Transforming the Digital Divide into a Digital Opportunity Ting-An Wang, Ph.D. Deputy Executive Secretary, Science & Technology Advisory Group The Executive Yuan (The Cabinet), Taiwan Feb. 20, 2003

Outline Contributions in APEC of Transforming the Digital Divide into a Digital Opportunity A Good Example – e-Taiwan Project Conclusion

Contributions in APEC of Transforming the Digital Divide into a Digital Opportunity

Background & Objectives Reducing digital divide has become most important elements of APEC’s regional development. Strengthening capacity building through public-private partnerships to address the serious potential for the digital divide across the APEC region. Ensure all people and small & medium sized enterprises (SMEs) in developing economies are well benefit from the digital society. Faced with the challenges of an increasingly globalized economy, with ICT, and e-commerce playing an ever more important role, developing e-commerce capability has been high on the APEC agenda. In this context, reducing the digital divide has become one of the most important elements of APEC’s drive toward regional development. To address the serious potential for the digital divide to further widen social and economic disparities across the APEC region, it is essential to strengthen capacity building through public-private partnerships. These can ensure that all people, including in developing economies and in small and medium sized enterprises, are well positioned to benefit from the formation of a digital society.

Implementation “Transforming the Digital Divide into a Digital Opportunity,” was proposed by Chinese Taipei and endorsed by APEC Ministers in November 2000. Phase I of the initiative, a symposium, was concluded in Taipei in July 2001. A survey of 12 developing economies was conducted in November 2001. Supply chain management and capacity of SMEs to do e-business are the top priority from the result. Three training workshops were convened in August-September 2002 in Thailand, Indonesia and Mexico. Speakers in industrial or IT services were invited from Australia, Canada, Korea, New Zealand, Singapore, U.S.A. and Chinese Taipei. Funding was provided by APEC TILF fund, Chinese Taipei and co-hosting economies. The two-phase initiative “Transforming the Digital Divide into a Digital Opportunity,” was proposed by Chinese Taipei and endorsed by APEC Ministers in November 2000. Phase I of the initiative, a symposium, was concluded in Taipei in July 2001. To prepare for implementation of Phase II of the initiative, a survey of 12 developing member economies, was conducted in November 2001. Its result indicated that supply chain management and the capacity of SMEs to do e-business are among the top priority areas of need in developing a digital society. Based on the survey, three training workshops were convened in August-September 2002 in Thailand, Indonesia and Mexico. Each session lasted for three days and featured lectures, group discussions, and site visits, etc. With the support of member economies, speakers with first-hand experience in industrial or IT services were invited from Australia, Canada, Korea, New Zealand, Singapore, U.S.A. and Chinese Taipei. Funding for the three workshops was provided by APEC Trade, Investment, Liberalization & Facilitation fund, Chinese Taipei and by the three co-hosting economies.

Highlights of the Workshops -- Thailand : August 28-30, 2002 -- Mexico : September 10-12, 2002 -- Indonesia : September 17-19, 2002 Participants: -- Total number of attendees was over 250. -- Participants were from the business sector and government agencies of the hosting economy. -- 6-10 delegates from APEC developing economies attended with program sponsorship. -- Participants presented their own economies’ current e-business or e-government development situation. Workshops: -- Thailand : August 28-30, 2002 -- Mexico : September 10-12, 2002 -- Indonesia : September 17-19, 2002 Participants: -- The total number of attendees for the three workshops was over 250. Workshops varied from 50 to 160 participants. -- The majority of participants were from the local community of the hosting economy and included representatives of the business sector and government agencies. -- Around 6-10 delegates from APEC developing economies, such as Philippines, Malaysia, Indonesia, Thailand, Vietnam, Papua New Guinea, Mexico, Peru, and Chile, attended with the help of sponsorship provided by this program. -- These participants delivered brief presentations on the state of current e-business or e-government development within their own economies.

Key Issues how to Transform Digital Divide into a Digital Opportunity (1) E-Supply Chain Management: Implications and Challenges E-business is a must to survive in globalized economy. The key drivers are processes, technology, and people. The foundation is comprehensive telecommunications infrastructure. Communication network is a must for SMEs Challenges faced by SMEs in implementing B2B e-commerce cultural differences & language barriers lack of clear business/revenue model internet security lack of qualified personnel interoperability among e-commerce applications executives’ awareness/ user authentication ’ challenges E-Supply Chain Management: Implications and Challenges E-business is not an option but a must to survive in globalized economy. The key drivers for e-Business are processes, technology, and people. The foundation that is necessary for e-Business to be able to grow in developing economies is a comprehensive telecommunications infrastructure. the communication network is a must the capacity of SMEs is to be increased in this information age. Challenges faced by SMEs in implementing B2B e-commerce cultural differences & language barriers lack of clear business/revenue model internet security lack of qualified personnel interoperability among e-commerce applications executives’ awareness/ user authentication ’ challenges

Accessibility & affordability are the major barriers in digital divide Key Issues how to Transform Digital Divide into a Digital Opportunity (2) Accessibility & affordability are the major barriers in digital divide Government’s Roles setting the vision and strategy to take a leadership role As a role model for e-business and placing service on-line resolving telecommunications/Internet access infrastructure issues providing funding to assist business adoption of e-commerce conducting education programs fostering international cooperation addressing standards and security creating a regulatory environment Accessibility & affordability are the major barriers for developing economies in digital divide : lack of basic infrastructure, high cost for telecommunication, barriers between city/country Government’s Roles setting the vision and strategy to take a leadership role in championing e-business placing government services on line through e-government programs. The government has to be a role model for e-business resolving infrastructure issues such as improved telecommunications and hi-speed internet access providing funding for key programs and to assist business adoption of e-commerce conducting education programs fostering international cooperation to learn from other countries addressing standards and security including PKI creating a regulatory environment which reduces risks and removes barriers

A Good Example – e-Taiwan Project

Milestones of ICT infrastructure in major countries 92 UK Online ▲01 ▲96 ★97 ★98 ▲00 IT 2000 Singapore One IT in Education Electronic Transactions Act Infocomm 21 Singapore ▲93 ★95 ▲97 ★98 ▲99 ★01 NII EC Working Group Global EC Framework 1st Report 2nd Report eGovernmenteSociety 3rd Report USA ▲96 ▲98 ▲99 ▲00 Building the Knowledge Driven Economy UK Information Society e-commerce@its.best.uk ★ ★ Modern Government eGov Services for the 21st Century ▲95 ▲99 ▲01 e-Japan The S&T Basic Law Millennium Project Japan ▲93 ★94 ▲95 ▲99 ▲01 KII MIC BAPI Cyber Korea 21 e-Korea Korea ▲96 ▲97 ▲98 ▲99 Taiwan NII e-Government e-Industry NICI 3Year 3 Million Internet Users 1992 1993 1994 1995 1996 1997 1998 1999 2000 1992：Major IT Countries engaged various ICT projects (NII) 1999：Japan, Korea, Singapore launched major e-projects e-Japan / Cyber Korea 21 / Infocomm 21

Taiwan e-Government Status (2001) Current Consolidate Re-engineer 2001 Government Information Application Complete Transaction Singapore Redefine US UK Government On-line Service Capability Answer Question Japan Rethink Taiwan Korea Provide Information Redo Government Responsiveness

Taiwan’s Challenges & Opportunities Taiwan ranks No.10 in Information Society Index –IDC (2001) Broadband penetration ranks No. 4 – eMarketer (2002) DSL penetration ranks No. 2 – Point-topic (2002) Internet Host ranks No. 3 – Network Wizards (2002) Mobile Phone penetration ranks No.2 worldwide –ITU(2001) Taiwan hardware production : Global Ranking #4 Low value-added products : 79% of total IT revenue Taiwan software revenue is only 7-8% of IT revenue Opportunities Broadband population still way behind Korea Information application among traditional industry to catch up Digital divide in remote area and under-privileged to be bridged up if not totally eliminated More enterprises to be brought online Facing the challenge of global knowledge based economy, out-moving business and decreasing total revenue. IT industry needs to invest in information technology, strengthen R&D capability and upgrade with knowledge based economy to stay competitive. Challenges

Knowledge Based Economy e-Taiwan Project Mission Manufacturing Venture Capital R & D Knowledge Based Economy Internet Usage WEF/NRI GDP 10 5 Current Economy Challenges Knowledge Based Economy Slowing Economy Growth Changing Industry Structure e-Infrastructure Information Society 5 Trillion e -Society e-Taiwan Project e-Government Hsinchu Science-based Industrial Park Ten Emerging Industry Industrial Society e -Transportation e-Industry Export Industrial Park Ten Infrastructure Projects 13 NII Projects Custom Protection Import Control 1950 1960 1970 1980 1990 1996 2000 2002 2007 Import Substitution Policy Export Expansion / Heavy Industrialization Policy High-Tech Policy e-Taiwan

e-Taiwan e-Taiwan Project Vision Infrastructure e-Business e-Society High-Tech Service Island Knowledge Based Economy e-Taiwan Green Silicon Island Information-rich Society Competitive Industry Effective Government Intelligent Transportation Best information available to its citizen Best supports to its industry to stay competitive One-Shop services to its citizen Best transporta- tion services to its citizen e-Business e-Government e -Transportation e-Society NII Advanced Telecomm technology NII GII GII Broadband to every family Infrastructure  

e-Taiwan Scope e-Taiwan Government initiates, everybody participates. Reach 6 million broadband users in 6 years. Become the e-Leader in Asia. Government initiates, everybody participates. e-Society e-Industry e-Government e-Transportation e-learning digital archive digital entertainment web culture development remote public services e-learning for small-to- medium enterprise e-learning for farmers real estate info center Collaborating e-design agriculture knowledge management Small to medium enterprise knowledge management International e-commerce cooperation program one-shop service G2B2C document exchange video conference network IP information system household registration hazards mitigation infomation center hazards mitigation communication system ITS platform & system development transportation service network smart bus & IC card transportation safety system Intelligent traffic control system Infrastructure 6 million broadband users wireless LAN IPv6 Upgrade national security system broadband for small and medium enterprise

Major e-Index Measurement National Economy Competitiveness IMD & WEF Information Capability e-Government e-Business e-Society Government Service On-line e-Business Environment Enterprise Readiness Support of Supply Chain e- Leadership PC Population Communication Infrastructure Information Exchange On-line Document Exchange On-line Social & Cultural Infrastructure Innovation & Creativity Internet Infrastructure Connectivity Legislation Source：MOEA Internet Research Plan / III ECRC-FIND arranged from EIU, IDC及WMRC.

Goals of Taiwan’s E-Readiness

Predicted Benefits Economy create 20,000 jobs total e-Service revenue NT$300 trillion industry online 60% e-Commerce is 15% of GDP Public Services bring 600 services online G2B2C document exchange rate up by 55% in 5 years satisfaction level reaches 75% IT Application #5 Internet Usage (WEF/NRI) #5 e-Government (WEF/NRI) #12 e-Industry Readiness Infrastructure Internet users reach 50% of population broadband users reach 35% of population overall country bandwidth reach 1,150Gbps undersea cable bandwidth reach 250Gbps

Government’s role is one of an enabler, leader and educator. Conclusion Government’s role is one of an enabler, leader and educator. Taiwan will continue to support developing countries for projects to reduce digital divide. These projects include experience-sharing workshops, IT school setting in Thailand, Maxico. Developing countries should create a regulatory environment and take a leadership role in championing e-business. Developing countries should resolving infrastructure issues, market entry barriers, and conducting education programs to lead the investment efforts from developed economies. In sum, government’s role is one of an enabler, leader and educator. Taiwan will continue to cooperate with other developed countries or international organizations to support developing countries for projects to reduce digital divide. These projects include experience-sharing workshops, IT school setting in Thailand, Maxico. Developing countries should create a regulatory environment through policy & legal structure setting to take a leadership role in championing e-business Developing countries should resolving infrastructure issues, market entry barriers, and conducting education programs to lead the investment efforts from developed economies & fostering international cooperation to learn from other countries