The Taiwanese Experience in Transition EBRD發掘歐銀受援國轉型商機 研討會 March 7, 2017 Paul S. P. Hsu Chairman, Association of Emerging Market Studies Chairman & CEO, PHYCOS International Co., Ltd. Founding Chairman, Epoch Foundation

Agenda

Index Preface Taiwan Experience Taiwan’s Economic Path of Transformation in the Past 60 Years Education System Requires Changes in Taiwan Revitalization of Education System Commercialization of R&D Result The Evolution of Agriculture Sector in Taiwan Taiwan Experience in Development of Healthcare Industry Healthcare Industry in Taiwan Major Components of Taiwan Government’s Policy of Developing Biotech Industry Community Development in Taiwan –Smart City & Smart Village Human-Centric Smart The Roadmap of Smart Village

Preface

Preface From the last decade of the 20th century into the 21st century, the trend of a global-scaled redistribution of wealth is quietly but rapidly taking place; the rising of emerging market economies is becoming evident; the boundary between socialism and capitalism is blurring; and the relationship between government and governed is constantly under test. New business model development equals the importance, if not more, of technology development; some long neglected traditional business sector is given increasing attention; and the change of lifestyle generates new business opportunities. It is then evident that we are all facing a brave new world, regardless we like it or not.

Taiwan Experience

Taiwan’s Economic Path of Transformation in the Past 60 Years Import substitution 1960s: Import substitution/ Export-oriented economy 1970s： Export-oriented economy/ Development of technology industry/ Capital inflows 1980s: Export-oriented economy/ Development of technology industry/ Capital inflows/ Capital outflows 2010→？ Global trend of wealth redistribution 1990s: Export-oriented economy/Development of technology industry/Capital outflows/Acceleration of infrastructure development/Entering the global supply chain 2000s： Asia-Pacific Regional Operations Center/Knowledge-based economy/High value-added service industry/Value-added manufacturing industry 2008→？ Global financial crisis resulted in global economic chaos

Ranked No. 5 in the world as of 2016 Taiwan Experience In 1948, the foreign exchange reserves of Taiwan was only USD 170 million. Taiwan Miracle by 2017 Jan., the foreign exchange reserves of Taiwan was beyond USD 436 billion. Ranked No. 5 in the world as of 2016 Economic transformation Social transformation Political transformation Source: https://en.wikipedia.org/wiki/Taiwan_Miracle#cite_note-1 https://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

Education System Requires Changes in Taiwan Revitalization of Education System Education is an Important Industry Leading to Incubating the Talents for the Future, Commercialization of R&D Results as well as Promoting New Startup Companies

Revitalization of Education System 10 Revitalization of Education System To improve the quality of educational institutions To enhance international initiatives to train human talent needed in emerging markets To inspire independent and creative thinking To encourage private sector to get involved in the educational system To retrain the workforce: not only manufacture sector but also knowledge-based service sector Cross-cultural learning Lifelong learning Shared curriculums To incubate a new generation of talent to be the backbone of an affluent future middle class

Research institution/ University Education is an Important Industry Leading to Incubating the Talents for the Future, Commercialization of R&D Results as well as Promoting New Startup Companies R&D Intellectual property rights Licensing Technology transfer Spin-off company Industry sponsor Industry Research institution/ University Stock option/Cash

The Evolution of Agriculture Sector in Taiwan

The Evolution of Agriculture Sector in Taiwan To redefine the agriculture sector Food safety becomes an important consideration To enhance international cooperation Farmers’ Association in Taiwan becomes the bridge between agriculture industry and small farmers Agriculture research funded by government and/or agriculture industry: Lower the burden of small farmers 只是一個例子～

Taiwan Experience in Development of Healthcare Industry Healthcare Industry in Taiwan Major Components of Taiwan Government’s Policy of Developing Biotech Industry Biotech 省略

Healthcare Industry in Taiwan 15 Healthcare Industry in Taiwan Biotech Application Company: 510 Total revenue: USD 2.7b CAGR 2006~15: 8.20% CAGR: Compound Annual Growth Rate Taiwan has become PIC/S GMP members already. Pharmaceutical Company: 320 Total revenue: USD 2.4b CAGR 2006~15: 1.80% Medical Device Company: 1041 Total revenue: USD 4.1b CAGR 2006~15: 7.40% PIC/S: Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme Healthcare Delivering System Ex. Hospital management , healthcare reform etc. 加註：CAGR , consolidate of GMP: Good Manufacturing Practices Source: Biotech industry in Taiwan, 2016; PHYCOS Annotation: Exchange rate is average of spot buying and selling exchange rate at 12/12/2014 from Bank of Taiwan.

Major Components of Taiwan Government’s Policy of Developing Biotech Industry R&D Commerciali -zation Pre-clinical test Product Biotech value chain Government: Infrastructures and Regulations Involved parties Research institutions/ Universities Private/Public funded incubation centers Private companies/ Individuals Government funding 1. Venture capital 2. Corporate funding 3. International funding Funding sources Government funding Venture capital Industry sponsor

Community Development in Taiwan -Smart City & Smart Village Human-Centric Smart The Roadmap of Smart Village

Human-Centric Smart Source: http://www.ibm.com/smarterplanet/us/en/smarter_cities/overview

The Roadmap of Smart Village Infrastructure Transportation Energy Recycled energy ICT E- commerce Information Big data Logistics Smart Village Roadmap 4G/5G Digital city Utility Smart IOCC EMS Smart grids Green & Smart arch ITS Guiding Parking Metro system ICT: Information and Communications Technology IOCC: Integrated Operations Control Center ITS: Information Technology Services EMS: Express Mail Service Source: Dr. Wei F. Lee

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