In 2017, 380,600 industrial robots were sold globally, increasing 29.3% on year, according to World Industrial Robot 2018 published by International Federation of Robotics (IFR).Of the total, 125,400 were purchased by users in the automaking industry, growing 21% on year. Shipments to the manufacturing industries of metals, electronics/electric appliances and food rose 54%, 27% and 19% respectively. Although growth in global car sales is slowing down, automakers keep hiking automation of production, especially China-based ones and makers of electric vehicles.Among regional markets, 255,000 industrial robots were sold in Asia and Australia, up 34% on year; 67,000 units in Europe, up 20%; and 50,000 units in North and Latin Americas, up 22%.China, South Korea and Japan were the three largest country markets with sales of 138,000, 40,000 and 39,000 units respectively. The US ranked fourth with 33,000 units, followed by Germany (22,000) and Taiwan (11,000).Manufacturing industries around the world recorded an average use density of 74 industrial robots per 10,000 workers, with South Korea posting the highest density of 631 units per 10,000 workers. Taiwan's use density stood at 177 industrial robots per 10,000 workers, ranking 10th globally. While China ranked 23rd, its government aims to advance the country to the top-10 in terms of industrial automation with use density to rise to over 150 industrial robots per 10,000 workers in 2020.

Developing AI (artificial intelligence) solutions for industries face many challenges mainly because of lack of AI talent and availability of necessary data, according to experts.And AI solutions are practically case-specific rather than for common use within a specific industry, the experts added.Some market research organizations predict that AI will be mainly applied to four areas: financial services, medical/health care, retail operation and manufacturing. But manufacturing has the biggest potential for AI applications in Taiwan because of the country's industrial structure, followed by financial services and medical/health care, said Yu Shaw-shian, senior VP for government-sponsored Industrial Technology Research Institute (ITRI). Big data is the core to drive AI, and Taiwan's manufacturing industry consists of comprehensive supply chains that offer sufficient data for development of AI solutions.Taiwna-based manufacturers fall into three categories in terms of readiness in collecting and accumulating operating data from production equipment, Yu said. The first is high-tech firms such as semiconductor and flat panel makers and/or large-size enterprises which have collected such data, Yu noted.The second is makers which have collect insufficient data, but much of the data can be specially processed for use in developing AI solutions, Yu indicated.The third refers to makers whose machines are of old models that cannot be web-connected to collect data, Yu said. Most of them are small- to medium-size firms and the third category accounts for over 95% of the total number of manufacturers in Taiwan, Yu noted.External assistance, such as the use of smart machine boxes, is needed to enable such old machines to collect operating data, resulting in much time taken and less efficiency in developing AI solutions, Yu explained, adding thethird group pose the main difficulty in boosting industrial AI applications in Taiwan, Yu pointed out.The time taken to accumulate enough data varies: for example, at least one year is needed for retail operation to reflect seasonal effects, and a few months to half a year for PCB makers, Yu said.However, makers of different product lines may differ much in time taken to accumulate sufficient data and this is why it is difficult to develop AI solutions for common use in an industry.While training in developing AI solutions is commonly based on deep learning, the purposes of using AI solutions vary from enterprise to enterprise, involving much higher multiplicity and customization than adoption of ERP (enterprise resource planning) or CRM (customer relationship management) systems, said CEO Chen Sheng-wei for Taiwan AI Academy.

Manufacturing of electronic components including ICs and PCBs will account for 36% of collaborative robots to be deployed in Taiwan in the future, followed by metal working with 32%, retail logistics with 15%, food processing with 11% and shoe making with 6%, according to Industry, Science and Technology International Strategy Center under government-sponsored Industrial Technology Research Institute (ITRI).While demand for all types of industrial robot in China, Germany, Japan, South Korea and the US kept increasing at a CAGR of about 13% during 2011-2017, global demand for collaborative robots alone hiked 89% on year in 2016, 75% in 2017 and is forecast to hike 65% in 2018, the center said. Human-machine collaboration functionally fills the gap between 100% manually operated production and completely automated production and is becoming the mainstream mode in the global industrial automation market, the center explained.For manufacturing of electronic components, collaborative robots will paired with AGVs (automated guided vehicles) for feeding, cutting and moving of materials mostly, the center noted. For metal working processes, collaborative robots will be used in feeding, cutting, moving and carrying of materials as well as grinding, paint spraying, gluing and polishing, the center indicated.

Artificial intelligence (AI) can be applied to the travel service industry to better gauge the real needs of consumers through deep machine learning, according to CH Kuo, chief strategy officer of Lotus Group, a travel service and technology group based in Canada.Kuo, who is leading the Taiwan branch of Lotus toward a smart operation, said that Taiwan travel service firms must strive to work out travel itineraries that can increase consumer experiences through the support of AI.Kuo said that if consumers have a language barrier in travel, AI can help incorporate online translation service into their travel itineraries to let users of the service more easily know travel situations in advance and remind them of what to do before arriving at destinations. This is part of the service products developed by Lotus based on "thick data," Kuo added.Unlike big data, thick data highlights the depth of data, utilizing qualitative research to analyze a few data samples to dig out insightful points which are likely to be neglected by big data, Kuo said, adding that the deep machine learning technology develop by his company is based on thick data, able to conduct detailed analysis of traditional travel packages and relevant situations consumers may encounter.He stressed that AI should be based on the accumulation of intelligence rather than focused only on the development of technology, and therefore his company insists on "design for customer's need" by utilizing IT technologies to help upgrade traditional travel services.

Taiwan government-sponsored Industrial Technology Research Institute (ITRI) has kicked off operation of AIdea, a platform for developing AI (artifical intelligence) solutions to enterprises' problems, according to Yu Shiaw-shian, ITRI senior vice president and general director for Computational Intelligence Technology Center.AIdea first allows enterprises to present operational problems and related data. Sensitive information such as product names will be deleted from the data to protect business secrets. The data will be made available on the platform for open use by academic and research organizations to build models or develop algorithms that form AI solutions to the specific problems.AIdea plays the role of collecting industries' operational problems and related data and matching them with academic and research organizations' capability of developing AI solutions, Yu said. Enterprises are required to present a certain level of accumulated data on their operation because AI is based on big data analysis, Yu noted, adding the richer the data, the more likely AI can be applied.AIdea's main target users are small- to medium-size enterprises, Yu noted.As Taiwan has well developed medical care systems and a comprehensive national health insurance database, it offers good opportunities for developing AI technologies for medical care, such as precision medicine, Yu indicated.Several local enterprises or organizations have participated in AIdea, including Taipei Medical University, Taiwan Taxi, China Petrochemical Development and Asustek Computer.

A Taipei park has kicked the official use of Taiwan's first smart public lavatory allowing citizens to experience IoT-backed smart living, and the lavatory will double as an emergency call center in the next stage to enhance night safety for citizens, according to Spencer Liang, chairman of Flowring Technology playing a role in the project.Liang said the smart lavatory mainly relies on the support of IoT and cloud management technologies, with sensors utilized to detect the usage volumes of tissues and hand cleansers as well odors such as heavy ammonia before reminding service staff to do the replenishing and cleaning jobs. Liang said the sensing technology is just a basic application of IoT, but the smart lavatory project has attracted great attention from various sectors, with the Environmental Protection Administration even asking his company to help promote similar projects to other places in Taiwan.The pilot smart lavatory in the Daan Forest Park will be connected to the police systems later to become also a night emergency call center to better safeguard park visitors at night, according to Liang.The pilot project will also gradually incorporate AI, big data analysis, as well as facial recognition, user flow recognition and dangerous behavior recognition applications in the future, Liang stressed, adding that the most valuable part of the project is the backend use of the accumulated data for more efficient management.

Taoyuan City has been selected by Intelligent Community Forum as one of the global top-7 smart cities for two consecutive times. Cheng Wen-tsan, mayor of the northern Taiwanese city, pointed out during a recent interview by Digitimes that the core mission for a smart city is to solve problems by virtue of innovative technologies to hike efficiency and quality.Taoyuan began to promote its smart city project in 2015 and particularly focused on smart solutions and services for daily life, transportation and tourism in line with the Asia Silicon Valley Development Plan implemented by the National Development Council, Cheng said. Smart city solutions and services are human-centric, using IoT (Internet of Things), big data and AI (artificial intelligence) technologies to collect, analyze and integrate data, Cheng noted.Master plans and innovative thinkingWhile there are many systems and software solutions for promoting smart cities in Taiwan, smart city projects' effects on a city's competitiveness and the improvements to citizens' daily lives cannot be easily assessed because there are no readily available benchmarks, Cheng explained. Therefore, every city should have a master plan as guidance for city employees, giving them clear ideas about smart city, Cheng indicated.The city's Department of Information Technology is mainly responsible for promoting the smart city program. As of May 2018, the department had provided 1,443 items of data collected by the city government, including traffic, residential, vehicle thefts, flood water levels, parking facilities and air pollution attributable to factories, for open use. Since such data originally differed in format, the department has introduced OpenAPI Specification to shorten time taken by internal system developers to use such data. The city government aims to make every in-house-developed system avialable to the public.Citizen Cards are an example of smart city solutions, Cheng said. The card features multiple functions including personal identification, transportation tickets, electronic wallets, entrance control and access to various daily-life services. For mobile electronic payment, the card supports Apply Pay, Google Pay and Samsung Pay currently.Since it was launched in September 2015, the city government has issued over 1.1 million Citizen Cards, nearly half of the city's population, Cheng said.Industrial parks are under close environmental monitoringThere are six large industrial parks in the city and the city government has deployed sensors to monitor hot spots of pollution and use big data analysis to identify pollution sources.In response to frequent complaints about air pollution, the city government has cooperated with the Environment Control and Hazard Mitigation Technology Center under Chung Yuan Christian University to develop drones equipped with air pollution detectors for real-time monitoring of air quality at the Guanyin Industrial Park as a pilot project.Such drones undertake real-time detection of air pollutants including carbon monoxide, nitric oxide, sulfur dioxide, volatile organic compounds, PM1, PM2.5 and PM10 every two seconds at varying altitudes and turn out a set of data every 30 seconds, with data transferred to ground monitoring computers via wireless communication for analysis of hot spots of air pollution. The city government plans to match detected abnormal signals with data collected by nearby weather stations and air quality sensors to trace pollution routes and the sources.Smart management of infrastructureCheng said smart disaster prevention is also important. In precaution against flooding, the city government has deployed 61 flood water level monitoring stations and 28 rainfall stations since 2015, and has integrated measurements with flooding data collected by other agencies and developed a flooding information system.The city government has converted many sewer maps into a GIS-based digital database and set up sensors at sewers for cloud computing-based monitoring. So far, map data on more than 15,000 sections and manholes of sewers have been digitized.There are six water resource recycling centers (wastewater treatment plants) in operation in the city, with each equipped with testing instruments and cameras for transferring real-time data on water quality to the monitoring center and monitoring staff's smartphones.The city government has installed 160 smart LED streetlamps for demonstration and will another 450. Smart streetlamps include a lighting control system, data displays, an AI-based image search and recognition system, GPS tracking based on smart wearables, and free Wi-Fi services.Over 200 of the top-500 Taiwan-based enterprises are stationed in the city. There are about 11,000 factories and over 2,000 logistics service operators in Taoyuan. With the Taoyuan International Airport, and the proximity to the Taipei metropolitan area and Hsinchu Science Park, the city has the advantages to develop smart city solutions, Cheng indicated.For Taiwan's New Southbound Policy, the focus is not about moving factories to or selling products in Southeast and South Asian countries, but about establishing platforms for economic cooperation, Cheng explained.The city government will, in line with Taiwan's Asia Silicon Valley Development Plan, introduce more software-based smart solutions, boost Industry 4.0 and upgrade industries' business operation, Cheng indicated.In addition, the city government has been keen on promoting startup businesses: there is a project focusing on communication software via cooperation with the National Development Council; and another on Internet of Vehicles (IoV) and testing autonomous driving, Cheng noted.Taoyaun mayor Cheng Wen-tsanPhoto: Shihmin Fu, Digitimes, August 2018A smart LED streetlamp with mulitiple applications in Taoyuan Photo: Taoyuan City Government

The advent of the smart car era is providing an overtaking opportunity for latecomers that can master domain know-how at the client end and know how to develop profitable product design, packaging and sales models based on the latest market trends, according to Wu Hsueh-liang, professor with the Department of International Business at National Taiwan University.Wu told Digitimes in a recent interview that the communication industry used to be dominated by telecom operators, but later a forked way emerged to allow entry by IT firms. Likewise, smart cars, autonomous cars or electric vehicles have allowed many non-car players to enter the traditionally closed auto market. Wu said that some of his former students in the display industry used to see their companies devote much effort to supplying ever-larger panels for computer and TV applications, but they later turned to developing small-size, car-use LCD panels that can withstand high in-car temperatures of 70-80 degrees Celsius following 7-8 hours of sunlight exposure, which is hard to achieve with larger panels.Among similar niche products, industrial PCs see only a few makers in Taiwan as such PCs involve a certain technological threshold. For an enterprise, Wu indicated, whatever it wants to sell, such as solutions, products, components or raw materials, will entail different business models that are closely associated with profitability, strategies and organizations. Three major elements for solutionsMany think selling solutions will involve higher gross margins than selling components, but they may not know well what constitutes the solutions. Basically, solutions represent a close integration of hardware, software and domain know-how, with none of them dispensable. Among them, domain know-how associated with the client end is the most difficult to grasp. Those who possess domain know-how certainly know well where the solutions will be applied - hospitals, supermarket chains, or transportation systems - as well as the habits of users and their usage environments. Accordingly, they will know how to tune up related hardware and software to achieve the best user interface and experience, as well as operating efficiency, according to Wu.Many Taiwan tech firms tend to supply standardized modules to system integrators, enabling the latter to sell integrated solutions to terminal customers for much higher gross margins. This in turn has prompted the tech firms to transform their business into offering solutions, but the lack of domain know-how has made the transformation a difficult job, particularly for suppliers of IT components. But if led by system integrators, the transformation will become more feasible. Taiwan's Yulon Motor, for instance, can lead some component makers from the electronics and other industries to develop smart cars for global sales, and this will be a more feasible way Yulon can take toward the production of smart cars, Wu commented.For outsiders, Wu opined, the development of new products such as new airplanes will provide the best timing for them to tap into the supply chains as long as they possess leading engine or electrical control technologies and become members of the new plane development alliance.Likewise, Wu noted businesses will have a very good chance of joining smart car development alliances initiated by first-tier automakers once they have unique technologies and boast high international recognition.Front-stage operation capabilityIn the PC era, Taiwan's manufacturers got accustomed to backstage-driven business models, thus developing strong backstage operation capability and high operating efficiency. But in the mobile network era, they have suddenly lost the shelter of major brand vendors, having little idea about where to go due to their weak front-stage operation capability, according to Wu.Wu said that a US documentary film titled "The Merchants of Cool" can present lessons for Taiwan enterprises concerning how to carry out front-stage operations. The film features success stories of some famous US brands such as Nike and Sprite versed in grasping market trends and turning abstract concepts into concrete products. The brands have succeeded in analyzing the consumer trends implied in the catchword "cool" popular with the young generation in accordance with diverse data, and finally turning the trends into highly profitable product design, packaging and sales modes.If Taiwan firms can switch part of their massive investment in backstage operations to market research to learn the "pain and gain" factors of customers, they can start to accumulate domain know-how and know what customers actually need and why.

Taipei's Department of Information Technology, to promote its smart city program, will cooperate with OK Mart convenience store chain to set up a no-cash retail store at the city hall on a pilot basis.The retail store is to let customers experience electronic payments only. It accepts Taiwan's major store-valued cards and mobile e-payment services such as Apple Pay, Line Pay and Alipay, the department said.The department on June 25, 2017 launched pay.taipei, a smart platform via cooperation with O'Pay, JKO Pay and other e-payment operators to enable citizens to pay for roadside parking, water charges, taxes, administrative fees, traffic fines and medical care services at hospitals under the city government.

Co-chairman of SVT Angels and co-founder of Acorn Campus Ventures, T Chester Wang taught college courses in Saudi Arabia and invested in real estate in Silicon Valley before he began angel investing. From investing in real estate to investing in high-tech startups, from investing by himself to founding Acorn Campus Ventures with friends (Wu-Fu Chen and ‎David Tsang) and investing with a group of angel investors, Wang has many success stories as well as bad investments such as the one in eBay made without a real understanding of new business models.Drawing on his experiences, Wang calls on the Taiwan government to leverage Taiwan's strength and focus attention on the development of healthcare technologies while instituting flexible policies to allow exit mechanisms for startup firms so as to foster burgeoning startup developments.If a startup firm fails, the problem is either the market or the startup teamWang spoke frankly that he learned from his years of experiences that it is easier to invest in real estate than high-tech startups. For real estate investment, once you get to know the neighborhood you look to invest in, all you need to do is come up with the capital and find the ideal timing to enter the market. The real estate market operates on a boom and bust cycle based largely on supply and demand. Even if you get caught in a recession, you can wait for a few years and still be able to sell the property. Your biggest loss may be just the interest you have to pay. In contrast, angel investing involves professional knowledge of different industries. Moreover, as you invest in people, a wide range of factors can lead to success or failure. If the deal goes bad, you get zero return.Analyzing Acorn Campus Ventures' angel investment cases, Wang found that startup failures were rarely because they were unable to make the products but mostly because they targeted the wrong market, they failed to stay keen on market conditions, or the startup team had problems. With the US Telecommunications Act of 1996 in effect, new telecom technology companies were burgeoning at the time. Among them, Wang was optimistic about Anda's technology and therefore made an investment. Instead of accepting a merger offer of US$500 million in 2000, Anda wanted to proceed to IPO. Unfortunately, a year later, the 911 terrorist attack caused a stock market crash. The capital market became tight and firms were cutting down expenses by continuing to use existing telecom equipment and calling off their replacement plans, which seriously affected Anda's sales. Unable to make ends meet, the company fell into dire financial difficulty.What Anda encountered was a market problem, rather than a technology problem. You may not be able to avoid unexpected incidents but you can definitely prevent failures due to human factors. Wang thinks the founder plays a critical role in the startup team. It is important whether the founder possesses the characteristics: persistence, willingness to share, focus, modesty and leadership. Can the founder persist through hardships in the process of starting his own business? For example, when the firm has trouble paying employee salary or when product development runs into a wall, does the founder try everything to work things out or does he change direction every time he faces a problem? There will always be new problems ahead even if you change direction.Whether the founder is willing to share the fruit of success also affects team spirit. Some founders are selfish and boss team members around. It is unlikely such teams will succeed. There are also some startup founders who do not handle fame very well. When they get all the media attention and give speeches everywhere, they become so full of themselves that they lose track of what they do best, putting themselves on the road to failure.Taiwan holds advantages in healthcare technologies and traditional Chinese medicineYears ago, SVT Angels had a program to foster Taiwan's startup teams and sent a group of outstanding teams to Silicon Valley for a close look at how American startup firms operate. SVT Angels also helped them develop their projects and products. As one of their mentors, Wang observed that young people in Taiwan have excellent qualities and a visit to Silicon Valley can broaden their horizons.Before they came to Silicon Valley, they avoided talking to people about their startup ideas in fear of disclosing their trade secret. However, the visit to Silicon Valley made them realize that discussing their ideas with people can help them validate market needs, broaden their horizons and open their eyes, said one team member under Wang's guidance when sharing his experience. Enhancing English proficiency is the suggestion that Wang gives to Taiwan startup teams. In contrast to teams from other Asia Pacific regions, such as Singapore and Hong Kong, Taiwan startup teams are not fluent enough in English. The world is flat and competition is more intense than ever before. You cannot engage in profound discussion with people without fluency in English.Excellent teams still need good startup ideas. Wang suggests that Taiwan startup teams work on healthcare technology development. Wang once assisted a Taiwan startup team at Stanford University obtain FDA approval. According to Wang, 70% of investments in the medical field are for development of new drugs. Although Taiwan lacks advantage in this respect, startup teams can still work on small-scale clinical studies. Furthermore, Taiwan's unique national health insurance database also gives startup teams an edge in their endeavors toward healthcare technology development.In addition, traditional Chinese medicine is also an area that Taiwan startup teams can work on. The most popular keyword searches by Americans in Chinese are for information related to traditional Chinese medicine. With clinical practice dating back to 4,000-5,000 years ago, traditional Chinese medicine is a proven science and worthy topic of research for commercialization. Acorn Campus Ventures has investments in a Taiwan-based postpartum meal delivery service firm, which also plans to expand into China and Malaysia, targeting the local Chinese population. The firm is generating good profit.Taiwan has many additional advantages. For example, six degrees of separation (the theory that any person is connected to another by six or fewer acquaintances) works very well in Taiwan, a small society where it's easy to find out if someone is credible and thereby build a trustworthy team. Moreover, with market mechanisms and systems more in line with international business practice, Taiwan can be a reliable partner for international businesses planning to enter the China market, where it may be difficult for foreign firms to quickly establish trust amid its massive market scale and unforeseeable circumstances.Last but not least, Wang advises that to foster a booming startup industry, the Taiwan government should adjust its policies to allow startups to have exit mechanisms, for example, easing control on merger deals. Acorn Campus Ventures invested in Crown Bioscience, a research firm providing services for new drug development. Soon after going public, the company was acquired by a Japan-based corporation for US$600-US$700 million in cash. Although Crown Bioscience was then delisted, the deal gave the founder and investors a sizeable return on investment. More such success stories will spur investor interests in startups and more capital funneled into startups will encourage entrepreneurship. Wang thinks instead of supporting a few companies to go public, the Taiwan government is better off instituting flexible policies to provide startups exit mechanisms or easier merger opportunities."When money flows out of the capital market, it has a chance of flowing back," said Wang.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)Chester Wang, Acorn Campus co-founder and co-chairman of SVT AngelsPhoto: Joseph Tsai, Digitimes, May 2018