The first case of initial coin offering (ICO) appeared in 2017, generating much interest and new financing opportunities. But many ICO teams have declared failures or vanished soon after completing fundraising operations due to lack of government supervision. To revive the sluggish market sentiment, industry players have called for regulatory supervision over the securities token offering (STO).In response to the call, Taiwan's Financial Supervisory Commission (FSC) has announced that it will formulate relevant regulations by the end of June, and it already hosted on April 12 a public hearing session for representatives from the industry, government, and academic sectors to express their opinions on draft regulatory rules.The move received a lot of media attention. Indeed, the FSC is worthy of praise for daring to map out a brand-new bill governing the emerging STO business operations. But since the full text of the draft bill was not available at the public hearing, some of the points may deserve more attention or need to be clearly explained. The following are three preliminary suggestions for the writing of a law in the direction of "developing a sound STO, conducting efficient supervision, and building international connection." It is hoped that Taiwan's STO market can take off and grab future international financing opportunities for STOs.Introducing an additional international STO version to govern issuances by foreign companies or overseas fundraising activitiesThe draft bill available at the public hearing confines STO issuers to companies in Taiwan, excluding offshore firms. As STO technology boasts the trait of facilitating cross-nation fundraising operation, it is advisable that besides the current domestic version of the STO draft bill, an international version should be devised to govern STO issuance by foreign companies or to simply regulate overseas fundraising. The international version must also include relevant procedures such as those for registration to facilitate overall management and help access and develop international markets, so as to effectively boost international visibility of Taiwan's STO developmentMeanwhile, the draft bill stipulates that any dedicated STO investor is required to have a minimum wealth of NT$30 million, but sets maximum STO subscription amount at only NT$100,000. Most attendees at the public hearing regarded the wealth bar as too high and the subscription ceiling too low. The draft stipulations observe the international practices that STOs are less open to retail investors; and to safeguard the interests of investors, the FSC adopts the high criteria for dedicated investors by taking reference from the regulations governing offshore structured products. But the draft bill should also consider flexible credit lines as set for margin trading and short selling of marketable securities. In accordance with different risk tolerance capabilities of different investors, the minimum wealth requirement criteria and the maximum subscription amount can be flexibly adjusted along with risk degrees, so as to fulfill the purpose of protecting investors on the one hand and to develop the securities token-based capital market and attract international funds on the other hand.Clarifying the relationship between STO platform operators and issuersThe draft bill requires STO issuers to channel their issuances through STO platform operators (securities dealers). But what about the relationship between platform operators and issuers - total underwriting or commissioned underwriting? The answer cannot be found from the public information. The draft bill asks, on the one hand, STO platform operators to screen the regulatory compliance by issuers in launching securities tokens on the platforms. And it also allows, on the other hand, the operators to engage in STO trading after completing the screening process by offering quotes based on market conditions to profit from the spread between token buying and selling prices. Do the dual roles played by platform operators contradict each other? Furthermore, the existing draft regulations also blur the boundary between the primary and the secondary STO markets. Accordingly, the regulator should incorporate the role of an intermediary into the draft bill and the relationship between STO platform operators and issuers be further clarified and clearly stated.Innovativeness of financial regulatory sandboxIn case of the STO fundraising amount exceeding NT$30 million, the draft bill stipulates that the issuer must enter the financial regulatory sandbox experimentation, for which a so-called "innovativeness" is required. Accordingly, if there is only one issuer applying for entering the sandbox experimentation, other issuers cannot develop the same or similar business until the issuer completes its experimentation. In order to accelerate multiple developments of the STO industry, the FSC should broaden the definition of "innovativeness" of individual STO projects, so as to allow more opportunities for issuers to meet financial regulatory sandbox requirements.(Kelvin Chung is senior attorney and sub-leader of Cryptoassets and Token Economy Taskforce of KPMG in Taiwan)

Ministry of Science and Technology has announced that its Global Research & Industry Alliance (GLORIA) initiative aims to promote industry-academia cooperation with estimated R&D investment of NT$130 million (US$4.1 million).Under the promotion, National Taipei University of Technology will cooperate with Casetek Holdings and Walsin Technology; National Taiwan University of Science and Technology with Aaeon Technology; Taipei Medical University with Wel-Bloom Bio-Tech; and Feng Chia University with Gain-How Printing, MOST said.GLORIA has also successfully prompted Qualcomm to cooperate with National Taiwan University, National Cheng Kung University, National Tsing Hua University and National Chiao Tung University in R&D and talent training, MOST noted.With a 4-year budget of NT$2.4 billion, MOST began to implement the GLORIA initiative to boost R&D cooperation between local universities and local or international enterprises in 2016.As of the end of April 2019, there were 18 alliances with 339 members established under GLORIA. GLORIA had attracted total investment of over NT$1.0 billion in cooperative R&D by participating enterprises and trained more than 3,300 experts, said MOST.GLORIA has incubated 48 startup businesses which are in international cooperation with enterprises or academic organizations in the US, Vietnam and Malaysia, MOST said.MOST is showcasing GLORIA achievements at Computex Taipei 2019.

The coming of the 5G era promises drastic changes to people's lives, but all these changes will not come without equipment, device and component suppliers making advances in their technologies and offerings, according to speakers at a Digitimes-arranged forum during Computex 2019.Commercialization of 5G is just around the corner, but compared to 4G, which has been focusing on mobile communications, the scope of 5G applications will be much broader. The 2019 Computex Taipei 5G Mobile Technology Trend Forum, with the theme of "Recreating Industry Values," brought together heavyweight industry experts to shed light on the development of 5G.In his opening speech, ST Liew, vice president of Qualcomm Technologies and president of Qualcomm Taiwan &SEA, noted that smart connection has become an inevitable trend in the future world and that through 5G's traits of high networking speed, broad bandwidth and low latency, digital technology applications will proliferate constantly. He said the world will march toward an era of inventions, with new applications and business models emerging continuously to bring major changes to industries and people's lives. And all these will be based on 5G technologies and solutions offered by various types of businesses.The extended applications of 5G will be extremely broad through the integration with AIoT, and diverse software and hardware technologies required in the 5G application architectures will be sharply different from the past, according to Morris Chen, product marketing manager at STMicroelectronics. He said that for 5G application to both consumer and industrial domains, sensors are needed at the bottom layer of the architecture to detect surrounding environments and equipment conditions and transmit relevant data collected to upper layers. Accordingly, demand for sensors will rise sharply in the future, and their sturdiness and communication capability must be simultaneously upgraded.Besides sensors, memory is also among devices that must undergo constant advancements. Mirian Kuao, senior marketing manager at Macronix, pointed out that 5G base stations are an important area for memory application. As base stations have long life cycles, their components must be highly stable and reliable. Memory suppliers for 5G base stations must guarantee long-term supplies, and their products must operate in wide ranges of temperatures and provide high storage densities.Audio chips are also key components for 5G equipment. As consumers are increasingly concerned about quality and performance of audio/visual products and recreation is also a crucial application of 5G, Dialog Semiconductor has rolled out audio chips that can sharply reduce noises when applied to UC and CE headphones and microphones. For microphone makers, the company particularly offers chip modules to help shorten time-to-market for their products.In terms of communications, frequency bands for 5G applications will be far broader than those for 4G, and system makers need brand-new development kits to support their product designs. In this regard, SW Chang, president of TMYTEK, noted that there are now fewer users of 30GHz mmWave for 5G application, as it involves greater difficulty in technology although it can provide cleaner and faster transmission. Chang disclosed that his firm's 5G beamforming antenna system development kits can help makers more easily develop antennas and test modules and baseband systems.After mmWave devices are successfully developed, test is a crucial job in volume production of the devices, according to John Lukez, vice president of LitePoint. He noted that 5G mmWave is a brand-new technology, requiring simple, reliable and accurate solutions to test 5G mmWave products on production lines. The firm's mmWave testing instrument, featuring tight space design and horn antenna, is available with a laser alignment system that can measure path loss and conduct angularity correction to boost yield rates for mmWave products and secure consistent product quality.At the forum, Daniel CC Lee, director of industrial service group product certification at TUV NORD Taiwan, explained 5G regulations and standards enforced in the US and Europe. Lee said that besides regular security certifications for electronics products, extra information security and function safety are also required for 5G devices to ensure that the entire system can maintain safe operation in case of device malfunction. He advised Taiwan firms to join the 5G mmWave Channel Model Alliance under the National Institute of Standards and Technology to access more 5G-related information available worldwide for use in their product designs.Over the past few years, AIoT applications have gradually emerged, with image identification now still commanding the largest portion of the applications, said Christine Liao, sales director at ThroughTek. Liao stressed that along with the maturing of 5G, its high networking speed and broad bandwidth traits will further drive upgrades in image transmission and identification technologies. Long engaged in the development of image processing technologies, ThroughTek has been well prepared for the arrival of the 5G era, she added.Roger Huang, director of Digitimes Research, said that the US and Korea will start commercialization of 5G services in 2019, while Japan and China will follow suit soon, inspiring major tech firms to step up development of diverse vertical application equipment in addition to smartphones. He concluded that the ever-proliferating 5G applications will usher in ever-expanding business opportunities, and Taiwan firms must speed up their deployments in related aspects to create more value-added services.The Digitimes-arranged 5G forum brings together industry experts.Photo: Digitimes staff

After the iWatch became all the rage, wearable devices have suddenly become the most popular IT product. Companies in the market rushed to introduce various devices, such as smart watches, smart wristbands, and even smart necklaces and earrings, all of which can detect biosignals through built-in sensors. However, most wearable devices share common drawbacks. In addition to inaccurate detection under vigorous exercises like jogging, some medical devices require users to change their lifestyle, which significantly reduced their use rate. SmartFace Inc, led by professor Bing-Fei Wu of National Chiao Tong University (NCTU), has developed a vision-based biosignal health management system to measure and detect biosignals through visuals without contact. The system's accuracy is higher than that required by medical standards and can be applied in medical and financial sectors.The application of wearable devices in the medical sector started early, then the IT industry launched related products, including all kinds of smart wristbands, glasses, and watches. These wearable devices use built-in sensors to detect biosignals, but they lose their accuracy if not aiming at certain parts of the body (i.e. pulse). As for medical grade products that require a high standard on precision, some need to be worn over long periods of time, such as heart rate detectors worn by cardiac disease patients at home or devices for detecting sleep apnea. These devices affect users' daily living. In light of this, Wu focused on precision and easy application as the two major principles when conducting research and development. His vision-based biosignal health management system can accurately detect biological information without users feeling anything.This system first obtains facial information through a camera and then shows the heart rate and blood pressure after the analysis by special algorithms developed by FaceHeart Inc. Accuracy can reach 2-3 bpm when users are inactive, not worse than the medical standards. It can still be use even during jogging on the treadmill. Also, users don't need to purchase a high-precision camera. Heart rate detection only requires cameras with a frame speed of 30 fps, whereas the detection of blood pressure will require cameras with higher specs, but Taiwan suppliers are capable of making both kinds of cameras.The vision-based biosignal health management system of FaceHeart Inc. has diverse applications. It is for users who need to detect biosignals without making contact with the device itself. The system is most commonly seen in elderly care. To take care of elders in the family, some people will purchase devices like smartwatches for them to wear, but the elderly are not familiar with electronic products, which are eventually cast aside without being used. The system from FaceHeart Inc. can have a camera set up in front of the television so the elderly can have their heart rate and blood pressure detected while watching TV.In addition to the medical sector, financial institutions are starting to use the vision-based biosignal health management system. In 2017, Professor Wu's team at NCTU won first prize in the smart financial system competition by the Shanghai Commercial and Savings Bank, Ltd. (SCSB). They then worked with SCSB to integrate it into the Know Your Customer (KYC) system, which companies use to identify customers. Scams are on the rise in recent years. In the past KYC tried to prevent dummy accounts by relying on questionnaires to conduct background checks on customers applying to open new accounts. But SCSB uses the vision-based biosignal identification system, allowing employees to immediately determine whether the applicants passes the KYC procedures, reducing the employees' workload.Both the hardware and software of this health management system are independently researched and developed by Wu's team at NCTU. Even the microprocessing chip comes from the cooperation with Taiwan's MediaTek Inc. It is an AI system that is completely self-made in Taiwan. Professor Wu pointed out that the system is extremely convenient to use, but they encountered many challenges during research and development. For example, they need to figure out how to ensure accurate measurement under circumstances without ample light, such as nighttime or in a dark room. Also, cameras on the market automatically adjust the aperture and shutter. This image also affects the analysis of AI. The R&D team spent 5 years overcoming all challenges and smoothly commercialize this new technology.As for the business model, Wu says that technology will have two directions: One is to authorize the core software to companies so the system can be built into cameras. The FaceHeart Inc. team can customize the software to suit customer products. The other direction is to partner with existing camera companies. For instance, cameras from security monitoring companies can combine FaceHeart's Al system to have more added functions. Wu expressed that incorporating AI into visuals has become a trend in the industry, but FaceHeart does not delve into mass facial recognition but a rather accurate biosignal identification to differentiate its market from competitors and aim for high-value business opportunities in a new territory.

Today people use their computers or smartphones to access digital maps, find a parking space or check out restaurant recommendations. This is part of people's everyday life now. However, many people may also have had the experience wherein the vacant parking space indicated on their phone was already taken when they got to it or the restaurant of interest to them had closed down six months before their visit. In other words, the city information people have access to is all outdated. In contrast, OmniEyes - Next-Generation Mobile Video Platform enables the creation of a city's real-time image data though the easiest and ready-to-use approach.Founded by the team led by Chun-Ting Chou, associate professor, Graduate Institute of Communication Engineering, National Taiwan University, as well as Shou-De Lin and Ai-Chun Pang, both professors of the Department of Computer Science and Information Engineering, National Taiwan University, OmniEyes set the goal to bring its research results to reality within three years from the time when it decided to join the Ministry of Science and Technology's Startup program in December 2017. Both the team's devotion and the fact that they have a highly feasible idea allowed their research to reach maturity in late 2018. Then backed by venture capital investments, the team established a startup firm to commercialize their research.OmniEyes - Next-Generation Mobile Video Platform makes city information more up-to-date and valuable resources more readily available through fog computing. According to Chou, AI has become the most critical trend for the Information Technology (IT) sector and images are the most widely available data today. With dash cameras installed on virtually every vehicle nowadays, the amount of video data is massive. If we are able to make good use of the video data, the possibilities of innovations are endless and we may even be able to reshape digital map data.Chou takes Google Maps for example. It is the most widely used digital map and its precision is rapidly improving through the collection of massive usage data. However, the city information available on Google Maps is updated every 1.5 to 2 years. In other words, what users see from Google Maps on their mobile phones is old information. OmniEyes, on the other hand, gathers images captured by cameras installed on buses, taxis and delivery trucks on the road such that image data on the back-end platform is refreshed once every five minutes. The information is kept up-to-date so that users can stay on top of city dynamics in real time, rather than fall out of sync with outdated and static information.It is not easy to achieve OmniEyes' goal. Lin points out dash cameras currently on the market mostly only have recording function. Even if they are added with communication modules to transmit the recorded images to the back-end platform in real time, the transmission of the video files can consume a lot of bandwidth due to their large sizes. Furthermore, 99% of the video footages captured by the vehicles on the road are not useful data. The biggest challenge is how to add lightweight AI capability to dash cameras with limited functionality so that they can filter out useless video data before transmitting them to the back-end platform to save bandwidth.Prof. Pang pointed out that fog computing and the increasingly popular edge computing work by having the terminal equipment handle a certain amount of the system computing, reducing the system latency and the workloads of the cloud platform and bandwidth. But in contrast to edge computing where the terminal equipment must possess computing power, fog computing extends the scope to include handsets and even dash cameras that offer very low computing capabilities. The coverage of fog computing is therefore much wider. For OmniEyes, dash cameras are its major terminal device. To address such a challenge for academic research purposes, a high-caliber dash camera may be the solution, notes Chou. However, OmniEyes set its heart on designing a practical and marketable product so it insisted on making use of dash cameras on the market and equipping them with AI capability by implementing feasible algorithms. Through a year of R&D efforts, OmniEyes has enabled dash cameras on 100 buses, 40 taxis and 10 delivery trucks to send image data collected on road trips of up to 10,000 kilometers daily to the back-end platform, making city information available in real time.Chou proposes a three-phase plan for OmniEyes going forward. For phase 1, OmniEyes endeavors to make its technology ready to use. For example, using cameras already installed on a variety of vehicles is a viable way for OmniEyes' technology to create values. For phase 2, OmniEyes looks to license its technology to manufacturers for them to integrate OmniEyes' software on their automotive devices. For phase 3, OmniEyes will make its image data platform available through a mobile phone app, which consumers can download to access city information in real time. Chou envisions OmniEyes - Next-Generation Mobile Video Platform as a search engine for the real world. Anyone can contribute information to the platform while enjoying access to it. The model of data sharing and co-creation enables more effective use of city resources.

What players the hub should have is critical to the issue in discussion. The first and foremost important thing is the right attitude. Language proficiency is an essential skill to startup teams. Just being able to communicate when making initial contact is sufficient but when it comes to business negotiations, it is important to maintain professionalism and employ professional services. They also need to be able to grow internationally. The second category of players will be investors from home and abroad including international venture capitalists (VC), multinational corporations and incubators. The third category of players will be government agencies that are willing to communicate and get their hands dirty. The fourth category of players will be traditional and non-traditional media publishing content in multiple languages and other startup ecosystem partners capable of making international connections.After we are clear about the players, we need to figure out how to bring them together to engage in interaction and communication on a scheduled or unscheduled basis so that the hub can take shape and carry on. The following discussion is directed at how Taiwan can become a startup hub, including a description of the issue and a summary of the approaches to improvement and implementation.An approach to infrastructure improvement: event + research + multi-language proficiency + multi-themeParticipation in events is the most effective way to make connections and engage in communication. However, an event's target audience, theme, nature and marketing campaign are critical to its success. Before holding an event, the organizer should establish who the target audience (TA) will be, how they can be reached and what the expected effect and influence will be. It must be based on a certain amount of data or research work. Afterwards, the organizer should keep track of the event data in the long run to help improve and perfect the planning of future events.RISE (affiliated with Web Summit originally held in Ireland), TechCrunch Disrupt SF, SLUSH, Tech in Asia and Startup Thailand are some of the show events maintaining a complete collection of participant data and exhibition statistics throughout their history. In Taiwan, leading event Meet Taipei, followed by Findit and Digitimes platforms, also gathers data on the Taiwan ecosystem through events. This is part of soft infrastructure buildup. Each event organizer has its own strength and advantage. Multi-language dissemination of information, such as updates on success stories of the Taiwan startup ecosystem, statistics and analyses on technology and investment trends as well as industry dynamics, will be Taiwan's first step to becoming Asia's startup hub and a continuing effort going forward.It is costly for visitors to come to Taiwan from abroad, so it is important that their itineraries are arranged effectively and efficiently. Enabling them to gain an understanding on Taiwan's culture and characteristics in their main activities or engaging them in other international or local events will add values to their business trip to Taiwan. To achieve such a purpose, a one-stop information platform plays an essential role. Furthermore, precise planning for TA interaction is imperative especially for events where multiple themes synergize.Take Computex and InnoVEX for example. Computex is attended mostly by vendors, manufacturers and traders who are in search of orders so the Computex venue is full of people who work in business development (BD), marketing, distribution and sales. InnoVEX, on the other hand, targets early investors, startup firms and high-tech professionals. The goal is for the two groups to actively interact. That is, medium and large corporations should have a chance to interact with small and innovative firms to create win-win situations for both. However, a close analysis on the events held so far will indicate that a major role is missing – PMs of large corporations. PMs are those who know best whether a startup will be able to collaborate well with their corporation. As such, the event organizer should mull how to draw PMs to InnoVEX.Let's first be clear on one thing: investor + startup ≠ investmentA good deal can attract investors. However, whether an investment can actually happen depends on the decision of different types of investors. Angel investors usually care more about the team members, their development potential, social contribution and minimum viable product (MVP). VC or incubators consider more aspects including people, funding, market and technology. From the people perspective, they look at the team, development potential and external partnerships/liaison skills. From the funding perspective, they examine finances, capital size, shareholding structure, exit mechanisms, valuation and previous round of investors. From the market perspective, they evaluate the business model, profitability, market positioning, competitors, product or service competitiveness, social contribution, product/market fit (PMF) and corporate/industry risks. As to technology, they assess the patent/technology strength. Moreover, VC or incubators also take into account the fundraising condition, limited partner (LP) preferences, project schedule planning, return of investment, business connections and resources, industry trends, technological edge, macro environment and government regulations.In the case of corporate venture capital (CVC) or strategic investment from large enterprises, they examine a startup based on the team, development potential and external partnerships/liaison skills from the people perspective. From the funding perspective, they consider finances and previous round of investors. From the market perspective, they evaluate business model, PMF, market positioning, competitors and corporate/industry risks. Lastly, for technology, they assess the patent/technology strength and relevancy to CVC/large enterprise's own development direction. They also examine their own purpose, expected return, payback period, industry trend, technological edge and macro environment.From the above brief summary, except in the case of angel investing, an investment deal is generally considered from multiple perspectives and things can get so complicated that there is no one simple golden rule. Each case of a startup successfully securing funding is unique. To plan startup investments systematically, government agencies must take the lead or a large venture capital firm like Sequoia Capital takes the initiative to strategically fund an entire industry chain with promising potential.What the government can do is to expedite the buildup of an ideal investment environment. For example, it can aggregate regulations and information resources and make them available while putting efforts into the construction of software and hardware infrastructure so that high-quality startups can raise their visibility and accelerate growth and then good investment deals can come into place. Furthermore, the government can also work with media firms to publicize Taiwan and attract international attention. With the business environment continuing to improve, startups can focus on what they do best.Frontline government officials should join the battleFrontline government officials in discussion herein does not refer to high-ranking officials (bureau directors and above) getting involved in event participation, forum speeches and communication with startups and investors at home and abroad. Instead, government agents one or two levels lower in the ranking including official representatives or PM, section chiefs and team leaders should be committed to getting their hands dirty. Foreign startups and investors need an efficient way to stay aware of available resources and information. It would be best if government agencies in charge can appoint official representatives to make direct contact with them. Moreover, getting government agencies involved in the communication will enable them to gain in-depth understanding on what attracts foreign people to Taiwan or what hinders their development in Taiwan.Taiwan's government agencies currently engaged in guiding startup development include the National Development Council, Ministry of Science and Technology, MOEA Small and Medium Enterprise Administration and Financial Supervisory Commission. In addition, Taiwan Start-Up Hub is a startup cluster supported by the Executive Yuan that provides startup courses and hosts a startup community, aimed to deliver and exchange startup information.Moreover, there are Taiwan Startup Stadium (TSS) and Taiwan Innovation and Entrepreneurship Center (TIEC), which specialize in connecting people and businesses internationally. Governments around the world are endeavoring to foster their startup scene by instituting laws and regulations to help build a solid foundation. It is particularly important that startup policies are effectively conveyed to startup teams. By providing startup teams a one-stop service integrating all startup resources will help them save the time and effort of having to search for information on startup subsidy or assistance programs and thereby maximize the benefits of the resources.The media will be the best startup ecosystem partner helping them connect to the worldProfessional media firms are experts at precisely grasping information and TA while they may not be good at being "broad" and achieving "cohesion." Non-traditional media, such as social networking sites and YouTube, are characterized by targeting a specific area and having strong cohesion. As such, different media may have different views on the same subject. Professionalism and cohesion can be manipulated through marketing efforts. Taiwan, looking to become a startup hub, lacks such marketing ability.In other words, international marketing and connection should be the common goal for the entire startup ecosystem. Startup teams, early investors (e.g. angel investors and VC), government incubators, private incubators, startup contest organizers, startup communities, large enterprises, media and other supporting entities (e.g. financial advisors, lawyers and accountants) should all work together toward the goal so as to foster an open startup ecosystem, which will in turn kick start a positive cycle pushing Taiwan toward becoming Asia's startup hub.To sum up: Satisfying needsFor Taiwan to become Asia's startup hub, the first question to ask is why startups should gather in Taiwan. What does Taiwan have to offer to draw international investors, large enterprises, startups and media? Then the question is how. Simply put, the answer is to "satisfy needs." Investors need investment targets. Startups need partners and investors. Large enterprises look for future partnerships and new technological applications. International media need hot topics.Take the five roles for example. They have needs from one another and also provide for one another. To do matchmaking among them, more thoughtful planning and execution as well as precise coordination and arrangement is required. Through data collection and analysis, the preferences and needs of each group can be better understood. Through active and passive information dissemination, Taiwan can develop a positive image among the international community as startup hub. With partnership and investment deals being made one after another, the hub can continue to flourish.(Meng-Hsin Yang and Chia-Ning Chou are assistant researchers at Taiwan Institute of Economic Research)

Drastic changes in the global industry environment, regional politics, trade tension and rapidly evolving technology innovations are making it more and more challenging to do business in recent years. Disruptive iABCD technologies (IoT, artificial intelligence, blockchain, cloud computing, big data analytics) are coming on strong, ready to reshape the business world. Although these new technologies may bring unlimited opportunities, they also cause increasing concerns in security, privacy, regulations and social trust in the industries that make use of them. Businesses today not only have to cope with the competition in products and services but more importantly, they need to build up their abilities to protect sensitive customer data so as to maintain customer trust as they expand into new territories. With these new developments come more challenges and opportunities as well.According to PwC's Global Digital Operations 2018 Survey, PwC interviewed 1,155 manufacturing executives in 26 countries to develop an index that ranks companies by digital operations maturity, from Digital Novices, Digital Followers, Digital Innovators to Digital Champions. Some of the key findings include:Only 10% of the companies can claim the distinction of being called Digital Champion. Two thirds of the companies have not started digital transformation or only have undergone moderate digital transformation.Asia-Pacific is leading the way to digitization. Asian companies have introduced digital products and services at a much faster rate than their counterparts in the other areas. This is the result of the enthusiasm of the region's young, tech-savvy corporate managers to embrace digital technologies, as well as soaring production costs that are forcing Asian companies to digitize key operation processes to maintain competitiveness. Digital Champions create value through integrated Customer Solutions ecosystems. Digital Champions serve customers by integrating Operations, Technology, and People ecosystems to serve customers with competitive, end-to-end solutions.From these findings, we can see that integration, new technology and ecosystem are undoubtedly the most critical key words to industry competitiveness going forward.With these key words in mind, what is the next step for Taiwan's digital transformation? The Taiwan manufacturing sector has been coping with many challenges, including trade barriers, rising costs, labor shortage, global competition, supply chain transformation, environmental protection pressure, labor law changes and tax law changes. Almost all business executives find it difficult to maintain operation. Only by continuingly upgrading themselves, refining their management skills and strengthening their competitiveness can they make breakthroughs and thrive in a highly competitive environment.According to PwC's 22nd CEO Survey: Technology trends report 2019, 50% of tech company leaders were "extremely concerned" about finding the talent and skills they needed. Creative talent is hard to find and that has become tech leaders' top concern. With the whole world aggressively engaging in digital transformation and industry upgrade, what opportunities are there for Taiwan firms and startups?To answer the question, let's first look at market changes. Before a startup sets up shop, the question to ask is whether they will sell products or services to businesses (B-side) or consumers (C-side). According to PwC China's New Trends of Technology Enabling To-B Services Whitepaper, the market in the Internet era has little room for startups (T) with innovative technologies to grow from C-side. In other words, most of the topics or business models have been explored by other startups. Furthermore, with medium and large corporations taking hold of marketing and channel resources of the consumer market, it will be very risky for startup firms to insist on creating a blue ocean market through a 2C model.We can foresee the trend that future startups will likely be operating on the mainstream T2B2C model but they will need to search for upstream opportunities. Tech startups should think about how to apply their strength to provide B-side customers better solutions. In the high-tech era, with IoT and smartphones being widespread, the T2B2C model has become popular and has developed in depth across upstream and downstream industries, which has reshaped user experiences of services and products and further created ecosystems combining various platform systems, igniting possibilities in many aspects for the business environment.What does the T2B2C trend mean to Taiwan startups and firms? Taiwan has fostered a complete supply chain and premium workforce with its focus on ICT industry development over the years. This is certainly Taiwan's biggest advantage. Many international corporations have chosen to set up their R&D or procurement centers in Taiwan, mostly eyeing Taiwan's strong supply chain and engineering talent. This is proof that Taiwan with such unique advantages still appeals to global conglomerates.Taiwan can build on top of its current advantages. As part of the local industries' urgent efforts to upgrade and transform, medium and large corporations can invest in or acquire startup firms as a way of external innovation management. This approach will allow them to save the costs of having to employ in-house R&D engineers or work with startup firms to jointly develop product technologies and commercial applications to grab preemptive market opportunities. To Taiwan startup firms, they need to leverage their existing strength and technologies to develop 2B solutions based on iABCD technologies. They can first develop products in Taiwan, including all steps of the processes from idea, design, product research, testing and small-scale pilot run. Then, the products can be launched into other regional markets or the global market. Furthermore, with medium and large corporations encountering an innovation bottleneck for 2B or 2C model, startup firms boasting their creative power stand a good chance of discovering additional opportunities.Amid the time when all industries are actively pursuing digital innovations, the T2B2C model is exactly what Taiwan startups need to transcend national boundaries and compete on the world stage. What their development strategies are and how they can collaborate with large enterprises are the challenges to startups' strategic planning ability and vision.(Shih-Jun Huang is managing CPA for startup services, PwC Taiwan)

The Global Entrepreneurship Monitor (GEM), co-issued annually by the US-based Babson College and London Business School since1999, has been the world's largest entrepreneurship research project, with its research results serving as important references for nations to formulate entrepreneurial policies. According to the 2018/19 GEM report, 9.5 out of every 100 adults in Taiwan are engaged in early-stage entrepreneurial activities, and the ratio has risen for two consecutive years, indicating Taiwan's growing awareness of startups.Compared to the 2017/18 report, Taiwan has made progress in the Entrepreneurial Framework Conditions of Government Policies, Entrepreneurial Finance, and Commercial and Legal Infrastructure, indicating the government is actively improving the entrepreneurial environment, such as helping startups obtain early-stage operating funds through the Business Angel Investment Program enforced by the National Development Fund. This article will discuss the government's tax incentives for startups and its efforts to attract international startup talent.Based on KPMG's experiences in advising startups, the issues most concerned for their early-stage operations are mostly associated with taxation. For instance, when a startup is smoothly proceeding with fundraising, the tax efficiency for investment paths taken by its domestic and overseas investors have to be assessed. In addition, if a new venture wants to obtain technologies it needs by allowing the technologies to be converted into shares, then the technology-based shareholders will also face the tax payment issue. Even if a new business seeks to retain quality employees by allowing them to become shareholders, they still have to deal with taxation.But there are substantial tax incentives or preferences stated in the Statute for Industrial Innovation and the Act for Development of Small and Medium Enterprises (SMEs). Moreover, in order to continue promoting the establishment of innovative startups, the government is amending and expanding the Act for Development of SMEs into the Act for Development of SMEs and Startups, highlighting the government's efforts for advancing innovations and startups. The "taxation environment" chapter in the expanded bill may cover tax incentives for knowledge innovation and digital transformation, including tax credits for investments in the segments of smart machinery, IoT, AI and system integration. Also, in view that being acquired is one of the exit strategies for startups, the government is also revising the Business Mergers and Acquisitions Act to allow individual shareholders of a startup to defer tax payment for the shares they purchase at premium prices from the surviving company after the startup is acquired, so as to spur M&A of startups.Furthermore, the government has spared no efforts recruiting international startup talent. The newly enforced revisions to the Act for the Recruitment and Employment of Foreign Professionals mark the largest opening-up for international talent, sharply relaxing regulations governing their work permits, resident visas and residence applications and offering them pension protection and tax preferences. The biggest highlight of the revised bill is that a foreign professional in a special sector may apply for a four-in-one Employment Gold Card that combines work permit, resident visa, alien resident certificate and re-entry permit. The card will be valid for one to three years, and can be renewed upon expiration, which is quite convenient for some foreign professionals. Moreover, in case a foreign "special" professional has for the first time been approved to reside and work in Taiwan, then within three years starting from the tax year in which the professional meets the conditions of residing in Taiwan for a full 183 days of the year and scores annual salary income of over NT$3 million, the part of the professional's salary income above NT$3 million in each tax year shall be halved in amount in the calculation of total income for the assessment of individual income tax liability in that year, with his or her income earned abroad not having to be incorporated into basic income tax statement. This is a highly attractive tax preference scheme for high-tier foreign professionals.Despite a growing practice in Taiwan, creating startups is not an easy job. Besides difficulties in raising funds, entrepreneurs have to face complicated taxation and legal issues. The government's high regard for startups can be evidenced by its growing relaxation of relevant regulations. Besides devoting more efforts to R&D or business development, entrepreneurs can well capitalize on diverse resources provided by the government to accelerate their startups' advances on the road to success.(Daisy Kuo, Hazel Chen and Vivian Ho are accountants from KPMG Startups and Innovation Taskforce)

Enterprise- and SOHO-use networking device maker Edimax Technology has globally deployed more than 4,000 AirBoxes, an air quality detector and monitor, according to the company.The deployment consists of more than 3,000 AirBoxes in Taiwan, mostly in its six biggest cities; more than 1,000 units in South Korea; about 100 units in Malaysia; fewer than 100 units in Bangkok, Thailand, Edimax said.The second-generation AirBox comes with an LED display for push notification of air quality data, mainly densities of PM2.5, carbon monoxide, TVOC (total volatile organic compounds) and HCHO (chemical formula for formaldehyde), Edimax noted.For the air quality detecting and monitoring business, China, Southeast Asia, South Asia and Africa are target markets, Edimax indicated.Edimax has been working with some large hospitals and universities in Taiwan to provide air quality data for their development of precision medicine and remote medical care solutions.Edimax AirBox models Photo: Mark Tsai, Digitimes, May 2019

Tech startup ecosystem, word for word, is an ecosystem which has an organic and interactive relationship among different parties with two key components: technology and startup. More specifically, startups are in the center of the ecosystem, surrounded by other entities/organizations (investors, universities, corporate/industry, government, media, etc.) and individuals (talents/startup-to-be).Technology, on the other hand, is how everyone in the ecosystem gets connected. The ecosystem gets its organic evolution with the advance and commercialization of technology research. Big companies embrace open innovation strategies so as to be fast and nimble. It's about accessing diverse range of talent, specifically, people who are willing to take risks. It's also about creating a virtual team outside of existing organizations, and injecting wider and diverse innovative energy into the internal team to accelerate time-to-market.Taiwan's tech startup ecosystem has its unique advantage that no firms in the world should miss when making their innovation strategies. To begin with, there is abundant high-quality technology talent in universities and industries, such as the semiconductor, electronic manufacturing and healthcare sectors. Those industries and talent are perfectly in line with key technology trends such as those of AI and 5G; and it's no surprise when big firms such as Microsoft or Google set up R&D team here. Aside from that, the tech ecosystem of Taiwan has been well-known as trusted partners to the multinational companies, such as TSMC (semiconductor foundry house) and Largan (camera lens provider). And it's a good time now for global firms to invest in Taiwan tech startup ecosystem.First of all, there is an increasing number of startups established by entrepreneurs with industry experiences. After seeing high growth in the previous two decades, thanks to the PC/Internet/mobile phone boom, the industry is again getting mature, driving experienced people to start actively seeking opportunity outside of the corporate environment. They are also being motivated by promising technologies of AI, blockchain and others. One example is Kneron, which has been recently selected as one of the 10 Coolest Startups of Taiwan in 2019. It was founded by a group experienced people from the semiconductor industry and academic bodies.Secondly, Taiwan has one of the best healthcare system in the world; and more and more people in the medical/healthcare sector are working closely with those from the ICT/software segment to jointly establish new ventures. An Example is Aetherai, winner of the 2018 Nvidia Inception Award in Taiwan. It is a startup combining talent from the medical and AI sectors to develop AI solutions on an end-to-end AI platform.Finally, the Taiwan government has invested heavily in building a more globally connected, robust tech startup ecosystem in the past five years offering grants and subsidies. For example, Taiwan Tech Arena, the flagship tech startup ecosystem development program organized by Ministry of Science and Technology of Taiwan, not only invests in encouraging startups to go international (like attending CES), but also builds a platform for private firms, startups, investors and people with industry experiences to work closely together and accelerate the growth of new ventures. Firms can easily leverage the platform to build its connection with the tech startup ecosystem in Taiwan. A growing number of multinational companies have started collaborating with Taiwan's tech startup ecosystem. The following are examples of big companies' approaches:Corporate innovation award: This is the second year of Audi Innovation Award (AIA) in Taiwan. AIA has the objective of raising awareness of Audi R&D and the company's needs of support from Taiwan tech startup ecosystem. It seeks innovative ideas and technologies from startups, universities and industries about AI, new business models, sustainability and so forth.Startup Competition: Qualcomm just started the Qualcomm Innovation in Taiwan Challenge (QITC), seeking inspirations from startups in 5G, AIoT, MR/AR related areas in line with the company's business goals. Qualcomm will support the startups with technology resources while working with Taiwan Tech Arena (TTA) to provide supportive business acceleration program for the shortlisted startups.Supportive programs: LINE has launched ProtoStar program calling for new ideas and startups to build new applications based on LINE platform. Startups selected could get free credit and additional technology resources to build their products. This approach is typically adopted by platform providers such as LINE, AWS, Microsoft and vertical financial services. Taiwan-based CTBC has a blockchain lab with the objective to build collaboration with global startups. Service provider PwC also has introduced its accelerator program to leverage its business network to support growth of startups.Venture building: This is a startup strategy with a long history, with one of the most famous example being Idealab, founded in 1996 in the US and have created, grown and spun-off a diverse range of companies. Companies who identify trends and opportunities but lack in-house motivated or skillful employees could come to a specialized organization such as idealab or accelerator to jointly develop the idea and recruit experienced entrepreneurs and teams to build up a startup. Techstars, a well-known accelerator based in the US and has collaborated with TTA in a series of startup ecosystem building events, just announced its new program. The typical value proposition from those specialized accelerators is how well-connected they are in the tech ecosystem and those experienced and highly motivated entrepreneurs could quickly execute and lead the newly formed startup to success.(Rich Fuh is partnership director of Taiwan Tech Arena.)Taiwan Tech Arena