Further strengthening Taiwan’s position as a key player in the global supply chain for technology-enabling, value-added products and services, through well-coordinated speedy joint efforts across all ministries for the adoption of new digital economy to achieve industrial advancement and economy transformation.
Technologies are the fruits of innovation and the locomotive of economic advancement. They have helped mankind solve many critical issues related to social wellbeing, enhance the efficiency of everyday lives, and improve organizational effectiveness. The rapid development in such areas as super computing power and artificial intelligence is transforming our daily life, social structures, and government operations, as well as triggering the next industrial revolution.
Taiwan offers a strong technology infrastructure, excellent engineering talent, solid intellectual property protection, and a central location in Asia. To make the best use of these advantages and catch the next wave of technology advancement, it is vitally important for the government to gather resources across all ministries to create an optimum ecosystem. Such an ecosystem should be conducive to the incubation, development, protection, and speedy commercialization of core new technologies. It should help to drive the next wave of Taiwan’s economic growth.
The Committee appreciates the government’s continuous efforts to seek to improve Taiwan’s regulatory environment to cope with changes in society and the economy. We are concerned, however, that the scope and speed of the progress may not be keeping up with the rapid pace of change. We urge the government to create a forward-looking regulatory infrastructure suitable for the digital age.
Suggestion 1: Build a sound data-governance infrastructure to unleash the potential of the data economy.
1.1 Classify government data according to security and confidentiality levels.Today’s most exciting technologies and associated innovations are built into and powered by cloud services. Throughout the world, businesses, educational institutions, and NGOs are increasingly adopting cloud services in order to reap advantages in terms of cost savings, efficiency, and innovation. The challenge to governments is how to adopt and promote the use of innovative technologies to remain globally competitive. According to the research firm Gartner, the primary reason for governments’ hesitation to adopt cloud services is concern about security. In many countries, a clear classification of government data in terms of security priority has been developed to enable government agencies to embrace the advantage of cloud services.
The newly promulgated “Regulations for Classification of Cybersecurity Responsibility” classifies government agencies into different levels – from level A to level E – with level A having the highest responsibility regarding cybersecurity. We propose that the government take a similar approach toward government data, classifying it by means of levels of security and confidentiality. The basic legal infrastructure thus created for government agencies will enable them to leverage the advantages of the cloud and make the best use of their data in providing innovative government services.
1.2 Limit unnecessary data localization. The increasing development of the internet as a platform has brought significant benefits to international trade and other business activities. In particular, the capacity to transfer data efficiently has reduced transaction costs and enhanced the real-time management of resources. Unnecessary data localization or data nationalism may hinder a country’s economic development.
However, Article 21 of the Executive Yuan’s draft Digital Communications Act, proposed in 2017, stipulates that “digital service providers, for users located within the territory, shall not irregularly bypass facilities located within the territory to transmit, receive, process or store user-related digital information.” Strict interpretation of this article may create a data-localization burden for foreign service-providers. Moreover, the terminology “irregularly bypass” is so vague that it raises concerns regarding its constitutionality.
The Committee supports agreements on digital trade that facilitate the cross-border flow of data and limit data-localization requirements. We urge incorporation in the draft of a more specific definition of “irregularly bypass,” so as not to place an undue burden on foreign service-providers who lawfully operate businesses in Taiwan.
Classify the data owned and managed by the government.We urge the government to classify government data, allowing greater access to cloud service by the public sector.
Specify a clearer scope for Article 21 in the Digital Communication Act draft.We urge the government and individual legislators who support this bill to drop Article 21 or else clearly define the term “irregularly bypass” to prevent undesirable effects of data localization or data nationalism.
Suggestion 2: Include major violations of the Trade Secrets Act in prosecutors’ and judges’ guidelines for serious criminal cases.
Trade secrets are recognized as extremely valuable assets that are vulnerable to theft, especially in high-tech industries. Frequent incidents of trade secrets that are stolen and taken overseas could throw the future of Taiwan’s economic competitiveness into serious question. To address this concern, effective and timely law enforcement is crucial to deter possible trade secrets cases.
The Ministry of Justice Investigation Bureau (MJIB) has listed major violations of Trade Secrets Act (namely Article 13-1 and 13-2) in its “Directions for Determining Serious Economic Criminal Cases.” While the Committee appreciates MJIB’s efforts to prioritize its investigations of trade secrets poaching, we urge the Prosecuting Authority and Judicial Branch to take the same approach. We join with the Intellectual Property & Licensing Committee in calling for the “Guidelines for Handling Serious Economic Criminal Cases by the Prosecution Authority” and the “Guidelines for Speedy Trial and Decisions in Serious Criminal Cases in Court” to explicitly include major trade-secrets violations.
The Committee firmly believes that the law-enforcement system for trade-secrets cases will be greatly strengthened if harmonized practices to prioritize and incentivize the handling of such cases can be applied across the stages of investigation, prosecution, and trial.
Suggestion 3: Build a comprehensive startup ecosystem to incubate contributors to the next wave of Taiwan’s economy growth.
A solid startup community is essential to drive Taiwan’s next wave of economic growth. The Committee therefore encourages the government to continue its efforts to build a comprehensive startup ecosystem by deregulating its labor policies, accelerating plans to develop a bilingual nation, and adopting a generally open regulatory approach that avoids being overly protective. Taiwan is competing in this regard with other regional hubs such as Singapore and South Korea. To attract foreign and local startups to Taiwan, the government needs to provide a clear set of incentives to early-stage startups engaged in innovative businesses that will spur the development of the new economy. Here are some examples of how Taiwan can improve its general friendliness toward startups:
a. Relax the revenue requirement imposed on startups for hiring foreign professionals. Under the current regulations governing the hiring of foreigners, an entity with foreign investment that wishes to hire a foreigner as a manager or executive officer is required (i) to have paid-in capital or operating funds in Taiwan of more than NT$500,000, and (ii) earn sales revenue of more than NT$3 million a year, have an import/export amount of more than US$500,000, or receive commission of more than US$200,000. Even more severe restrictions apply if a company wants to hire a foreigner as a technical specialist, hire more than one foreign citizen, or renew its foreign citizens’ work permits when they expire. It would be unrealistic to expect a technology startup to achieve any sales revenue in its first few years, as its primary goal is to invest in R&D, which may not bring any return for some years. Yet it is critical for a technology startup to be able to benefit from foreign professionals’ skills and experiences in their respective practice areas.
Restrictions on fixed-term labor contracts also need to be relaxed. The Labor Standards Act permits an employer and employee to enter into a fixed-term labor contract only under very limited conditions. This policy creates hurdles for a technology startup, especially in its early stage when it needs flexibility to adjust the size of its workforce depending on the progress of its R&D development, which is very difficult to predict.
b. Increase access to funding by attracting more VCs to Taiwan. While Taiwan has approximately 200 venture capital companies investing in diverse industries, most of them invest in “established” companies rather than early-stage (pre-seed, seed, and Round A) startups. Taiwan’s National Development Council has taken an important step by investing US$83 million in four different VC firms to encourage them to invest in local startups. To further spur innovation, we recommend that the scope of such investment targets be broadened to include foreign startups that have solutions applicable for Taiwan. In addition, we urge the Taiwan government to incentivize international VCs to open branches in Taiwan, as well as to encourage local VCs to engage in more early-stage investments through tax incentives and relaxing the currently existing grant restrictions.
c. Ease tax pressures.Companies often face intense scrutiny from the local tax office if they do not show a minimum profit on their tax returns, but technology startups’ business plans frequently aim to reach profitability only after a lengthy period of R&D, product development, and market penetration. The absence of profit during the first few years may be completely consistent with management’s objectives for the company, rather than a sign of tax evasion.
The Committee believes that the above measures would help foster an active ecosystem for innovation and encourage both foreign and local startups and entrepreneurs to establish operations in Taiwan.
Suggestion 4: Adopt policy measures and establish a high-level cross-ministerial working group to prepare for a future driven by new technologies.
Society is about to enter a bold new phase sparked by groundbreaking new technologies. Artificial intelligence (AI), big data, machine learning (ML), virtual and augmented reality (VR and AR), and cloud computing have the potential to solve some of humanity’s largest problems, leading to a new era of prosperity.
We have outlined two sets of public policies to help prepare for the transition to that future society. In addition, we encourage the government to establish a high-level cross-ministerial working group to oversee the opportunities and challenges driven by new technologies. The overall aim is to provide Taiwan with a sound policy environment to foster both economic growth and citizens’ welfare.
a. Preserve trust in the technologies that drive advancements.Governments need to adopt appropriate data-safeguard policies to address privacy and security concerns while providing legal certainty for businesses. The following approaches are recommended:
Promote data privacy and cybersecurity through voluntary conformance with open global standards. Adopt industry-leading security practices to safeguard data.
To the extent that is politically feasible for Taiwan, resolve any conflicts of law or jurisdiction caused by different approaches to cybersecurity and data privacy by means of standardized agreements among governments.
Support transparency and data-governance policies that will help people understand how an AI system came to a given conclusion or recommendation. Companies must be able to explain what went into their algorithm’s recommendations.
b. Support workforce readiness policies.To prepare students, education systems, workers, and businesses for the significant transformations that can be expected by 2030, governments can best assist by:
Revisiting workforce policies and labor regulations that are fundamental to prepare the workforce for the future of work.
Emphasizing STEM disciplines, critical thinking, communication skills, and digital literacy in public education and training programs.
Using data analytics, VR, and AR to personalize and enhance learning with immersive content delivery.
Suggestion 5: Collaborate with stakeholders to seek appropriate solutions to disinformation in accordance with the principles of protecting free speech and due process of law.
Disinformation has been a heated issue closely watched by the Taiwan government. Since December 2018, the Executive Yuan has proposed multiple bills to deter people from fabricating and disseminating unlawful false speech by strengthening the criminality of false information and its punishment under existing laws. The Executive Yuan has also considered amending the draft Digital Communications Act to require digital communication platforms or social media to review user reports of disinformation and remove such items without prior consideration by the courts.
We are deeply concerned that the Taiwan government has considered legislative actions without paying sufficient attention to the complexities involved in the phenomenon of disinformation. We refer the authorities to the Manila Principles on Intermediary Liability, a set of guidelines on censorship and take-down laws established by an international consortium of NGOs in 2015 and widely accepted as a global standard. The second principle clearly states that intermediaries must not be required to restrict content unless an order has been issued by an independent and impartial judicial authority that has determined that the material at issue to be unlawful. To be consistent with international principles protecting freedom of speech and access to information, we urge the government and the Legislative Yuan not to place unreasonable obligations on digital platforms that may abridge freedom of speech and contravene the due process of law.
In democratic societies such as Taiwan, a comprehensive program to elevate the public’s media literacy is still the most effective means of combating disinformation. Toward that objective, several fact-checking organizations have begun to collaborate with companies in the digital industry. Social media and digital platforms in Taiwan have also been developing relevant policies and self-regulation measures to guard against the dissemination of disinformation and the harm it causes in society.
Respect fundamental democratic values when tackling the problem of disinformation. Combating disinformation is a crucial but highly sensitive issue. We urge the Taiwan government to engage in comprehensive consultation with all relevant parties to find solutions that are feasible, effective, and in line with the basic democratic principles of freedom of expression and due process of law.
Elevate the level of media literacy and foster a self-regulation platform. The ultimate solution for combating disinformation is raising the public’s media literacy. We urge the government to promote programs to enhance citizens’ ability to distinguish between real and fake information. Encouraging digital platforms to implement self-regulation measures should also be among the government’s policy priorities.
台灣約有兩百家投資於各行各業的創投業者，多數都是投資於「根基穩固」的公司，而非投資於早期新創公司（種子前、種子和 A 輪）。台灣國家發展委員會已採取重要措施，投資8,300萬美元於四家創投公司，用於投資本地新創公司。我們建議透過適用於台灣的解決方案，放寬此類投資範圍並納入外國新創公司，以刺激創新。我們還敦促台灣政府獎勵國際創投公司在台灣開設分支機構，並藉由稅收優惠和放寬現有放款限制，以鼓勵本地創投公司進行更多的早期投資。
台灣政府僅片面地考慮採取立法措施對抗假訊息的行動，而未充分留意假訊息現象所涉及問題的複雜性，十分令人憂心。我們籲請當局參酌《馬尼拉仲介方責任原則》（Manila Principles on Intermediary Liability）；該原則係由一群國際非營利組織於2015年所建立關於言論內容審查與下架法規之指引，並廣被接受的國際標準。該原則第二點明確規定，除非獨立、公正的司法機關發佈命令，認定所涉內容非法，否則不得要求仲介方限制用戶內容。為求符合保護言論自由和資訊存取的國際原則標準，我們強烈建議台灣政府和立法機構勿向數位平台施加諸如侵害言論自由以及與正當法律程序相抵觸的不合理義務。