of the off potential threats to an open and free so- government’s regulatory regime. And accord- ciety- Fluctuat nec mergitur (Freedom of the ing to the Global Data Index (GODI) Taiwan Press, 2015). has achieved full marks in this area. The implications as a whole mean a sand- For data to find utility and become part of box for APP developers to access data for end- data driven decisions the data must be acces- less innovation in digital services for Smart sible, enabled, and usable to fuel creative op- City development and urban planners. This portunity for private and public stakeholders. opens pathways where end users, service pro- According to the 2015 Global Open Data In- viders, energy and waste companies, sensor dex, Taiwan tops the list (Global Open Data network providers, data providers and devel- Index, 2015).Taiwan is a case study in a freer opers merge in a creative nexus of possibil- open society and one where APP/services and ity. Not stopping here, Taiwan’s Industrial telecom companies have an opportunity to Technology Research Institute (ITRI) plans try new things. Through Private-Public-Part- for the upcoming “Smart City Expo Summit in nerships (PPPs) and initiatives put forward March 2016” to review and explore the possi- by the Ministry of Economic Affairs, the - In bility of implementing Smart CitySDK (“ITRI dustrial Technology Research Institute com- Host,”2016). A programing package supported missioned and co-funded by the Ministry of by EU policy initiatives to put in place Appli- Economic Affairs, and Taiwan’s 4G carriers a cation Programming Interface (API) Harmo- creative platform has emerged to enable open nization strategies among EU cities currently broadband digital services in 4G. In parallel, involving Barcelona, Rome, Helsinki, Istan- by pursuing “Open Challenge” strategies to bul, and Lisbon. Harmonizing APIs enables promote a more competitive environment, in- the possibility of interoperability as a means to novation, and market growth the government expand city APP/service capabilities. For this has incentivized an upward trend in 4G devel- vision to gain ground in Taiwan, ITRI, through opment and services through market liberal- government support, is cradling PPP arrange- ization strategies and funding opportunities ments among private stakeholders such as the within the telecommunications sector. More- 4G Carriers and city governments as a field over, these type of national broadband plans to consider CitySDK in a 4G context. If this have been instrumental in establishing trigger approach is adopted and proves successful, points for boosting broadband uptake in ap- this framework will potentially enhance feed- plications and services and utilizing open data back loops beyond Taiwan’s federal and local as means to accomplish that end. context and rather one married to a globally Another key point has been in federal leg- charged knowledge based economy.

In terms of future buddings there are many Smart City initiatives are Siamese Twins. One things to consider, one area of Smart city tech- event cannot occur without the other. In the nology development will be in GSMA-Low area of green achievement, in the face of ris- Powered Wire Area (LPWA). According to ing environmental conflict and urban growth Machina Research and Strategy Analytics it is Taiwan is advancing its future with resolve. As anticipated that there will be 2.7 billion LPWA proof, true to its alias name “Green Island”, connections by 2022 (“GSMA Countless Low New Taipei City has become the first munici- Power,” 2015). Global investments are ex- pality in Asia to achieve full compliance with pected to soar more than USD $27.5 billion by the “Directives of Compact of Mayors” (Her, 2023 (Willis, 2015). By 2019, BI Intelligence 2015). The “Directives of Compact of Mayors” forecasts IoT technologies are expected to was launched in the 2014 U.N. Climate Sum- generate USD $421 billion in economic value mit. It represents a coalition of cities working to cities (Neiger, 2016). In parallel, within the to achieve adaptation and resiliency in climate same timeframe, a growing interconnected change and specific commitments in lower- Smart City market is expected to reach a stag- ing its carbon footprint. This achievement re- gering USD $1.1 trillion dollar market valua- flects a remarkable accomplishment between tion according to Markets and Markets (Ibid). central and local governments to incorporate And by 2025, it is expected there will be 88 innovative public planning strategies. This cities worldwide that have adopted smart city serves as a vivid illustration for a nation work- technologies to support and accommodate ing to blend innovation with urban and envi- shifting demographics moving toward urban ronmental challenges – and a milestone for areas (Willis, 2015). As an example, today in others in Asia to follow. the US alone 82.3% of the population reside In the area of Smart City success, accord- in urban centers/communities and in China in ing to the ICF (Intelligent Community Fo- the coming years 70 percent of the population rum) Taiwan has soared in its ranking system is anticipated to be part of the urban landscape, (“Top7,”2016). In 2006, Taipei ranked first according to China’s software division of the on ICF’s intelligent community rankings and Ministry of Industry and Information Tech- again in 2013 Taichung City placed first. In the nology (Peeples, 2015). And most urgently, by past two years Taiwan’s intelligent communi- 2040 global energy demand is expected to rise ties have achieved a high number of place- by 56 percent, and 50 percent of the world’s ments on the ICF Smart 21 listings. In 2015, population will be living in areas facing water Most Intelligent Communities Finalist 21 List scarcity issues (Willis,2015). On a whole, all of included New Taipei City, Taitung County, these trends will demand better public service Taoyuan County, and Changhua County, and strategies to more effectively manage both en- for its highest scoring- the Top 7 List Taiwan’s ergy and water resources, emergency response New Taipei City found its way on that list systems, and transportation concerns. Effec- (Ibid.). For 2016, the Smart 21 list has already tive “smart powers” will become a crucial com- been published and so far includes Taiwan’s- ponent in managing these dynamics by inte- Kaohsiung, New Taipei City, Hsinchu County, grating technology applications into the urban Taitung County, and Taoyuan County (Ibid.). fabric. In simple economic terms, smart city technologies will fuse with commercial trends 4. Partnerships: Cross-Border in supply and demand side economics. Fertilization in Innovation Taiwan’s ability to attract international 3. Taiwan’s Green Achievements partnerships is a prerequisite to effectively and Smart City Scorecard ride global technology trends and house local Taiwan’s green achievements and success in and international incubation strategies. Tai-

22 © Business and Public Administration Studies, 2016, Vol. 9, No. 1 Green Island’s Smart Footprint wan’s IT engineering talent pool, local part- icy mandates. Industry organizations such as nerships in semiconductors, business friend- the Taipei Computer Association, the Taiwan liness, and know-how in managing mainland Smart City Solution Alliance (TSSA), and the China makes it a hotspot for international Smart City & IoT Industry Alliance, and Tai- partnerships. These partnerships are key in wan’s Telecom sector’s 4G Carriers promotion innovation strategies and capturing market reflects a composite of industry leaders work- shares in an underlying emerging digital econ- ing together to support the development of omy. Some of these partnerships include, UK’s IoT industry within the context of Smart City cutting edge microprocessor designer ARM, initiatives. Serving as an example, their ef- Apple Inc., and Cisco Systems Incorporated. forts to sponsor the Taipei “Smart City Sum- ARM established a world-class CPU Design mit & Expo” in 2016 is a testament to Taiwan’s Center in Hsinchu, Taiwan. The new design wherewithal to foster synergy among global center will focus on IoT and an embedded players in IT and kindle new development op- device market focus. The center will focus on portunities in Smart City technologies (“ITRI,” design verification, and delivery of the Cor- 2016). tex-M Processor series. This technology has At the tiller of its digital revolution sits Tai- enormous implications for Smart City applied wan’s Telecommunications sector- its 4G Car- technologies (Scroxton, 2015, p. 22). riers- Chunghwa Telecom, Taiwan Mobile, Apple recently opened a new laboratory in Far EasTone Telecom, Asia Pacific Telecom, the Longtan Science Park in Northern Tai- and T Star. Taiwan’s 4G Carriers are push- wan. The purpose is to develop new display ing the envelope in new digital services with technologies for their Iphones and Ipads for an urban-centric focus. Through the support thinner and more energy efficient applica- of the Ministry of Economic Affairs, Taiwan’s tions (Culpan, 2015). In parallel, Apple has 4G Carriers have agreed to a memorandum of also shifted its custom mobile chipset for A10 understanding with city governments to ex- chipsets sourcing from Samsung in favor of pand 4G digital services. As part of that sup- Taiwan’s semiconductor giant TSMC as a stra- port, MOEA is extending partial project bud- tegic move to enhance value-added to its sup- get support to 4G Carriers for pilot projects ply chain strategies (Balanci, 2015). island wide in digital services. As part of this In terms of strategic footing in Smart City framework, 4G Carriers will offer open service infrastructure, Cisco Systems is advancing its data to the APP community. This will give in- business relationships in Taiwan’s Smart City dependent developers an opportunity to build projects. This past year, local governments in on existing service data already in place there- Taichung and Keelung put in place MOUs with by catapulting applications in digital services Cisco Systems Inc. to create smart city solu- in new directions. tions in the two cities that focus on managing In one showcase, Taiwan Mobile is working traffic, environmental, business, and energy with Kaohsiung, Pintung County, Tainan City, control systems (“Taichung, Keelung partner New Taipei City, and Taipei City to create two Cisco”, 2015). application platforms- “Wisdom Video” and “Wisdom Micro Business.” Wisdom Video is 5. Taiwan’s National and Local an application platform built on civil society Industry Collaborations & offering services such as instant online polls. Initiatives “Wisdom Micro Business” is another application platform commerce driven that aims to Taiwan’s local industry initiatives to ad- empower local businesses to find opportuni- vance smart city technologies is a key ingre- ties within their local markets (Mr. S.J. Peng, dient for building effective collaborations to ITRI, Communication, 2016). support of local and federal government pol-

On a more local industrial city level, Taic- tal terms- China is facing a bleak situation. hung industrial city flagship initiatives- Indus- Green achievement and Smart City success, in try 4.0 Initiative Fourth Industrial Revolution contrast to Taiwan, has not been mutually in- is a city plan that aims to capture and harness clusive. China today is facing a very different trends relating to smart factories, smart pro- situation than Taiwan, however China does ductions utilizing cloud, IoT, big data man- offer a third leg for Taiwan’s future IT expan- agement, and optimization of smart devises sion. To bring China’s environmental concerns for value added product development and ser- into sharper focus, it is an understatement to vices. say China’s environmental conflicts are truly On a national level, one case study that is pressing, according to the World Health Or- noteworthy involves a project called Head- ganization air pollution kills 656,000 people Start launched by Taiwan’s National Devel- annually, and water pollution 95,600. And ac- opment Council (NDC). This project is part cording to China’s Ministry of Water Resourc- of a broader national agenda to create a local es estimates about 300 million people, two- silicon valley in Taiwan. The project, through thirds in rural areas rely on water containing public support, offers an environment condu- ‘harmful substances.’ (Babones, 2011). With cive for start-ups and entrepreneurship with this environmental gloom in mind, China’s relaxed regulations and funding assistance for rising urban jungles must overcome daunting local start-ups. This past year HeadStart was challenges to get “Smart” on the urban front. successful in attracting USD $430 million in Its rising shanti towns on city outskirts cou- investment for IT start-ups (Wu, 2015). pled with urban center population explosions Taiwan’s IT industries, through collabora- add to the complexity and features of its urban tions and focused initiatives, seem ever poised expansion. Smart city initiatives and success to continually gain traction in an emerging in China will prove to be a much longer and global digital economy underpinning the de- more difficult narrative given these current velopment of Smart City applied technologies settings. Urban projections estimate that by and IoTs. 2030 seventy percent of China will be urban (Peeples, 2015). And in terms of energy de- 6. The Taiwan-China cross-Strait mands, by 2050, China’s urban populations Urban Link are projected to account for 20 percent of to- From a purely technical point of view, Tai- tal energy consumption. In terms of water re- wan’s future IT business opportunities, in sources and scarcity, China has only 7 percent sync with mainland China’s ambitions in ur- of the world’s fresh water while sustaining 20 ban development, are projected to grow. To percent of the world population and in more understand this potential, one must consid- than half of the country’s largest lakes and res- er the environmental and urban challenges ervoirs are unsuitable for human consumption mainland China is facing today. China’s future (Ma & Adam, 2013). is concerned with reconciling the environ- In bundling these trends, it is reasonable mental damage its industrial development has to assume Taiwan’s current strengths in ur- brought while also grappling with growing urban smart community development and its ban populations. This dynamic is a window of achievements in establishing a green footprint opportunity for Taiwan’s IT companies to de- will place Taiwan in a strategic position in velop ‘Smart City’ applied technologies in sup- cross-Strait trade where it will be able to le- porting these type of trends. verage its accomplishments in smart city tech- In terms of technology trends, although in nologies. This will aid mainland China’s long absolute terms there are more people wired in term goals to manage their urban growth, ris- China than any other country, in environmen- ing energy demands, and to effectively navi-

24 © Business and Public Administration Studies, 2016, Vol. 9, No. 1 Green Island’s Smart Footprint gate the environmental damage it has come to type of investments with efficacy and resolve suffer in recent decades. Taiwan’s smart city by enacting government regulation which re- technologies will be a big part of China’s end stricts these investments to noncontrolling game in finding viable solutions. shares of Taiwan’s semiconductor firms thereby safeguarding its national economic inter- 7. Reverse flows of Investment ests. from mainland China Taiwan’s ability to attract and harness the There are some interesting trends occurring next technology revolution is not misguided in cross-Strait investment. There is a rising “Techno-Optimism”. But, rather, it reflects a trend of a reverse flow of investment coming citadel in smart policy incentives and a tech- from mainland China’s National IT industry. nology sector that has consistently proven to Tsinghua Unigroup, a mainland State be adaptive and resilient. Smart City develop- Owned Enterprise (SOE), has recently commitment and its automated associated technolo- ted USD $20 billion in overseas investments gies envisioned are part of a larger framework this past year (Dou, 2015). Some of this invest- aimed at supporting ongoing trends and opment strategy has taken a shine to Taiwan’s portunities in an evolving globally driven IT semiconductor industry. Recent investments marketplace. Taiwan’s Smart City accomplish- this past year by Unigroup have committed in- ments carve out a new context that embraces vestments to Taiwan’s semiconductor industry an emerging market of digital opportunity leaders Powertech Technology, Chipmos, and coupled with urban needs. As shown above, Siliconeware Precision (Ibid.) It is important the precursors in place are highly enabling for to point out these investments reflect a green cultivating Smart City projects and industry light from the mainland government authoriz- development, these trends will bolster both ing and prioritizing direct government invest- cross-border commercialization of informa- ment in Taiwan’s semiconductor industry as a tion and innovation in an emerging urban state priority. Taiwan, it could be argued, has digital economy. All of this can only mean Tai- become a national strategic financial invest- wan’s smart footprint is scheduled to deepen ment for the People’s Republic of China. as an emerging urban digital economy contin- And Taiwan’s government manages these ues to take hold. References Babones, Salvatore, “The Middle Kingdom, The Hype & The Reality of China’s Rise.” Foreign Affairs, 90;5, Sept/Oct 2011 Balanci, Mary. “Apple to Ditch Samsung For TSMC as Their Chipset Maker.” December 3, 2015. Retrieved from http://www.mobilenapps.com Culpan, Tim. “Apple Opens Secret Laboratory in Taiwan to Develop New Screens.” Bloomberg. December 14, 2015. Retrieved from http://www.bloomberg.com “Designing Roadmap for Smart Cities: Seeking Opportunities for Taiwan’s ICT Industry to Drive Structural Transformation through Smart Services.” Digitimes. May 12, 2014. Re- trieved from http://www.digitimes.com Dou, Eva. “China’s Tsinghua Unigroup Plans to Buy Stakes in Taiwan Chip-Packaging Compa- nies, China Chip maker plans to buy stakes in SPIL and ChipMos for more than $2 billion.” The Wall Street Journal. December 11, 2015. Retrieved from http://www.wsj.com “Freedom of the Press-Taiwan 2015” Freedom of the Press. 2015 Retrieved from http://www. freedomhouse.org “Global Open Data Index 2015-Taiwan” Open Knowledge Taiwan. December 10, 2015. Re- trieved from http://www.okfn.tw

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