AIT/W’s Norris Calls on AmCham

During his first visit to Taiwan since taking his current position in September 2016, John J. Norris Jr., Managing director of the American Institute in Taiwan’s Washington office (AIT/W), met with AmCham Taipei governors and senior staff on October 26 at the Chamber’s Lincoln Room for an exchange of views on U.S.-Taiwan economic relations. Norris had previously met with AmCham’s “Doorknock” delegation in Washington in June.

The topics raised by AmCham included:

  • The significance for both the Taiwanese and U.S. economies of the close collaboration between companies in the two countries in the field of semiconductors, and the importance of maintaining the security of advanced technology in that industry.
  • The benefit that Taiwanese investors could receive from pension reform that opens the market to wider choice for individual consumers.
  • The difficulties for both employers and employees caused by the recently implemented Labor Law revisions that impose rigid regulations regarding working hours, overtime pay, and other working conditions.

A career foreign service officer, Norris served in both AIT Taipei and AIT Kaohsiung early in his career. Among his other posts related to Taiwan, he was Director of the Office of Taiwan Coordination (1998-2000) and Deputy Assistant Secretary of State for East Asia and Pacific Affairs (with responsibility for China, Taiwan, Hong Kong, and Mongolia) from 2008 to 2009.

U.S. Permanently Authorizes APEC Business Travel Card

Following successful lobbying by APCAC (the Asia-Pacific Council of American Chambers of Commerce), the U.S. Congress recently passed legislation to permanently authorize the APEC Business Travel Card (ABTC). Aimed at facilitating business travel for U.S. citizens and government officials engaged in verified business in the APEC region, the U.S. APEC Business Travel Card enables access to fast-track immigration lanes at airports in the 21 APEC member economies. Users of the APEC Business Travel Card must also be participating in a Customs and Border Patrol trusted traveler program. APEC Business Travel Card users enjoy pre-cleared, facilitated, short-term entry to participating member economies, reducing costs and waiting times.

For more information on the APEC Business Travel Card, visit the U.S. Customs and Border Protection website.

Strategic IP Considerations on Industry Innovations in the Digital Era

Cloud-fueled digital transformation is driving innovation, touching every individual and industry, in what some call the Fourth Industrial Revolution. Companies around the world are racing to transform their business and succeed in the new digital age, or else face the risk of disruption.

AmCham Taipei’s IP&L Committee invited Erich Andersen, Corporate Vice President & Chief IP Counsel of Microsoft Corp., to deliver a presentation on “Strategic IP Considerations on Industry Innovations in the Digital Era” at a luncheon at the Mandarin Oriental Taipei on October 23.

Andersen referred to Johnson Controls as an example of a company that uses sensors from a building or environment to generate data such as temperature, humidity, and air quality so as to provide services based on customers’ needs. Using Azure, a cloud computing platform and service solution by Microsoft, Johnson Controls can store valuable data from connected buildings in a centralized computer or cloud server without having to worry about service interruption.

From left to right: AmCham Intellectual Property & Licensing Committee Co-chair Peter J. Dernbach, Partner of Winkler Partners; Speaker Erich Andersen, Corporate Vice President & Chief IP Counsel of Microsoft Corporation; AmCham President Andrea Wu; Chris Neumeyer Special Counsel, Duane Morris & Selvam Taiwan, Foreign Legal Affairs Law Firm; and AmCham Intellectual Property & Licensing Committee Co-chair Vincent Shih, Assistant General Counsel, GM, Corporate, External & Legal Affairs, Microsoft Taiwan Corp.

As companies shift from traditional computing to the cloud, they need to rethink the business risks involved as data is digitalized. These risks include 1) security, 2) intellectual property protection, 3) compliance issues, 4) data privacy, and 5) data sovereignty. Andersen shared with the audience some of the risk mitigation strategies:

  • Review the terms of service provided by cloud technology suppliers to protect your business from third-party IP claims, and ensure that you understand the implication of limitations of liability and use of open source software on the products and services covered.
  • Develop your own patent portfolio to secure your innovations, especially technologies relevant for your competitors, and to deter or defend against patent lawsuits.
  • Obtain licenses to third-party IP to reduce your business risk, increase business flexibility, and provide basic defense against non-practicing entities (NPEs).

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The Global Economic Outlook

At a joint luncheon meeting of AmCham Taipei’s Asset Management, Banking, and Capital Markets Committees on Oct. 20 at the Grand Hyatt Taipei, Belinda Boa, the Hong Kong-based Managing Director of BlackRock Asset Management North Asia, gave a presentation on “Global Economic Outlook,” providing a briefing on the global BlackRock investment team’s assessment of the prospects for the world economy in the year ahead. Among her key points:

  • A gradual rise in interest rates can be expected in the U.S., probably regardless of who is named as the next Federal Reserve chairman. After having forecast rate hikes many times that did not occur, most other analysts are no longer making that prediction. But BlackRock expects rates to increase, though not to the same level as before the global financial crisis.
  • Investors should not necessarily be put off by the currently high equity valuations in the U.S., as the price has been justified by earnings. But preference should be given to other markets. The environment seems especially favorable for emerging markets.
  • Geopolitical factors are injecting more unpredictability than usual into the market. Some major examples are the North Korean nuclear threat, renegotiation of the North American Free Trade Agreement (NAFTA), and growing tensions between the United States and China. There is concern over the possibility of a geopolitical surprise.
  • BlackRock expects sustained economic expansion and is positive on “momentum” and “value” stocks, especially in emerging markets, Japan, and Europe (it is neutral on U.S. stocks). On the fixed-income side, it likes U.S. investment-grade credits.

From left to right: Vincent Ma, CEO / Managing Director, BlackRock Investment Management (Taiwan) Ltd.; AmCham Asset Management Co-chair Christine Jih, Chairman & Chief Executive Officer of BNP Paribas Investment Partners Taiwan Co., Ltd.; AmCham President Andrea Wu; Speaker Belinda Boa, Managing Director, Head of Active Investments for Asia Pacific and Chief Investment Officer (CIO) of Emerging Markets Fundamental Active Equity of BlackRock; AmCham Governor Leo Seewald, Chairman / Managing Director, BlackRock Investment Management (Taiwan) Ltd.; AmCham Asset Management Co-chair Derek Yung, Chairman of Alliance Bernstein Investments Taiwan Ltd.; AmCham Pharmaceutical Committee Co-Chair Lai Li Pang, Managing Director, Merck Sharp & Dohme (I.A.) LLC, TW Branch; and AmCham Advanced Learning Lab Advisor William Zyzo, Advisor, Training Director, Z&A Knowledge Solutions

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Making Corporate Transformation Happen

What happens when a large, well-established, global corporation finds its market leadership position threated by seismic changes taking place in its industry? Microsoft recently undertook the largest and most significant transformation in its 42-year history, one that impacted every one of its 120,000 employees in more than 200 locations worldwide.

On October 19, AmCham Taipei invited Andrew Pickup, Senior Director of Communications from Microsoft Asia, to give a presentation on “Making Corporate Transformation Happen.” The session was held at the Shangri-la’s Far Eastern Plaza.

From left to right: AmCham Secretary Vincent, Assistant General Counsel, GM, Corporate, External & Legal Affairs at Microsoft Taiwan Corp.; AmCham President Andrea Wu; Speaker Andrew Pickup, Senior Director of Communications at Microsoft Asia AmCham; and AmCham Supervisor Nadia Chen, Country Executive, The Bank of New York Mellon Taipei Branch

Pickup shared with the audience the challenges (and opportunities) Microsoft saw as worldwide PC shipments and sales figures continued to decline over the last decade. In transforming the business to deal with that trend, he said, Microsoft focused on the following priorities:

  • Organizational Design–ensuring that business units, including engineering teams, are fully aligned with business outcomes.
  • Outcomes and Incentives – making sure desired outcomes are clearly communicated and understood, and that a reward system is in place to provide incentives.
  • Training and Readiness – providing guidance so that employees feel fully confident and supported throughout the transformation process.
  • Culture and Values – making sure employees understand the behaviors expected from them so that there is a shared sense of responsibility.

While it can be a challenge to get employees excited and working together in support of a transformational strategy, Pickup stressed that it can lead to positive outcomes for long-term success.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Panel Discussion on Food Safety

Taiwan’s food-related scandals in recent years have aroused public attention regarding the safety and reliability of the food supply. In an effort to provide a communication platform to enhance understanding of food safety laws and regulations, AmCham Taipei’s Retail Committee conducted a Chinese-language Food Safety Forum at The Sherwood Taipei on October 17. The event was sponsored by Pfizer Ltd.

The following guest speakers were invited to share office practices and discuss strategies for increasing the international competitiveness of Taiwan’s food industry:

  • Fu Hsu, Director of the Food Safety Office of the Executive Yuan
  • Mark Petry, Chief of the Agricultural Section of the American Institute in Taiwan
  • Jenny Yueh-Ing Chang, Executive Director of the International Life Sciences Institute

From left to right: Mark Petry, Chief of the Agricultural Section of the American Institute in Taiwan, Jenny Yueh-Ing Chang, Executive Director of the International Life Sciences Institute, Fu Hsu, Director of the Food Safety Office of the Executive Yuan, and Moderator Lucy Sun Hwang, Distinguished Professor in the Food Science and Technology Department at National Taiwan University.

The speakers addressed topics covering 1) policy development and coordination for food safety systems, 2) risk assessment and management, 3) preventative controls, and 4) crisis management. Through case sharing and discussions, the seminar aimed to provide participants with a more comprehensive understanding of domestic and international food-safety practices.

Following the session, Moderator Lucy Sun Hwang, Distinguished Professor in the Food Science and Technology Department at National Taiwan University, gave attendees a chance to raise questions to the panel.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Annual CSR Forum Focuses on the Circular Economy

The AmCham Taipei CSR Committee held a forum entitled, “The New Concept of a Circular Economy – Creating a Future of Zero Waste” on September 28 at the Grand Hyatt Taipei. The speakers were Vivian Tai, Dell’s regional senior manager for Environmental Affairs & Producer Responsibility; Gaven Chang, assistant general manager at PwC Taiwan in charge of sustainable development service; and Chen Kuang-hsi, senior manager for research at the Taiwan Cement Corp. The event was conducted in Chinese language.

Tai explained how Dell in recent years has spared no effort to promote a “closed loop” program to channel waste materials back into the production cycle to contribute to solving the serious problem posed by waste electrical and electronic products (WEEE). Dell last year was able to use over 50 million pounds of recovered materials in its production of personal computers, four years ahead of schedule, and has raised the target to 100 million pounds by 2020.

The company also aims to lift the share of recovered plastics from the current 11.7% of the total to 35%, and to utilize only recyclable materials in its packaging. An example is its use of bamboo and wheat stalks as packaging materials on the Chinese market.

Without sacrificing quality and durability, said Tai, Dell has expanded application of the “closed loop” program to 91 product lines. It uses recovered materials not only from its own waste products but also from external sources, such as recovered plastics provided by a treatment plant of the Wistron Corp. in China, as well as plastics collected by the NGO Goodwill Industries from 2,000 recycling stations throughout the United States.

Tai noted that the program starts from product design. Incorporating a modular product structure facilitates the removal and replacement of defective parts.

Looking ahead, Dell plans to expand both the volume of recovered materials and the scope, extending the process to include such materials as precious metals, which are used heavily in electronic products, and carbon fiber.

“Promoting the circular economy by increasing the use of recovered materials is an inevitable trend,” said Tai. “IT firms bear the largest responsibility, since they are the largest source of industrial waste materials. The volume of waste electric and electronic products is expected to exceed 50 million tons this year.”

Concurring regarding the inevitability of the circular economy, Gaven Chang of PwC Taiwan noted that “at the current rate of exploitation of natural resources,” by 2030 “we will need two earths.” A conspicuous example of wastefulness is the mobile phone. Consumers typically buy a new one every two years, the main reason for the staggering number of 30-50 million waste mobile phones worldwide per year.

Due largely to the huge and growing demand from China, international prices of raw materials have been rising at an annual clip of 30% since 2000, compared with 15-20% previously, said Chang. He cited the Ellen MacArthur Foundation’s definition of the circular economy: “Looking beyond the current ‘take, make, and dispose’ extractive industrial model, the circular economy is restorative and regenerative by design. Relying on system-wide innovation, it aims to redefine products and services to design waste out, while minimizing negative impacts. The circular economy is a continuous, positive development cycle.”

Chang said the circular economy will bring a number of new business models, including the renovation and reuse of waste products, recycling of waste materials, leasing instead of purchasing, and the sharing of products and services. Suppliers will stress the durability of products, making them suitable for lease over a long period of time, and consumers will stress the enjoyment, rather than the ownership, of products and services.

The trend will have a profound influence on industrial design, which will emphasize modular structure and the employment of single materials for easy dismantling/ repair/replacement and recycling.

The circular economy has also been gaining acceptance in recent years in heavy industries such as cement and steelmaking that have been under the close scrutiny of environmentalists. Under the concept of “environmental protection is a responsibility, not a cost, Taiwan Cement, for instance, has been promoting the recycling and reuse of waste since 1990,” said Chen Kuang-hsi.

A key item is full utilization of after-heat at cement kilns for power generation and incineration of household and industrial wastes. “Power generated by after-heat now supplies one-third of the power consumption at our kilns,” he said. “Moreover, the after-heat, at 1,000-1,400 degrees Celsius, can incinerate waste entirely, without producing bottom ashes, a serious problem in the case of incinerators. Bottom ashes, which contain dioxin, have to be solidified first to stabilize their properties before being buried at landfill sites. Many of those sites have been almost filled to the brim, as one ton of bottom ashes can be enlarged to 50 tons in weight after solidification.”

Chen noted that many hi-tech firms, including Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC), have entrusted Taiwan Cement to incinerate their industrial wastes.

In cooperation with the Industry Technology Research Institute (ITRI), the company has also installed a system capturing CO2 emitted from its chimneys, with limestone as the CO2 absorption agent. The limestone with CO2 is then used in nurturing microalgae.

From left to right: CSR Committee Co-chair Fupei Wang, Managing Director at Ogilvy PR; Jessie Chuang, Communications Manager, Corporate Affairs & Communications at JTI; Gaven Chang, Assistant General Manager at PwC Taiwan; Andrea Wu, AmCham Taipei President; Vivian Tai, Regional Senior Manager for Environmental Affairs & Producer Responsibility at Dell; and Chen Kuang-hsi, Senior Manager for research at the Taiwan Cement Corp.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.