Historical Perspective
5.3 Demand side of ICT .1 The infrastructure of ICT
5.3.1.1 Internet Services
“Challenge 2008 – National Development Plan” was launched in 2002, by means of strategic actions of e-government, e-industry, and internet society, and which were enlarged through informational applications for each department and informational education training. Those above had great help in improving the information environment and web services in Taiwan. Internet services could be divided into three parts: government, business and personnel. The important
Figure 5.2: Value-added in Manufacturing Industry 1991-2003
26.05
23.88 36.78 30.34 36.12
36.91
20.00 23.00 26.00 29.00 32.00 35.00 38.00
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
％
TW KR JP
FI US UK
Source:1. OECD, STAN Database, August 2005; 2. DGBAS, National Income in Taiwan Area of Republic of China 1981-2004; 3. MOEA, Industrial Survey
& Statistics Yearbook, 1990-2004; 4. TIER (2005).
Figure 5.3: Value-added in the ICT Industry 1991-2003
24.96 25.59 36.85 41.60 45.26
32.44
20.00 25.00 30.00 35.00 40.00 45.00 50.00
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
％ TW KR JP
FI US UK
Source:1. OECD, STAN Database, August 2005.
2. DGBAS, National Income in Taiwan Area of Republic of China 1981-2004.
3 .MOEA, Industrial Survey & Statistics Yearbook, 1990-2004.
achievements included setting up a government service web (GSN), a government certification mechanism, an official e-document exchange, an e-government service platform, e-government portal, governmental website contents, thousands of official application forms, and several new government e-services including G2G, G2B and G2C. Although the internet services and applications in enterprise were mainly supported by business itself, the government also provides essential support, including “Projects A, B, C, D, and E”; “Demonstrated IT Application Research Program”, and “Technology Research Program for Innovative Services”. Most of the support by government involved integrating standards from industries, developing job application platforms, and setting demonstrative applications, which amplified the leverage effects for industry.
Figure 5.4: Strategic Framework for National e-Competitiveness
5.3.1.2 Broadband Infrastructure
Broadband construction in Taiwan is divided into fixed line and wireless. For the fixed line, the main development plan is the “6 million broadband users” of e-Taiwan. The annual goals of this plan are set out in Table 5.4.
Table 5.4: The planning of Internet Construction in Taiwan, 2002-07
2002 2003 2004 2005 2006 2007 North-South Basebone for Island wide (Gbps) 850 950 1050 1150 1200 1250 International connection cable (Gbps) 150 200 200 200 250 250 FTTC fixed line area fibre coverage rate (%) 82.0 85.5 88.5 91.0 93.0 95.0 Broadband subscribers (10 thousand) 205 300 380 460 530 600 Source: Fan (2005)
In order to promote the application and development of wireless broadband, the 2nd stage (five-year plan) of the “National Science and Technology Program for Telecommunications” provided by NSC and the “M-Taiwan Plan” proposed by the MOEA, the government might provide help. NSC expect to develop new relevant techniques by 2008, by doing so, the users could surf among WLAN, GPRS and 3G; it could let at least 600,000 people have the convenience of internet surfing and of using web phones to connect in an environment of wireless networking. Besides, the goal of the
“M-Taiwan Program” was to promote a ubiquitous network and e-services in Taiwan (Appendix 6).
5.3.1.3 Information and telecommunication security
In January 2001, the Executive Yuan set up the Contingency Centre of National Information and Communication which is in charge of ICT infrastructure security and passed the "National Information and Communication Infrastructure Security Mechanism Plan". Besides, the plan of “6 million broadband users” has a subordinate plan, “Setting up an ICT security environment”. The government still activated other information security programmes:
1. Public Key Infrastructure（PKI): set up a “Promotion Task Force” to promote a citizen’s digital certificate program, corporation certificate program, medical certificate program, etc.
2. planned and set up government information exchange safety standards 3. implemented related laws
4. information safety technique research
According to the data collected (see Table 5.5), Taiwan showed an outstanding performance in some indexes, such as Internet users, hosts, bandwidth, and Mobile Internet subscribers.
Figure 5.5: Top 15 Networked Readiness Index Rankings 2005
Source: WEF (GITR 2005-2006), Compiled by III-IDEAS-FIND 2.02 1.89
1.8 1.78 1.72
1.54 1.49 1.48 1.44 1.44 1.39 1.33 1.31 1.28
1.51
0 0.5 1 1.5 2 2.5
USA Singapore
Den mark
Iceland Finland
Canada Taiwan
Sweden Switzer
land UK
Hong Kong Netherlands
Norway South Kor
ea Australia
Score
Table 5.5: E-Infrastructure Index
Category Index Scale Data type Source Taiwan score
2003 2004 and application of technology
Internet users Nos. using
internet Statistics IDB 11.74 m 12.21 m Mobile
Internet hosts Computers directly
Statistics ITU US$ 8.83
(5th) US$ 7.93
minute Statistics ITU US$ 0.18 US$ 0.188
ICT expenditures
ICT intensity ICT expend. to
GDP Survey IDC n.a. 1.7% (30th)
production Survey MIC (III) US$ 4.69 b US$ 4.93 b Source: FIND website (2006)
5.3.2 The current status of the Information Society in Taiwan
Table 5.6: Status of Education, R&D, and Internet Application in Taiwan, 1996-2004
Unit 1996 1997 1998 1999 2000 2001 2002 2003 2004
Gross enrolment rate of higher education (18-21)
％ NA NA 56.1 31.0 68.4 77.1 83.4 90.2
---Literacy rate for over age 15
Note: 1. Broadband Internet users include xDSL, Cable Modem, Fixed Line with Fibre Connection 2. Mobile Internet users include WAP, GPRS, PHS or 3G
After cultivating IT for so many years, Taiwan has made great progress in informational social readiness, as shown in education, R&D quality and internet penetration rate (Table 5.6).
1. Education: In 1992, the gross enrolment rate in high education was 90.2% which was no worse than most developed countries, typically between 50% and 80%. In 2003, the literacy rate for those over 15 in Taiwan reached 97%.
2. R&D quality: In 2004, the number of researchers in Taiwan was about 169,000; annual papers in the SCI came to 12,939; annual papers in EI were 10,980; numbers of US patents (excluding
“New Design”) was 5,938; and R&D expenditure as a percentage of GDP (excluding defence) was 2.54 and rising.
3. Internet: the number of Taiwan’s internet users was 12.21 million in 2004; 54% of the Taiwan citizens had used the Internet, increasing by 2% compared with the previous year’s result of 52%. Taiwan’s home PC penetration rate increased slightly from 71% in 2003 to 73% in 2004.
According to III’s survey, in 2004, 61% of households in Taiwan have connected to the internet, and 78% of the online households use broadband internet connections. Broadband subscribers in Taiwan reached 3.57 million as of the end of 2004 (DSL subscribers 89% and Cable modem subscribers 11%). Besides DSL and Cable modem, there are 30,000 Leased-line and FTTx subscribers in Taiwan.
Table 5.7: Internet Connections of Taiwanese Homes, Business and Government, 2001-04
2001 2002 2003 2004 e-Government Government agencies broadband
penetration rate
─ 78% 100% 100%
Government agencies website penetration rate
─ --- 85% 85%
Government agencies online ─ 100% 100% 100%
e-Business Corporate broadband penetration rate ─ 80% 90% 96%
Corporate website penetration rate ─ 22% 27% 36%
Corporate Internet penetration rate 44% 62% 79% 81%
e-Home Home PC penetration rate ─ 72% 71% 73%
Home Internet Penetration rate 39% 53% 57% 61%
Home Broadband Penetration rate 40% 58% 73% 78%
Source: Ke, 2005:30
1. Home: In 2004, Taiwan’s home PC penetration rate in 2004 was 73%, internet use rate was 61%, of which 78% of users adopted broadband. Over 40% of families used broadband, and that was the important information channel for them. However, because of family incomes and living areas, the phenomenon of the digital divide still remained in the rural areas.
2. Business: In 2004, e-infrastructure in business also had a growing trend; the corporate internet penetration rate reached 81%, of which 96% used broadband (ADSL). The penetration rate of Taiwan’s e-commerce transactions in 2004 was 17.6%, increasing slightly compared with the previous year’s 15.1%. The penetration rates of businesses engaged in online sales and online purchasing were 7.6% and 12.2% respectively. The corporate online transaction values in 2004 amounted to NT$ 155.3 billion, increasing by nearly 20% compared with the previous year’s result of NT$ 131.5 billion. Overall, e-infrastructure for the whole of industry in Taiwan
reached world levels. Growth in internet penetration has been particularly high among large enterprises. However, the informational applications of SME showed declines, with the informational application gap compared with large enterprises widening (Figure 5.6).
Figure 5.6: Internet Penetration Rates of Taiwanese Enterprises
Source: III-ACI-IDEA-FIND (2005/9) 71%
87.40%
96.30%
76.50%
85.60%
96.20%
0%
20%
40%
60%
80%
100%
120%
Small Enterprises Medium Enterprises Large Enterprises
%
2004 2005
??/
3. Government: In 2003, both online government services and government agencies’ broadband penetration rates reached 100%, and Government agencies’ website penetration rate reached 85%. Objectively speaking, the profession of government e-services was outstanding.
5.3.4 The performance of the ICT industry (NSC 2005)
The World Economic Forum (WEF) published the Global Information Technology Report 2005-2006, in which Taiwan ranked 7th in the Networked Readiness Index (NRI) out of 115 economies, representing an impressive improvement over the 15th place ranking achieved in 2004.
In terms of all three dimensions, Taiwan ranked among the top ten worldwide, placed fifth for Usage Index, eighth for Readiness and tenth for Environment. Among the three main sub-indices covered in each dimension, Taiwan performed particularly well in Market Environment (3rd), Individual Readiness (4th) and Government Usage (4th). One mistake in the country profile for Taiwan has been confirmed by the WEF: The real ranking for the ‘Cable modem Internet subscribers’ variable for 2005-2006 should be 19th rather than 68th.
According to the “National Science and Technology Program Implementation Regulations” drafted and approved by NSC in 1998, as response to Taiwan’s major socioeconomic and employment needs, and in order to integrate up-, mid- and downstream R&D resources, there are three programmes related to ICT, respectively Telecommunications, Digital Archives, and e-Learning.
The National Sci-Tech Program for Telecommunications was being implemented during the years of 1998-2003 and 2004-2008 with total funding of NT$ 12.36 and 13.35 billion. Apart from the first phase’s areas of wireless communications and broadband internet, the second phase has added the category of application services in an effort to establish a full range of telecommunication systems technologies.
The National Sci-Tech Program for Digital Archives was being implemented during 2002-2005 with total funding of NT$ 2.78 billion. The primary goals of this programme contain the digitization of the nation’s important artifacts and collections, and the use of a national digital archive to promote cultural, social, industrial and economic development.
The National Sci-Tech Program for e-Learning is being implemented during 2003-2007 with total funding of NT$ 4.01 billion. The programme’s goals are to increase citizens’ opportunities for lifelong study, promote the development of e-learning industries, and encourage academic research on e-learning. This programme also emphasizes social goals such as the promotion of e-learning at the level of citizens and bridging the digital divide in Taiwan, as well as infrastructure support through the Network Science Park for e-learning.
Table 5.8: National Science and Technology Programmes related to ICT
Programme Fiscal Year Total Funding (NT$ 100m)
FY2004 Statutory Budget Number (NT$ 100m)
Telecommunications 1998-2003 123.6 20.2
2004-2008 133.5
Digital Archives 2002-2006 27.8 4.5
e-Learning 2003-2007 40.1 6.1
Source: 2005 Yearbook of Science and Technology, 2005: 25
Note: Total funding refers to the planned budget number after completion of project planning; annual budgets may be adjusted following review.
1) Information
The mobile computing age is predicted to have three major impacts: digital content will grow explosively and diversely; integrated digital convergence will enter into mainstream services;
services will continue to go online and become more user-friendly. These three trends will accelerate the development of user-friendly, smart, mobile and secure living environment technology. The development of various types of information, communications and video products will speed up the diffusion of the mobile computing age and user-centric applications and services.
Recent performance in relation to R&D project funding and manpower is set out in Figure 5.7.
Figure 5.7: Information R&D funding and manpower
Source: 2005 Yearbook of Science & Technology (NSC, 2005) Notes: Funiding is given as budget numbers.
1550.4
2000 2001 2002 2003 2004
0 Funding (NT$ Million) Manpower (Man-Year) Funding/Manpower
(NT$ Million)
Figure 5.8: Telecommunications R&D funding and manpower
Source: Source: 2005 Yearbook of Science & Technology (NSC, 2005) Notes: Funiding is given as budget numbers.
5.4
2000 2001 2002 2003 2004
0 0.5 1 1.5 2 Funding (NT$ Million) Manpower (Man-Year) Funding/Manpower
(NT$ Million)
2) Telecommunications
Society is expected to rely on broadband networks to sustain a thriving knowledge economy in the coming age of deregulation, globalization, and digitization. Besides maintaining a competitive telecommunications market and actively promoting the development of the broadband network infrastructure so as to develop a sound ICT development environment, the Taiwan government also aims to continue to pursue forward-looking telecommunications policies based on new ways of
thinking. It plans to promote the reform of existing controls, and intends to accelerate the integrated development of the telecom and broadcasting industries. In this way it is expected that Taiwan will be transformed into an internationally competitive high-tech island. Recent performance in relation to R&D project funding and manpower is set out in Figure 5.8.
3) Electronics
With support from the government, the nation’s semiconductor industry has achieved impressive results. Because the domestic electronics and information product industries have been able to obtain steady supply of key parts and components, Taiwan has become one of the world’s leading information product suppliers. However, in the face of stiff cost competition and increasing emphasis on capital investment, the domestic semiconductor industry must boost its core competitiveness in the future by focusing on emerging areas characterized by innovation and value creation. As for the display industry – the other “Two Trillion and Twin Stars” industry – Taiwan is currently ranked second in the world in terms of Flat Panel Display (FPD) manufacturing capacity, and it has become a leading global high-tech product manufacturing and service centre. In order to increase Taiwan’s technological autonomy further in this area, the government has implemented a FPD promotion programme that should create a sound foundation for the development of the display industry. Recent performance in relation to R&D project funding and manpower is set out in Figure 5.9.
Figure 5.9: Electronics R&D funding and manpower
Source: 2005 Yearbook of Science & Technology (NSC, 2005) Notes: Funiding is given as budget numbers.
2341.4
1533.3
1144.3
1008.1
2183
347.6
248.8 244.5 204.4 327.8
6.7 6.2
4.7 4.9
6.7
0 500 1000 1500 2000 2500
2000 2001 2002 2003 2004
0 1 2 3 4 5 6 7 8 Funding (NT$ Million) Manpower (Man-Year) Funding/Manpower
(NT$ Million)
4) Optoelectronics
Taiwan’s optoelectronics industry spans the four major areas of optical information, optical displays, optical communications, and optoelectronics elements. The domestic optoelectronics industry
enjoyed sales valued at NT$ 1.1 trillion in 2004, an increase of 42% over the NT$ 794.1 billion sales of 2003. Growth was especially fast in the optical display segment, where the domestic FPD industry grew by 71% over the previous year and reached NT$ 715 billion in 2004. Taiwan has now become the world’s second largest flat panel display producer.
Figure 5.10: Optoelectronics R&D funding and manpower
Source: 2005 Yearbook of Science & Technology (NSC, 2005) Notes: Funiding is given as budget numbers.
1388.4
2000 2001 2002 2003 2004
0 1 2 3 4 Funding (NT$ Million) Manpower (Man-Year) Funding/Manpower
(NT$ Million)
5) Aggregate performance
Overall outcomes are compiled in the following graph and tables.
Figure 5.11: Value of production of Taiwan’s IT Hardware industry, 1997-2005
Source: III-MIC/ ITIS (2006/3)
Production Value 30,174 33,776 39,881 47,019 42,750 48,435 57,171 69,664 77,012 Growth Rate 20.50% 11.90% 18.10% 17.90% -9.10% 13.30% 18% 21.90% 10.50%
1997 1998 1999 2000 2001 2002 2003 2004 2005
Million USD
Table 5.9: Shipment value of IT Hardware in Taiwan, 2001-05
Million US$ 2001 2002 2003 2004 2005
Notebook PC 12,239 13,922 16,809 21,831 30,301 Desktop PC 6,866 6,933 8,297 9,404 10,080 Motherboard 5,647 5,636 6,353 7,639 7,985
Server 1,040 1,324 1,559 1,837 2,060
LCD monitor 3,131 5,646 9,801 14,402 15,726 CDT monitor 5,240 4,544 3,804 3,492 2,059
DSC 1,132 1,003 1,476 1,972 2,777
ODD 2,107 3,146 3,297 3,544 3,700
Projector & Others N/A 285a 530a 5,479 5,600 IT Hardware Total 42,750 48,435 57,101 69,600 80,036 Growth Rate -9.1% 13.3% 18.0% 21.9% 16.2%
a = projector only
Source: MIC website (2005/12)
Table 5.10: Shipment value of Communication Industry, 2001-05
Million US$ 2001 2002 2003 2004 2005
Mobile Phone 858 1939 3121 3644 4374
PDA 491 972 1190 1821 3240
Mobile Handheld 1349 2911 4311 5465 7541
WLAN 244 359 606 1341 1796
DSL 524 677 750 1179 1148
VoIP N/A N/A N/A 254 340
Cable Modem 470 455 299 482 727
Datacom 1238 1491 1655 3756 4011
Source: Advisory & Intelligence Service Program, III-MIC (2005/12)