Page 17 - 2024 BRAVO! TAIWAN_en

5+2 Innovative Industries Program

For many years, Taiwan's economic development model focused on contract manufacturing of ICT
products for export. This model not only sustained Taiwan's growth momentum, but also established Right Moment
a highly-efficient manufacturing advantage. Nevertheless, in the wake of Industry 4.0, and such global
economic shifts as the reindustrialization of European and North American countries, emergence
of supply chains in China, and the U.S.-China trade conflict, Taiwan's past "contract manufacturing"
industrial development model faces major challenges. In addition, with the rise of the new digital
economy, Internet titans such as Google, Facebook, and Amazon have overturned the existing operating
models of industries. Furthermore, digital technologies including the Internet of Things (IoT), artificial
intelligence (AI), and blockchain technology have accelerated the development of such innovative
models as Taiwan's platform economy, experience economy, and sharing economy.

Responding to the dual challenges of changes in the global division of labor and rise of the digital
economy, Taiwan must seek a new position in global value chains, and must accelerate the structural
upgrading and digital transformation of its industries if it is to seize opportunities for development in
the digital economy. According to data from the World Economic Forum (WEF), Taiwan's economic
development level formally shifted from the "factor-driven" and "efficiency-driven" stages to the
"innovation-driven" stage in 2011. In the face of the age of the digital knowledge economy, innovation
will be a main driving force behind Taiwan's economic growth, and will be an essential key to industrial
transformation and upgrading.

In order to create an innovation-driven economic growth model, and make the most of the advantageous
status of domestic industries, the government has promoted the "Asian Silicon Valley", "smart
machinery", "green energy", "biomedicine", "new agriculture", "national defense", and "circular economy"
industrial innovation programs in line with its three linking principles of "Connect Locally", "Connect to
the Future", and "Connect Globally." These programs point the way to future industrial development
directions, and build on existing 5G, artificial intelligence, big data, IoT, and blockchain technologies to
promote the 5+2 Industrial Innovation Plan 2.0, strengthen the development of innovative industries and
new technologies, and promote industrial upgrading to bring new momentum to economic growth.

Asia Silicon Valley (IoT)

Policy Focus

In order to increase applications for AIoT and enhance investments in startups, Asia Silicon Valley is
proactively incorporating AI, 5G, and other key technologies of the digital economy. The incorporation
follows the two major themes of "using smart IoT to accelerate industry transformation" and "using
innovative startups to propel industries forward." Asia Silicon Valley is aiming to encourage
international export of AIoT solutions, enhance digital applications, and foster startup
development in order to position Taiwan as a key force for digital innovation in Asia. In
order to do so, it is adopting the three strategies of expanding AIoT applications, creating
an environment to foster startup development, and to maximizing the collective output of
the system. Details are as follows:

¾ Expand AIoT Applications
Accelerate R&D of key AIoT technologies; Promote localized applications of 5G open
networks; Develop innovative services for smart transportation and commerce with 5G,
AI, and federated learning to promote smart cities.

¾ Environment to Foster Startup Development
Expand investment and financing; boost Taiwan's appeal to international professionals;
facilitate industrial exchange and cooperation; create innovation clusters that meet
international standards to support new ventures and connections with international

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