Visit to Taiwan 29 March-3 April 2010

Report By:

Mervyn Levin Founding Director, Levering Ltd
mervyn.levin@gmail.com 

Visit to Taiwan 29 March-3 April                                                              
I visited Taiwan for the first time as part of a Science and Technology Mission to Taipei for an ICT Workshop on Smart Grids and Green Communications.

The Mission was superbly co-hosted by the Communications Research Centre of National Taiwan University (NTU), the National Science Council (NSC), and the British Trade and Cultural Office (BTCO) in Taipei.

My Company, Levering Ltd, participated in the Mission representing Shaspa, which focuses on smart shared spaces for physical and virtual environments. Other participants were from the Universities of Surrey, Edinburgh and Swansea. 

Taiwan’s prowess in engineering design excellence is world leading for laptops, PCs, datacomms and mobile phones.

This stems from a 30-year old Information and Communications Technology (ICT) industry grounded in the evolution of first generation games consoles, electronic watches and calculators.

Prominent companies include Quanta, Compal, Wistron, Inventec, ASUSTeK, Mediatek, HTC, D-Link and ZyXEL.

The facts speak for themselves:
85% of PCs installed in the world with Windows Operating Systems are produced by Taiwanese IT companies and approximately 80% of worldwide communications equipment is produced by Taiwanese networking communications equipment companies.                                                  

The Taiwanese Government has announced that it will spend US$3.4 billion in grants for smart grid developments and it will attract US$1.8 billion of business in Taiwan this year as part of the goal of achieving a sustainable, low carbon economy. 

The challenges for green technologies are more than those of environmental protection – it’s about the drive for cost saving.  

According to the University of Surrey, currently 3% of the worldwide energy is consumed by the ICT infrastructure contributing ~ 2% of the worldwide CO2 emissions.  This is comparable to the world-wide CO2 emissions by airplanes or ¼ of the world-wide CO2 emissions by cars.  The transmitted data volume increases approximately by a factor of 10 every 5 years.  Power consumption of ICT is currently rising at 16-20% / year and doubling every 4-5 years.  Energy consumption of Mobile Networks is growing much faster than ICT on the whole. 

We also visited Hsinchu, the city that is the base for high technology industry and with the highest income level in Taiwan.  We travelled there from Taipei by high-speed train.  Hsinchu Science and Technology Industrial Park is home to 360 hi-tech companies including TSMC, Philips, United Microelectronics Corporation, Holtek, AU Optronics and Epistar.

We visited the Industrial Technology Research Institute (ITRI) www.itri.org.tw ITRI employs 6000 people generating US$600 million in revenue annually.  This is the leading research institute for the hi-tech industry for Taiwan generating its own IPR, spinning out companies and helping to make them competitive.  ITRI is co-funded by Government and industry.  The scope is multi disciplinary spanning ICT; material, chemical and nanotechnologies; biomedical technologies; advanced manufacturing and systems; and energy and environment.  A key focus is supporting SMEs on R&D and facilitating technology transfer across a range of sectors.

ITRI model is similar to that of the Electronics Telecommunications Research Institute (ETRI) in Korea, which I visited in 2008.  Both are very impressive.  Taiwanese I met told me that ETRI emulated ITRI’s model.  These models are remarkably different from the UK in that the UK does not have a single, overarching body to coordinate the commercialisation of applied R&D to applications, services and products.  

Some observations and reflections on Taiwan:-

• Taiwan places a premium on the development of human capital for hi-tech industries, e.g. nano, life sciences, ICT, energy, environment.  This is imperative given that Taiwan is not endowed with an abundance of natural resources.
• This is a highly aspirational society where around 1 million out of a total population of 23 million have an advanced (post-graduate) degree.  The ambition to be a semi-conductor engineer is similar to the prestige (as was?) of going into the City in the UK.  Semi-conductor moguls have clout here.
• Innovation by Taiwan in the range of engineering disciplines is world leading.  Consensus among Taiwanese I spoke with is that Mainland China remains a fast follower, at least for now.   
• National Taiwan University, the country’s leading University situated on a large, beautiful campus, has a strong commitment to collaborate with the UK’s research base.  They recognise the UK’s formidable strengths in basic research with more universities in the world’s top 50 than the rest of the EU together.
• Taiwanese are very open, pragmatic and outspoken.  Complacency is not in the mindset.  Like Koreans, they need to be outward looking and export oriented without the benefit of large domestic markets compared with those of Japan and China. 
• Taiwanese I spoke with say that IPR protection is strong and robust, comparable to the IPR legal framework of Hong Kong and Singapore.
• Supply chains from Taiwan are complex, with much of the manufacturing in scale done in Mainland China through a combination of JVs and outsourcing, and then exported, often via Hong Kong.  Taiwanese companies say they exercise rigorous quality control on the Mainland.
• Taiwan’s economy is characterised by the large number of SMEs, which comprise 97% of companies.
• The Creative Industries in Taiwan lag both other countries and the domestic electronics industry in terms of the generation of innovative applications and content.  The Government is seeking to address this area.
• Taipei has an eclectic atmosphere - Chinese with large doses of American and Japanese influence.  Combined with the influence of a variety of ethnic groups, this gives the place a unique tempo and temperament.   This is much more different than I had expected given my first hand experience of over 20 Chinese cities. 
• Taipei is also vibrant.  Surrounded by mountains, the city has the tallest skyscraper in Asia (101 floors), an exceptionally huge variety of healthy food (food safety is rigorously enforced for a highly demanding population).  I visited a mega sweet shop for geeks – the 7-floor Digital Plaza with a dazzling range of electronics.  The National Palace Museum is exceptional in terms of the large variety of artifacts on display from Chinese Dynasties.
• Taipei also seems a comfortable environment, marked neither by over the top glitz nor mass poverty.  It also appears more egalitarian in terms of wealth distribution than many other Asian cities.
• The overwhelming majority of senior academics and businessmen seem to have had stints abroad for study (mainly US) and/or for work - and are completely comfortable in English.  The feeling is that most educated Taiwanese think in English, which reduces the cultural barriers for Westerners compared with many other places in Asia.    
• The British Trade and Cultural Office in Taipei is committed to continuing championing a series of exchanges between UK and Taiwan involving industry and the research community across key sectors and disciplines.