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CHAPTER 3. MOTIVATION APPLICATION
This research work is part of a larger research project dubbed “Prosperity Taiwan”. The main goal of “Prosperity Taiwan” is to create a set of IT-enabled policies and workflows that aids Taiwan’s economic transformation.
3.1 Taiwan’s Economic Strengths and Current Economic Landscape
As one of the Four Asian Tigers, Taiwan’s economic growth from 1960s to 1990s has been exceptional, maintaining at a growth rate excess of 7% per year. Taiwan’s economic strength stems from its manufacturing capabilities, especially in terms of information technology related products. Bulk of Taiwan’s business comes from building and manufacturing white-label products that is later branded with American or European brands.
However, Taiwan’s greatest economic strength turns out to be its biggest liability in recent years due to changes in the global economic landscape.
The present global economic landscape presents several challenges for the Taiwanese economy: increase in cheaper manufacturing alternatives such as manufacturers from China or Brazil. This leads to increased price competition, severely cutting profit margins for Taiwanese manufacturers. There is also an increased premium placed on brand recognition and intellectual property; despite Taiwanese’s manufacturing prowess when it comes to building world class hardware such as iPhone, iPods and other globally recognized devices, Taiwanese manufacturers often receive up to only 3 to 5% of the profit share of each device sold. This is because the Taiwanese manufacturers do not own the brand and or intellectual property of the device.
In response to the above challenges, the Taiwanese government highlighted several industries poised for growth including medical services, bio-technology, green energy,
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culture/arts/creativity and high technology agricultural.
3.2 The “Prosperity” in Prosperity Taiwan
Prosperity comes in various forms. While most people associate “Prosperity” with material wealth, we are interested in creating all-round prosperity. They are namely: Material Prosperity, Spiritual Prosperity, Physical Prosperity and Social Prosperity.
3.3 Vision of Prosperity Taiwan
The vision for Prosperity Taiwan is to create sustainability in economic development by moving up the value chain. The five major goals are as follows:
1. Enhance university-industrial cooperation
2. Kick start Taiwan’s economic transformation by creating “industrial modules”
3. Create a model for industry transformation 4. Start small, go big
5. Internationalize based on successful industrial transformation
3.4 Culture, Arts and Creativity as an Example
For a start, Prosperity Taiwan focuses on the culture/arts/creativity industry. The research team believes that the culture/arts/creativity is Taiwan’s sweet spot due to Taiwan’s unique heritage and mix of Chinese and Western influences. We also believe that this group of people and its related stakeholders will benefit most from our research work.
We find that the following characteristics define the culture, arts and creativity industry:
o Not limited liability or private limited companies
o They have limited ability to scale its production capabilities
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o Typically lack financial support or lack knowledge on funding options
o Business owners are at best conservative regarding the growth prospects of the culture and arts
On an industry level, the market exhibits the following characteristics:
o Market lacks a system for evaluating intangible assets o Industry lacks interdisciplinary talent
o Lack of financial support or lack transparency in terms of funding options o The industry lacks economies of scale to support growth
o Multiple stakeholders with political, economical, social and environmental objectives.
To combat the above issues, we propose the use of intelligent service machines to aid industry transformation.
3.5 Intelligent Service Machines to aid Economic Transformation
Intelligent Service Machine(s) (Tung and Yuan, 2010) refers to an intelligent design of the service machine featuring the embodied cognition of co-production in terms of modeling and automating the cognitive process and knowledge representations as required. Conceptually, a simple service machine is a socio-technical system (STS) that comprises of people, model, architecture, technologies for modeling and automating service processes.
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Figure 3.1 A simple service machine is a hybrid of STS and SSME
3.6 The V+ Platform
The V+ platform (Figure 3.2) is an intelligent service machine that comprises of 5 simple service engines aimed at solving problems of industry transformation as exemplified in the independent movie makers and the industry as a whole.
Figure 3.2 The V+ Platform
a macro-level, we have Capital+ forming the base of the V+ platform, since every stage of a product life cycle in various industries will most likely involve some form of funding activities. On top of Capital+, Next, we have Discover+ which helps businesses discover new insights, which can be further strengthened or extended by the design insight patterns recommended by Design Intelligence+. Finally, Sourcing+ can readily translate design insights into market opportunities by bringing about various operant resources from possible
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stakeholders in an industry under a holistic system thinking view. Finally, Intellectual Property (IP+) comes into play by ensuring that proper IP strategies can be formed based on the operant resources identified in Sourcing+.
On a micro-level, each engine works as such:
• Capital+ - designed to solve the problem of funding and investment on an individual level and the industry as a whole. It provides a prediction model for individuals to estimate which investor(s) has a higher possibility of funding them. In addition, Capital+ provides general industry growth models based on the evolution of investors and companies within an industry.
• Discover+ - an IT-artifact with common sense knowledge aimed to facilitate design insight discovery process. The common sense knowledge in this engine is powered by ConceptNet. Discover+ is targeted at assisting novice and enterprise designers with only the goods-dominant logic mindsets.
• Design Intelligence+ - is developing the framework and method to externalize, formalize and facilitate “insight combination” that is a process of discovering connection between “insights” and “design patterns” and combining them to generate idea or inspiration for service design.
• Sourcing+ - a service machine targeted at Small and Medium Sized enterprises (SMEs) to enable them to discover niche markets as stipulated in the Long Tail Theory when given design insights. Sourcing+ is also an IT-enabled system that exploits open new operant sources from various stakeholders to provide discovery of market opportunities found in the Long Tail.
• Intellectual Property+- aims at fostering the use of intellectual property as a means for moving up the value chain either through forging alliances or as a litigation/patent strategy according to the identified operant resources by Sourcing+. It provides a
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framework based on value network that help companies to pursue, manage and maneuver their IP strategy.
V+ platform is designed to act as a generic service engine that can be applied to most situations. For simplicity and demonstration sake, we explain an application scenario of how V+ platform can be applied in the next section.
3.7 Application Scenario of V+ platform
Consider the various issues ranging from political, economical, environmental and social factors when a company or business sets up a factory in a less developed region. Very often, the company may face protests from local residents or even local governments due to concerns over environmental pollution, negative impact on way of life of local residents or even adverse effect on the local economy. The V+ platform works by helping various stakeholders search and suggest possible solutions to this problem. Let us assume that the agreed solution is to create a museum to educate the general public on environmental protection.
In this scenario, we are expecting multiple stakeholders and not all funding for building the museum will come from the company. Therefore, V+ platform can help to source for multiple investors based on the stakeholders involved. This can happen at various stages of the construction of the museum. The main engine used for sourcing investment is done via Capital+.
Discover+ creates new insights based on the stakeholders’ objectives. These stakeholders include the local residents, governments, potential visitors to the museum and the company involved. After gathering the stakeholders’ requirements, these requirements are used as inputs for the Discover+ engine, where new and potential insights maybe created for framing and reframing process. Such information is useful for museum designers or related
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service designers. The output of Discover+ is then used as an input for Sourcing+. Design Intelligence+ then helps elevate the insights to foster the degree of impacts in terms of the scalability of stakeholders involved or the service values incurred.
Sourcing+ analyzes the insights provided by Discover+ and maps out possible required market intelligence and or related trends. For example, what can one expect from a museum?
What form of services, artifacts, displays, etc. can one expect from a museum given various stakeholders? Sourcing+ helps answer these questions by integrating current trends and expectations, such as screening documentaries or educational movies on environmental protection, interactive learning for children and so on as inputs for market sensing. The market sensing capabilities of Sourcing+ then facilitates research between various stakeholders and generates possible answers to aforementioned questions.
Intellectual Property+ adds support to our scenario by providing IT-enabled support for understanding the overall patent value based on the operant resources identified by Sourcing+.
Take for instance, the museum might be interested in deploying an operant resource of interactive TV. The related technologies and hence patents may be related to such as those used in Microsoft’s Kinect. Such knowledge will help potential implementation avoid litigation and hence pave the overall patent/litigation strategy.
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