Electronic Business in Taiwan 劉桂琳 Maggie Liou 行政院產業自動化及電子化推動小組 iAeB Program Office July 26, 2000

Contents The Status of Internet Infrastructure The Status of Internet Commerce Government Policies to Expand e-Business Government Activities Private Sector Activities Summary

The Status of Internet Infrastructure NII Growth in Internet Use Network Construction Legal Environment Improvement Internet Applications 6.4 million Internet users 3 million packed-mode Internet users by laws were amended Education, Content, e-Government, EC

THE TOP TEN COUNTRIES WITH THE MOST INTERNET HOSTS US Japan United Kingdom Germany Canada Australia Taiwan Netherlands France Italy Ranks seventh in the world 2,636,541 1,901,812 1,702,4861,669,664 1,090, , ,944779, ,307 Source: Network Wizards, Jan 2000 Complied by : FIND/ITPD, III NII project, sponsored by DOIT, MOEA 10,490,416

Status of Private Sector Company E-Commerce Use in APEC Economies In 2000, 45% of the companies in Taiwan will engage in B-to-B e-commerce. In 2002, EC market value of Taiwan will exceed US$327 million.

The Forecast of B2B Solution Market of Taiwan (e) 2001(e) 2002(e) Unit: US$1M CAGR=68% Source : MIC Institute for Information Industry, Taiwan

The Forecast of B2B ASP Market of Taiwan (e) 2001(e) 2002(e) Unit: US$1M CAGR= 80% Source : MIC

The Scope of iAeB Program iAeB Program Pilot Project for IT Industry Pilot Project for IT Industry Finance & Security (MOF) Commerce (Commerce Dep./MOEA) Manufacturi ng Industry (IDB/MOEA) Agriculture (The Council of Agriculture) Construction Industry (BOC /MOI) Government Procurement (Public Construction commission)

Goal of iAeB Program Promote 50,000 enterprises, 200 supply chain systems (80% are SMEs) all deploy in depth B2B e-Commerce applications. Aim at target industries to develop production, warehousing, distribution and selling modules, and to build 40 model sites. Involve manufacturing, commerce, banking, securities, agriculture and construction engineering to help 2,000 companies to build up their enterprise-wide industrial automation capability. Government help the industry to set the industrial supply chain standard to solve the problem of data exchange and collaboration among the business entities.

IT Industry The Government is promoting the e- Business environment by executing Type A project Type B project

IT Industry (Type A Project) MOEA invests US$10 million to support IBM,Compaq & HP to introduce their EB process and procurement into Taiwan market. IBM:L ead its twenty leading Taiwanese suppliers to set up a electronic procurement operation center in Taiwan. Compaq :Integrate fifteen local leading suppliers to introduce the electronic procurement system and also carry out a supply chain system. HP: Integrate 12 major local subcontractors to implement e-procurement system.

IT Industry (Type B Project) MOEA invests US$12 million to support fifteen local leading PC companies such as Acer, Mitac, ADI … etc. to broadcast e-Business process to their subcontractors. 15 of 21 proposals from 26 major manufactures and suppliers were passed in the end of June this year. The investment on 24 Type A & B projects exceeds 3 billions, leading ASP development. After Type A & B projects are finished, the estimated e-Procurement volume will exceed 100 billions.

Manufacturing Industry Metal Industry Machinery Industry Transportation Industry Electronic & Electric Industry Petrochemical Industry Particular Chemistry Industry Commonly Chemistry Industry Textile Industry Food Industry Paper Automobile The green-colored have higher priority …..

Manufacturing Industry(cont.) Goal: To promote at least 70 supply chains in manufacturing sector and 5,000 businesses to establish e-commerce capability. To maintain the competitive capability for traditional industry. With the annual budget of US$10M, IDB supported 12 leading companies of chemical, textile, automobile to integrate EB-oriented supply chain and ERP system. SME Administration will invest US$170M to build up ASP mechanism to help 20,000 SMEs from 2000 to 2004.

Commerce e-Business Project To integrate storage, transportation, selling systems to set up the distribution chain. To assist 20,000 enterprises(80% SMEs) to implement EC and build up 100 distribution chains. To select consumer Content-based industries (book and audiovisual entertainment product), Retail and Consumer Products (3C, food, medicine and cosmetics) and Service industries (garment, travel agency) apparel as the pilot lines to implement EC.

Other e-Business Projects Agriculture- To introduce the EC/EB applications to develop high-tech agriculture. Finance- To help the banks to develop B2B EC financing service application to support the transactions on internet. Civil Engineering- To assist construction industry to apply the EC/EB applications to integrate design, engineering and management.

Government Activities-Key Initiatives Tax Law & Industry Measurement Human Incentives & Standard Preferential Regulation -ization Matrix Resource Loan Effort

Tax & Loan Investment in EC/EB and automation may receive the tax deduction up to the 20% of the investment The purchasing of EC/EB and automation equipment will be eligible for preferential loan from government supported fund

Standardization efforts in Taiwan IT industries: Supporting XML Technology and implement interoperable eCommerce system, such as cross industry initiatives: ebXML and Vertical initiatives: RosettaNet. Electronic Component industries : Recommend RN ECTD and PIP3A4 (order management process) be used in e-Stock system. Semiconductor Manufacture industries : Participate RN EC Board recently to develop PIPs for Semiconductor Manufacturing process.

Measurement Matrix Surveying the industries to establish EB Performance Indices(Inventory Turnover Rate, e-Procurement Ratio, Delivery Ratio, Reduction of Procurement Labor, Reduction of Procurement Processing Time, etc.) to evaluate the iAeB Program. The first vision of EB White Paper has been released in May 2000.

Private Sector Activities Foreign giant enterprise(IBM, Compaq, GE, … ) allied with local suppliers to build up global production center. To serve the SMEs in EC, ASP and PSP boom rapidly. A dozen of ASP joined the local market within these 6 months.

Summary & Issues Taiwan ’ s leading industries have already globalized, EB/EC will enhance their competitive capability in the future. For B2B EC, the industrial standard is the key successful factor. Industries have to adopt the international stand or develop their own standards to integrate the supply chains.

Thank you!