Legal Opinion Led to Science and Technology Law: By the Mechanism of Policy Assessment of Industry and Social Needs
With the coming of the Innovation-based economy era, technology research has become the tool of advancing competitive competence for enterprises and academic institutions. Each country not only has begun to develop and strengthen their competitiveness of industrial technology but also has started to establish related mechanism for important technology areas selected or legal analysis. By doing so, they hope to promote collaboration of university-industry research, completely bring out the economic benefits of the R & D. and select the right technology topics.
To improve the depth of research cooperation and collect strategic advice, we have to use legislation system, but also social communication mechanism to explore the values and practical recommendations that need to be concerned in policy-making. This article in our research begins with establishing a mechanism for collecting diverse views on the subject, and shaping more efficient dialogue space. Finally, through the process of practicing, this study effectively collects important suggestions of practical experts.
Impact of Government Organizational Reform to Scientific Research Legal System and Response Thereto (2) – For Example, The Finnish Innovation Fund (“SITRA”) III. Comparison of Strength and Weakness of Sitra Projects 1. Sitra Venture Capital Investment Model In order to comprehend how to boost innovation business development to upgrade innovation ability, we analyze and compare the innovation systems applied in Sweden, France and Finland[1] . We analyze and compare the characteristics, strength and weakness of innovation promotion models in terms of funding, networking and professional guidance. Generally, the first difficulty which a start-up needs to deal with when it is founded initially is the funding. Particularly, a technology company usually requires tremendous funding when it is founded initially. Some potentially adequate investors, e.g., venture capitals, seldom invest in small-sized start-up (because such overhead as supervision and management fees will account for a high percentage of the investment due to the small total investment amount). Networking means how a start-up integrates such human resources as the management, investors, technical advisors and IP professionals when it is founded initially. Control over such human resources is critical to a new company’s survival and growth. Professional guidance means how professional knowledge and human resource support the start-up’s operation. In order to make its product required by the market, an enterprise usually needs to integrate special professional knowledge. Notwithstanding, the professional knowledge and talents which are available from an open market theoretically often cannot be accessed, due to market failure[2]. Assuming that Sitra’s funding is prioritized as Pre-seed-Initiation stage, Seed-Development stage and Follow-up – Growth stage, under Finland model, at the Pre-seed-Initiation stage, Sitra will provide the fund amounting to EUR20,000 when Tekes will also provide the equivalent fund, provided that the latter purely provides subsidy, while the fund provided by Sitra means a loan to be repaid (without interest) after some time (usually after commercialization), or a loan convertible to shares. Then, the loan would be replaced by soft or convertible (to shares) investment and the source of funding would turn to be angel investors or local seed capital at the Seed-Development stage. At this stage, the angel investors, local seed capital and Sitra will act as the source of funding jointly in Finland, while Tekes will not be involved at this stage. At the Follow-up-Growth stage, like the Sweden model, Sitra will utilize its own investment fund to help mitigate the gap between local small-sized funding and large-sized international venture capital[3]. How to recruit professional human resources is critical to a start-up’s success. Many enterprises usually lack sufficient professional human resources or some expertise. DIILI service network set up by Sitra is able to provide the relevant solutions. DILLI is a network formed by product managers. Its members actively participate in starts-up and seek innovation. They also participate in investment of starts-up independently sometimes. Therefore, they are different from angel investors, because they devote themselves to the starts-up on a full-time basis[4]. In other words, they manage the starts-up as if the starts-up were their own business. 2. Key to Public Sector’s Success in Boosting Development of Innovation Activity Business In terms of professional guidance, voluntary guidance means the direct supply of such professional resources as financing, human resource and technology to starts-up, while involuntary guidance means the supply of strategic planning in lieu of direct assistance to help the enterprises make routine decisions[5]. The fractured and incomplete professional service attendant market generates low marginal effect. Therefore, it is impossible for the traditional consultation service to mitigate such gap and the investment at the pre-seed initiation stage will be excessive because of the acquisition of the professional services. Meanwhile, professional advisors seldom are involved in consultation services at the pre-seed initiation stage of a start-up because of the low potential added value. Therefore, at such stage, only involuntary professional guidance will be available usually. Under Sitra model, such role is played by an angel investor. Upon analysis and comparison, we propose six suggested policies to boost innovation activities successfully as the reference when observing Sitra operation. First of all, compared with the French model, Finland Sitra and Sweden model set more specific objectives to meet a start-up’s needs (but there is some defect, e.g., Sitra model lacks voluntary professional guidance). Second, structural budget is a key to the successful model. Sitra will receive the funds in the amount of EUR235,000,000 from the Finnish Government, but its operating expenditure is covered by its own operating revenue in whole. Third, it is necessary to provide working fund in installments and provide fund at the pre-seed-initiation stage. Under both of Finland model and Sweden model, funds will be provided at the pre-seed-initiation stage (Tekes is responsible for providing the fund in Finland). Fourth, the difficulty in networking must be solved. In Sitra, the large-sized talent network set up by it will be dedicated to recruiting human resources. Fifth, the voluntary professional guidance is indispensable at the pre-seed-initiation stage, while the same is unavailable at such stage under Sitra model. Instead, the Sweden model is held as the optimal one, as it has a dedicated unit responsible for solving the difficulty to seek profit. Sixth, soft loan[6] will be successfully only when the loan cannot be convertible to shares. At the pre-seed initiation stage or seed-development stage, a start-up is usually funded by traditional loan. Assuming that the start-up is not expected to gain profit, whether the loan may be convertible to shares will also be taken into consideration when the granting of loan is considered (therefore, the fund provider will not be changed to the “capital” provider). Besides, the government authorities mostly lack the relevant experience or knowledge, or are in no position to negotiate with international large-sized venture capital companies. For example, under the French model, the government takes advantage of its power to restrict the venture capital investment and thereby renders adverse impact to starts-up which seek venture capital. Finally, the supply of own fund to meet the enterprises’ needs at seed-development stage and follow-up-growth stage to mitigate the gap with large-sized venture capital[7] is also required by a successful funding model. IV. Conclusion－Deliberation of Finnish Sitra Experience As the leading national industrial innovation ability promoter in Finland, Sitra appears to be very characteristic in its organizational framework or operating mechanism. We hereby conclude six major characteristics of Sitra and propose the potential orientation toward deliberation of Taiwan’s industrial innovation policies and instruments. 1. Particularity of Organizational Standing In consideration of the particularity of Sitra organizational standing, it has two characteristics observable. First, Sitra is under supervision of the Finnish Parliament directly, not subordinated to the administrative organizational system and, therefore, it possesses such strength as flexibility and compliance with the Parliament’s requirements. Such organization design which acts independently of the administrative system but still aims to implement policies has been derived in various forms in the world, e.g., the agency model[8] in the United Kingdom, or the independent apparatus in the U.S.A. Nevertheless, to act independently of the administrative system, it has to deal with the deliberation of responsible political principles at first, which arouses the difficulty in taking care of flexibility at the same time. In Taiwan, the intermediary organizations include independent agencies and administrative corporations, etc., while the former still involves the participation of the supreme administrative head in the right of personnel administration and is subordinated to the ministries/departments of the Executive Yuan and the latter aims to enforce the public missions in the capacity of “public welfare” organization. Though such design as reporting to the Parliament directly is not against the responsible political principles, how the Parliament owns the authority to supervise is the point (otherwise, theoretically, the administrative authorities are all empowered by the parliament in the country which applies the cabinet system). Additionally, why some special authorities are chosen to report to the parliament directly while other policy subjects are not is also disputable. The existence of Sitra also refers to a circumstantial evidence substantiating that Finland includes the innovation policy as one of the important government policies, and also the objective fact that Finland’s innovation ability heads the first in the world. Second, Sitra is a self-sufficient independent fund, which aims to promote technical R&D and also seeks profit for itself, irrelevant with selection of adequate investment subjects or areas. Instead, for this purpose, the various decisions made by it will deal with the utility and mitigate the gap between R&D and market. Such entity is responsible for public welfare or policy projects and also oriented toward gain from investment to feed the same back to the individuals in the organization. In the administrative system, Sitra is not directed by the administrative system but reports to the Parliament directly. Sitra aims to upgrade the national R&D innovation ability as its long-term goal mission and utilizes the promotion of innovation business and development of venture capital market. The mission makes the profit-orientation compatible with the selection of investment subjects, as an enterprise unlikely to gain profit in the future usually is excluded from the national development view. For example, such industries as green energy, which is not likely to gain profit in a short term, is still worth investing as long as it meets the national development trend and also feasible (in other words, selection of marketable green technology R&D, instead of comparison of the strength and weakness in investment value of green energy and other high-polluted energy). 2. Expressly Distinguished From Missions of Other Ministries/Departments For the time being, Sitra primarily invests in starts-up, including indirect investment and direct investment, because it relies on successful new technology R&D which may contribute to production and marketability. Starts-up have always been one of the best options, as large-sized enterprises are able to do R&D on their own without the outsourcing needs. Further, from the point of view of an inventor, if the new technology is marketable, it will be more favorable to him if he chooses to start business on his own or make investment in the form of partnership, instead of transfer or license of the ownership to large-sized enterprises (as large-sized enterprises are more capable of negotiation). However, note that Sitra aims to boost innovation activities and only targets at start-up business development, instead of boosting and promoting the start-up per se. Under the requirement that Sitra needs to seek profit for itself, only the business with positive development view will be targeted by Sitra. Further, Sitra will not fund any business other than innovation R&D or some specific industries. Apparently, Sitra only focuses on the connection between innovation activities and start-up, but does not act as the competent authority in charge of small-sized and medium-sized enterprises. Meanwhile, Sitra highlights that it will not fund academic research activities and, therefore, appears to be distinguished from the competent authority in charge of national scientific research. Though scientific research and technology innovation business, to some extent, are distinguished from each other in quantity instead of quality, abstract and meaningless research is existent but only far away from the commercialization market. Notwithstanding, a lot of countries tend to distinguish basic scientific research from industrial technology R&D in the administration organization's mission, or it has to be. In term of the way in which Sitra carries out its mission, such distinguishing ability is proven directly. 3. Well-Founded Technology Foresight-Based Investment Business The corporate investments, fund investments and project funding launched by Sitra are all available to the pre-designated subjects only, e.g. ecological sustainable development, energy utilization efficiency, and social structural changes, etc. Such way to promote policies as defining development area as the first priority and then promoting the investment innovation might have some strength and weakness at the same time. First of all, the selection of development areas might meet the higher level national development orientation more therefor, free from objective environmental restrictions, e.g. technical level, leading national technology industries and properties of natural resources. Notwithstanding, an enterprise’s orientation toward innovation R&D might miss the opportunity for other development because of the pre-defined framework. Therefore, such way to promote policies as defining development areas or subjects as the first priority will be inevitably based on well-founded technology foresight-based projects[9], in order to take various subjective and objective conditions into consideration and to forecast the technology development orientation and impact to be faced by the home country’s national and social economies. That is, said strength and weakness will be taken into consideration beforehand for foresight, while following R&D funding will be launched into the technology areas pre-designated after thorough analysis. 4. Self-Interested Investment with the Same High Efficiency as General Enterprises Sitra aims to gain profit generally, and its individual investment model, e.g., DIILI, also permits marketing managers to involve business operation. The profit-sharing model enables Sitra to seek the same high efficiency as the general enterprises when purusing its innovation activity development. The investment launched by Sitra highlights that it is not “funding” (which Tekes is responsible for in Finland) or the investment not requiring return. Therefore, it has the system design to acquire corporate shares. Sitra participates in a start-up by offering its advanced technology, just like a general market investor who will choose the potential investment subject that might benefit him most upon his personal professional evaluation. After all, the ultimate profit will be retained by Sitra (or said DIILI manger, subject to the investment model). Certainly, whether the industry which requires permanent support may benefit under such model still remains questionable. However, except otherwise provided in laws expressly, said special organization standing might be a factor critical to Sitra profit-seeking model. That is, Sitra is not subordinated to the administrative system but is under supervision of the parliament independently, and how its staff deal with the conflict of interest issues in the capacity other than the public sector’s/private sector’s staff is also one of the key factors to success of the system. 5. Investment Model to Deal With Policy Instruments of Other Authorities/Agencies Sitra decides to fund a start-up depending on whether it may gain profit as one of its priorities. As aforesaid, we may preliminarily recognize that the same should be consistent with funding to starts-up logically and no “government failure” issue is involved. For example, the funding at the pre-seed-initiation stage needs to tie in with Tekes’ R&D “funding” (and LIKSA service stated herein) and, therefore, may adjust the profit-seeking orientation, thereby causing deviation in promotion of policies. The dispute over fairness of repeated subsidy/funding and rationality of resource allocation under the circumstance must be controlled by a separate evaluation management mechanism inevitably. 6. Affiliation with Enhancement of Regional Innovation Activities Regional policies cannot be separable from innovation policies, especially in a country where human resources and natural resources are not plentiful or even. Therefore, balancing regional development policies and also integrating uneven resource distribution at the same time is indispensable to upgrading of the entire national social economic benefits. The Finnish experience indicated that innovation activities ought to play an important role in the regional development, and in order to integrate enterprises, the parties primarily engaged in innovation activities, with the R&D ability of regional academic research institutions to upgrade the R&D ability effectively, the relevant national policies must be defined for adequately arranging and launching necessary resources. Sitra's approaches to invest in starts-up, release shares after specific period, integrate the regional resources, upgrade the national innovation ability and boost the regional development might serve to be the reference for universities’ centers of innovative incubator or Taiwan’s local academic and scientific sectors[10] to improve their approaches. For the time being, the organization engaged in venture capital investment in the form of fund in Taiwan like Sitra of Finland is National Development Fund, Executive Yuan. However, in terms of organizational framework, Sitra is under supervision of the Parliament directly, while National Development Fund is subordinated to the administrative system of Taiwan. Though Sitra and National Development Fund are both engaged in venture capital investments primarily, Sitra carries out its missions for the purpose of “promoting innovative activities”, while the National Development Fund is committed to achieve such diversified goals as “promoting economic changes and national development[11]” and is required to be adapted to various ministries’/departments’ policies. Despite the difference in the administrative systems of Taiwan and Finland, Sitra system is not necessarily applicable to Taiwan. Notwithstanding, Sitra’s experience in promotion and thought about the system might provide a different direction for Taiwan to think when it is conceiving the means and instruments for industrial innovation promotion policies in the future. [1] Bart Clarysse & Johan Bruneel, Nurturing and Growing Innovation Start-Ups: The Role of Policy As Integrator, R&D MANAGEMENT, 37(2), 139, 144-146 (2007). Clarysse & Bruneel analysis and comparison refers to Sweden Chalmers Innovation model, French Anvar/Banque de Developpement des PMEs model and Finland Sitra PreSeed Service model. [2] id. at 141-143. [3] id. at 141. [4] id. at 145-146. [5] id. at 143. [6] The loan to be repaid is not a concern. For example, the competent authority in Sweden only expects to recover one-fourths of the loan. [7] Clarysse & Bruneel, super note 26, at 147-148. [8] 彭錦鵬，〈英國政署之組織設計與運作成效〉，《歐美研究》，第30卷第3期，頁89-141。 [9] Technology foresight must work with the innovation policy road mapping (IPRM) interactively, and consolidate the forecast and evaluation of technology policy development routes. One study case about IPRM of the environmental sustainable development in the telecommunication industry in Finland, the IPRM may enhance the foresighted system and indicates the potential factors resulting in systematic failure. Please see Toni Ahlqvist, Ville Valovirta & Torsti Loikkanen, Innovation policy road mapping as a systemic instrument for forward-looking policy design, Science and Public Policy 39, 178-190 (2012). [10] 參見李昂杰，〈規範新訊：學界科專辦法及其法制配套之解析〉，《科技法律透析》，第23卷第8期，頁33（2011）。 [11] National Development Fund, Executive Yuan website, http://www.df.gov.tw/(tftgkz45150vye554wi44ret)/page-aa.aspx?Group_ID=1&Item_Title=%E8%A8%AD%E7%AB%8B%E5%AE%97%E6%97%A8#(Last visit on 2013/03/28)
Research on Taiwan’s Policies of Innovative Industry Development in Recent Years (2015-2016)Research on Taiwan’s Policies of Innovative Industry Development in Recent Years (2015-2016) 1. “Five plus Two” Innovative Industries Policy On June 15, 2016, Premier Lin Chuan met with a group of prominent business leaders to talk about a government project on five innovative industries, which aim to drive the next generation of businesses in R.O.C.. Subsequently the program was expanded to include “new agriculture” and the “circular economy” as the “+2.” The program was then broadened even further to include the Digital Economy and Cultural Innovation, with even Semiconductors and IC Design included, although the name of the policy remains 5+2. Speaking at the Third Wednesday Club in Taipei, Premier Lin said the industries require more investment to drive the next generation of industry growth momentum in R.O.C., create high-quality jobs, and upgrade the industrial competitiveness. Executive Yuan has selected the five innovative industries of Asia Silicon Valley, smart machinery, green energy, biotech & pharmaceutical industry, and national defense, which will be the core for pushing forward the next-generation industrial growth and improve overall environment by creating a cluster effect that links local and global industries, while simultaneously raising wages and stimulating employment. Premier Lin said, regarding industrial competitiveness and investment issues the lackluster economy has stifled investment opportunities, and with limited government budgets, the private sector must play the larger role in investments. Regarding the “Five major Innovative Industries” project, Premier Lin said the National Development Council is currently drafting long-term plan to attract talent, create a thriving working environment, and infuse companies with more innovation, entrepreneurship and young workers. In addition, R.O.C. must also cultivate a strong software industry, without which it would be difficult to build a highly intelligent infrastructure. The National Development Council said the program possess both the capacity of domestic demand and local characteristics, as the core for pushing forward the next-generation industrial growth. The government aims to promote a seamless synergy of investment, technology, and the talent, in order to develop innovative industrial clusters for furthering global linkage and nurturing international enterprises. In the meantime, the government also aims at achieving the enhancement of technology levels, balanced regional development, as well as realizing the benefits of job creation. 2. The Asia Silicon Valley Development Plan In September 2016 the government approved the Asia Silicon Valley Development Plan, which connect Taiwan to global tech clusters and create new industries for the next generation. By harnessing advanced technological research and development results from around the world, the plan hopes to promote innovation and R&D for devices and applications of the internet of things (IoT), and upgrade Taiwan’s startup and entrepreneurship ecosystem. The four implementation strategies are as follows: (1) Building a comprehensive ecosystem to support innovation and entrepreneurship (2) Connect with international research and development capabilities (3) Create an IoT value chain (4) Construct diversified test beds for smart products and services by establishing a quality internet environment Taiwan’s first wave of industrial development was driven by continuous technological innovation, and the wave that followed saw the information industry become a major source of economic growth. 3. Global Hub for Smart Machinery On July 21, 2016, Premier Lin Chuan said at a Cabinet meeting, the government aims to forge Taiwan into a global manufacturing hub for intelligent machinery and high-end equipment parts. Upgrading from precision machinery to intelligent machinery is the main goal of putting intelligent machinery industry into focal execution area expecting to create jobs and to maximize the production of production line as well as to forge central Taiwan into a global manufacturing hub for smart machinery. The Ministry of Economic draws up the Intelligent Machinery Promotion Program to establish the applications of the technology and capacity of services that fit the demand of the market. The program embodies two parts. The first is to accelerate the industrialization of intelligent machinery for building an ecosystem. The second is to improve intelligentization by means of introducing the intelligent machinery into the industries. The execution policy of the Intelligent Machinery Promotion Program is to integrate the intelligent functions such as malfunctions predictions, accuracy compensation, and automatic parameter setting into the machinery industry so as to have the ability to render the whole solutions to the problem. Simultaneously, the program employs three strategies, which are connecting with the local industries, connecting with the future, and connecting with the world, to develop the mentioned vision and objectives. Especially, the way to execute the strategy of connecting with the local industries consists of integrating the capabilities of industry, research organization and the government. At the meantime, the government will encourage the applications of smart vehicles and unmanned aerial vehicles and train the talents as well. The thinking of connecting with the future lies in the goal of deepening the technologies, establishing systematic solutions, and providing a testing areas, which focus on the related applications such as aerospace, advanced semiconductor, smart transportation, green vehicles, energy industry, whole solutions between factories, intelligent man-machine coordination, and robots of machine vision combined with intelligent machinery applications. The government would strengthen the cross-cutting cooperation to develop machines for aerospace and integrate the system of industrial division to form a cluster in order to create Taiwanese IoT technology. Eventually, Taiwan will be able to connect with the world, enhance international cooperation, expand export trade and push industry moving toward the age of information and digital economy and break the edge of industry technology to make the industry feel the goodwill of the government. 4. Green energy innovations The government’s “five plus two” innovative industries program includes a green energy industrial innovation plan passed October 27, 2016 that will focus on Taiwan’s green needs, spur extensive investments from within and outside the country, and increase quality employment opportunities while supporting the growth of green energy technologies and businesses. The government is developing the Shalun Green Energy Science City. The hub’s core in Shalun will house a green energy technology research center as well as a demo site, providing facilities to develop research and development (R&D) capabilities and conduct the requisite certification and demonstration procedures. The joint research center for green energy technologies will integrate the efforts of domestic academic institutions, research institutes, state-run enterprises and industry to develop green energy technologies, focusing on four major functions: creating, conserving and storing energy, as well as system integration. Development strategies include systems integration and finding better ways to conserve, generate and store energy by promoting green energy infrastructure, expanding renewable energy capabilities and cooperating with large international firms. The emergence of the green economy has prompted the government to build infrastructure that will lay the foundation for Taiwan’s green energy sector, transform the nation into a nuclear-free society, and spur industrial innovation. For innovative technology industries, green energy industries can drive domestic economic development by attracting more venture capital and creating more employment opportunities. 5. Biomedical Industry Innovation Program To facilitate development of Taiwan’s biomedical industry, the government proposed a “biomedical industrial innovation promotion program” on November 10, 2016 to serve as the nation’s new blueprint for innovative biomedical research and development (R&D). To facilitate development of the biomedical industry, the government proposed a “biomedical industrial innovation promotion program”. The program centered on the theme of “local, global and future links,” “the biomedical industrial innovation promotion program” includes four action plans: (1) Build a comprehensive ecosystem To address a rapidly ageing global population, Taiwan will enhance the biomedical industry’s capacity for innovation by focusing on talent, capital, topic selection, intellectual property, laws and regulations, and resources. (2) Integrate innovative business clusters Established by the Ministry of Science and Technology and based in Hsinchu Biomedical Science Park, the center will serve as a government think tank on related issues. It is also tasked with initiating and advancing exchanges among local and foreign experts, overseeing project implementation, promoting investment and recruiting talents. Equally important, it will play a central role in integrating resources from other biomedical industry clusters around the country, including Nangang Software Park in Taipei City, Central Taiwan Science Park in Taichung City and Southern Science Park in Tainan City. (3) Connect global market resources Building on Taiwan’s advantages, promote M&A and strategic alliances, and employ buyout funds and syndicated loans to purchase high-potential small and medium-sized international pharmaceutical companies, medical supply companies, distributors and service providers. Use modern mosquito-borne disease control strategies as the foundation of diplomatic cooperation, and promote the development of Taiwan’s public health care and medical services in Southeast Asian countries. (4) Promote specialized key industries Promote niche precision medical services, foster clusters of world-class specialty clinics, and develop industries in the health and wellness sectors. 6. DIGITAL NATION AND INNOVATIVE ECONOMIC DEVELOPMENT PLAN On November 24, 2016, the Executive Yuan promote the Digital Nation and Innovative Economic Development Plan (2017-2025) (DIGI+ program), the plan’s main goals for 2025 are to grow R.O.C.’s digital economy to NT $ 6.5 trillion (US$205.9 billion), increase the digital lifestyle services penetration rate to 80 percent, speed up broadband connections to 2 Gbps, ensure citizens’ basic rights to have 25 Mbps broadband access, and put R.O.C. among the top 10 information technology nations worldwide. In addition to the industrial economy, the program can jump off bottlenecks in the past industrial development, and promote the current Internet of things, intelligent machinery, green energy, medical care and other key national industries, but also attaches great importance to strengthening the digital infrastructure construction, the development of equal active, as well as the creation of a service-oriented digital government. It is also hoped that through the construction of a sustainable and intelligent urban and rural area, the quality of life will be improved and the people will enjoy a wealthy and healthy life. Over the next 8 years, the government will spend more than NT $ 150 billion. The plan contains several important development strategies: DIGI+Infrastructure: Build infrastructure conducive to digital innovation. DIGI+Talent: Cultivate digital innovation talent. DIGI+Industry: Support cross-industry transformation through digital innovation. DIGI+Rights: Make R.O.C. an advanced society that respects digital rights and supports open online communities. DIGI+Cities: Build smart cities through cooperation among central and local governments and the industrial, academic and research sectors. DIGI+Globalization: Boost R.O.C.’s standing in the global digital service economy. The program aims to build a favorable environment for digital innovation and to create a friendly legal environment to complete the draft amendments to the Digital Communications Law and the Telecommunications Act as soon as possible, foster cross-domain digital talents and develop advanced digital technologies, To create a digital economy, digital government, network society, smart urban and rural and other national innovation ecological environment in order to achieve "the development of active network society, promote high value innovation economy, open up rich countries of the policy vision. In order to achieve the overall effectiveness of the DIGI + program, interdisciplinary, inter-ministerial, inter-departmental and inter-departmental efforts will be required to collaborate with the newly launched Digital National Innovation Economy (DIGI +) Promotion Team. 7. “NEW AGRICULTURE” PROMOTION PROJECT At a Cabinet meeting On December 08, 2016, Premier Lin Chuan underscored the importance of a new agricultural paradigm for Taiwan’s economic development, adding that new agriculture is an integral part of the “five plus two” industrial innovation projects proposed by President Tsai Ing-wen. The “new agriculture” promotion project uses innovation technology to bring value to agricultural, and build new agricultural paradigm, agricultural safety systems and promote agricultural marketing. This project also takes resources recycling and environmental sustainability into consideration to promote agricultural transformation, and build a robust new agricultural system. This agricultural project is expected to increase food self-sufficiency rate to 40%, level up agricultural industry value by NT$43.4 billion, create 370,000 jobs and increase portion of total agricultural exports to new overseas markets to 57% by 2020. This project contains three aspects: First is “building new agricultural paradigm”: to protect farmers, agricultural development and ensure sustainability of the environment. Second is “building agricultural safety systems”: Ensuring product safety and quality, and building a certification system which can be trust by the consumers and is consistent with international standards. Last but not least is “leveling up agricultural marketing and promotions”: enhancing promotion, making the agricultural industry become profitable and sustainable. Council of Agriculture’s initiatives also proposed 10 policies to leverage agricultural industry, not only just use the passive subsidies measure of the past. These policies including promoting environmentally friendly farming practices; giving farmers that are beneficial(green) to the land payments; stabilizing farmers’ incomes; increasing the competitiveness of the livestock and poultry industries; using agricultural resources sustainably; ensuring the safety of agricultural products; developing technological innovation; leveling up food security; increasing diversification of domestic and external marketing channels; and increasing agriculture industry added value. In this statutes report, Council of Agriculture said this project will accelerate reforms, create new agricultural models and safety systems, but also build a new sustainable paradigm of agricultural. Premier Lin Chuan also backed this “five plus two innovative industries” program and “new agriculture” project, and asked Council of Agriculture to reviewing the possible legal changes or amendment that may help to enhance the transformation of agricultural sector.
Introduction to the “Public Procurement for Startups” mechanismIntroduction to the “Public Procurement for Startups” mechanism I.Backgrounds According to the EU’s statistics, government procurement budget accounted for over 14% of GDP. And, according to the media report, the total amount of government procurement in Taiwan in 2017 accounted for nearly 8%. Therefore, the government’s procurement power has gradually become a policy tool for the government to promote the development of innovative products and services. In 2017, the Executive Yuan of the R.O.C.（Taiwan）announced a government procurement policy named “Government as Good Partners with Startups （政府成為新創好夥伴）”[1] to encourage government agencies and State-owned Enterprises to procure and adopt innovative goods or services provided by startups. This policy was subsequently implemented through an action plan named “Public Procurement for Startups”（新創採購）[2] by the Small and Medium Enterprise Administration（SMEA）.The action plan mainly includes two important parts：One created the procurement process for startups to enter the government contracts market through inter-entities contracts. The other accelerated the collaboration of the government agencies and startups through empirical demonstration. II.Facilitating the procurement process for startups to enter the government market In order to help startups enter the government contracts market in a more efficient way, the SMEA conducts the procurement of inter-entity supply contracts with suppliers, especially startups, for the supply of innovative goods or services. An inter-entity supply contract[3] is a special contractual framework, under which the contracting entity on behalf of two or more other contracting parties signs a contract with suppliers and formulates the specifics and price of products or services provided through the public procurement process. Through the process of calling for tenders, price competition and so on, winning tenderers will be selected and listed on the Government E-Procurement System. This framework allows those contracting entities obtain orders and acquire products or services which they need in a more efficient way so it increases government agencies’ willingness to procure and use innovative products and services. From 2018, the SMEA started to undertake the survey of innovative products and services that government agencies usually needed and conducted the procurement of inter-entity supply contracts for two rounds every year. As a result, the SMEA plays an important role to bridge the demand and supply sides for innovative products or services by means of implementing the forth-mentioned survey and procurement process. Moreover, in order to explore more innovative products and services with high quality and suitable for government agencies and public institutions, the SMEA actively networked with various stakeholders, including incubators, accelerators, startups mentoring programs sponsored by private and public sectors and so on. Initially the items to be procured were categorized into four themes which were named the Smart Innovations, the Smart Eco, the Smart Healthcare, and the Smart Security. Later, in order to show the diversity of the innovation of startups which response well to various social issues, from 2019, the SMEA introduced two new theme solicitations titled the Smart Education and the Smart Agriculture to the inter-entities contracts. Those items included the power management systems, the AI automated recognition and image warning system, the chatbot for public service, unmanned flying vehicles, aerial photography services and so on. Take the popular AI image warning system as an example, the system is used by police officers to make instant evidence searching and image recording. Other government agencies apply the innovative system to the investigation of illegal logging and school safety surveillance. Moreover, the SMEA has also offered subsidy for local governments tobuy those items provided by startups. That is the coordinated supporting measure which allows startups the equal playing field to compete with large companies. The Subsidy scheme is based on the Guideline for Subsidies on Procurement of Innovative Products and Services[3] (approved by the Executive Yuan on March 29, 2018 and revised on Feb. 20, 2021). In the Guideline, “innovative products and services” refer to the products, technologies, labor, service flows or items and services rendered with creative activities through deploying scientific or technical means and a certain degree of innovations by startups with less than five years in operation. Such innovative products and services are displayed for the inter-entity supply contractual framework administered by the SMEA for government procurement. III.Accelerating the collaboration of the government agencies and startups through empirical demonstration To assist startups to prove their concepts or services, and become more familiar with the governemnrt’s needs, the SMEA also created a mechanism called the “Solving Governmental Problems by Star-up Innovation”（政府出題˙新創解題）. It plans to collect government agencies’ needs, and then solicit innovative proposals from startups. After their proposals are accepted, startups will be given a grant up to one million NT dollars to conduct empirical studies on solution with government agencies for about half a year. Take the cooperation between the “Taoyuan Long Term Care Institute for Older People and the Biotech Startup” for example, a care system with sanitary aids was introduced to provide automatic detection, cleanup and dry services for the patients’discharges, thus saving 95% of cleaning time for caregivers. In the past, caregivers usually spent 4 hours on the average in inspecting old patients, cleaning and replacing their bedsheets as their busy daily routines. Inadequate caregivers makes it difficult to maintain the care quality. If the problem was not addressed immediately, it would make the life of old patients more difficult. IV.Achievements to date Since the promotion of the products and services of the startups and the launch of the “Public Procurement for Startups” program in 2018, 68 startups, with the SMEA’s assistance, have entered the government procurement contracts market, and more than 100 government agencies have adopted the innovative resolutions. With the encouragement for them in adopting and utilizing the fruits of the startups, it has generated more than NT$150 million in cooperative business opportunities. V.Conclusions While more and more startups are obtaining business opportunities from the favorable procurement process, constant innovation remains the key to success. As such, the SMEA has regularly visited the government agencies-buyers to obtain feedbacks from startups so as to adjust and optimize the innovative products or services. The SMEA has also regularly renewed the specifics and items of the procurement list every year to keep introducing and supplying high-quality products or services to the government agencies. [1] Policy for investment environment optimization for Startups（2017）,available athttps://www.ndc.gov.tw/nc_27_28382.（last visited on July 30, 2021 ) [2] https://www.spp.org.tw/spp/（last visited on July 30, 2021 ) [3] Article 93 of Government Procurement Act：I An entity may execute an inter-entity supply contract with a supplier for the supply of property or services that are commonly needed by entities. II The regulations for a procurement of an inter-entity supply contract, the matters specified in the tender documentation and contract, applicable entities, and the related matters shall be prescribed by the responsible entity. [4] https://law.moea.gov.tw/LawContent.aspx?id=GL000555（last visited on July 30, 2021）
An Analysis of the Recusal Mechanism in the Latest Revision of the Government Procurement Act and Regulations Governing Procurements for Scientific and Technological Research and DevelopmentAn Analysis of the Recusal Mechanism in the Latest Revision of the Government Procurement Act and Regulations Governing Procurements for Scientific and Technological Research and Development 1. Introduction Article 1 of the Government Procurement Act (hereinafter referred to as the Act) reveals that “This Act is enacted to establish a government procurement system that has fair and open procurement procedures, promotes the efficiency and effectiveness of government procurement operation, and ensures the quality of procurement.” Therefore, a recusal mechanism for reviewing qualification/disqualification of tenders and bidders is highly essential, for example, the head of the agency or its related persons should disclose the conflict of interests. After amended and promulgated on May 22, 2019 (Presidential Decree Hua-tzung-1 Yi No. 10800049691), the Act was revised with the identical legislative principle of the Act on Recusal of Public Servants Due to Conflicts of Interest. In other words, a more flexible and transparent mechanism has been adopted, which is more advanced and ideal for both procurement authority and external supervisors. 2. The New Recusal Mechanism of the Act Enhances the Flexibility and Transparency The revision struck out the Paragraph 4, Article 15 of the Act, and the regulation related to the recusal mechanism shall be comply with the Act on Recusal of Public Servants Due to Conflicts of Interest, especially the qualification/disqualification provision of the “related persons.” The new government procurement procedure adopted a more flexible and transparent practice, “disclosure in advance and publication afterwards.” The detailed analysis is as follows. (1) Before the Act amended, the personnel of a procuring entity and its related persons shall withdraw themselves from the procurement. Before the Act amended, the personnel of a procuring entity and its related persons shall withdraw themselves from the procurement. According to the previous Paragraph 4 of Article 15 (4), “Suppliers or persons in charge shall not participate in the procurement if they have connections with the agency’s head described in Paragraph 2. However, if the implementation of this paragraph is against fair competition or public interest, the exclusion can be exempted with the authority’s approval.” The Paragraph 2 mentioned specified, “The personnel of a procuring entity shall withdraw themselves from procurement and all related matters thereof if they or their spouses, relatives by blood or by marriage within three degrees, or family members living together with them have interests involved therein.” Simply put, legislators considered that suppliers or persons in charge shall not participate in an agency's procurement if they have conflict of interests with its head. For instance, the spouses, all the relatives within the third degree by consanguinity (blood) or by affinity (marriage), or family members living together with the head of the agency, cannot involve in the procurement of the agency. Furthermore, if a legal entity or an organization is directed by the relatives of the head of a government agency mentioned, it is disqualified from the procurement. (2) After the Act amended, the recusal of related persons substituted by self-disclosure and information publication norms According to the Amendment, the Act was amended because the content of the article is existed in Article 9 of Act on Recusal of Public Servants Due to Conflicts of Interest; thus, Article 15 of the Act is hereby deleted. Recalling Article 9 of the previous Act on Recusal of Public Servants Due to Conflicts of Interest, “A public servant and his related persons shall not conduct transactions such as subsidizing, sales, lease, contracting, or other transactions conducted with consideration with the organ with which the public servant serves or the organs under his supervision.” For this reason, the amendment to Article 15 of Government Procurement Act is to regulate the mechanism of withdrawal of relevant parties by Article 14 of the existing Act on Recusal of Public Servants Due to Conflicts of Interest. However, the amendment of this article is greatly affected by the interpretation of judicial court no. 716, so it is necessary to briefly describe its key points as follows. On the basis of the Judicial Yuan Justice Interpretation No. 716 [Transactions between public officials and their associates and service agencies shall be prohibited), adopting a constitutional interpretation of Article 9 of Act on Recusal of Public Servants Due to Conflicts of Interest, grand justice agreed this article does not contradict the proportion principle of article 23 of Constitution of the Republic of China (Taiwan), and it does not violate Article 15 “The right of existence, the right of work, and the right of property shall be guaranteed to the people” and Article 22 “All other freedoms and rights of the people that are not detrimental to social order or public welfare shall be guaranteed under the Constitution”, either. However, for public officials, if they are not allowed to participate in trading competition, it will result in the monopoly of other minority traders, which is not conducive to the public interest. Therefore, this interpretation holds that if the agency has conducted open and fair procedures in the transaction process, and there is sufficient anti-fraud regulation, whether there is still a risk of improper benefit transmission or conflict of interest, and it is necessary to prohibit the transaction of public officials' associates, the relevant authorities should make comprehensive review and improvement as soon as possible. Accordingly, following interpretation no. 716, Act on Recusal of Public Servants Due to Conflicts of Interest was amended and published with 23 articles on 13 June, 2018. The withdrawal of interested parties is provided for in Article 14 and an additional six exceptions are provided, including: (1) The procurement carried out by public notice under the Government Procurement Act or pursuant to Article 105 of the same Act. (2) The property right in interest created for the procurement, sale by tender, lease by tender or tender solicitation carried out by public notice in a fair competitive manner pursuant to laws. (3) Subsidy requested in the legal capacity under laws; the subsidy to the public servant’s related person in an open and fair manner pursuant to laws, or the subsidy which might be against the public interest if it is prohibited and is granted subject to the competent authority’s approval. (4) The subject matter of the transaction is provided by the organ with which the public servant serves or the organs under his supervision, and traded at the official price. (5) The lease, acquisition, discretionary management, improvement and utilization of national non-public real estate requested by the state-owned enterprise in order to execute the national construction projects or public policies, or for the purpose of public welfare. (6) The subsidy and transaction under the specific amount. The above amendments make the transactions between public officials and related parties that should be avoided in the past partially flexible now. In accordance with Paragraph 2 of the same article, in the case of the first three paragraphs of the proviso of Paragraph 1, the applicant or bidder shall voluntarily state his/her identity in the application or tender documents. After the subsidy or transaction is established, the agency shall disclose it together with its identity. That is to say, the self-disclosure is required beforehand and the information will go public afterwards to meet public expectations of transparency. This is also conducive to the supervision of all sectors, and conforms to the intention of the grand justice’s interpretation. The reason why there is no need for government procurement to withdrawal is that the announcement process of the procurement is made in accordance with Government Procurement Act (including open tendering, selective tendering and restricted tendering through the announcement). There are strict procedures to follow and there is no conflict between the conflict of interest of public officials and the spirit of legislation. As to Paragraph 2 of other legal orders, the property right in interest created for the procurement, sale by tender, lease by tender or tender solicitation carried out by public notice in a fair competitive manner pursuant to laws. The legislative explanations are exemplified by the procurement (e.g. procurements for scientific and technological research and development) handled by the announcement in accordance with Fundamental Science and Technology Act. 3. Conclusion: It is suggested that relevant withdrawal regulations should be amended as soon as possible in procurements for scientific and technological research and development The strike-out of the recusal provision of the Act does not mean that government procurement stoke out the recusal mechanism. The recusal mechanism is still stated in Article 14 of Act on Recusal of Public Servants Due to Conflicts of Interest. In addition to the advantages of the same regulations on the prohibition of transactions between related parties, it also enables the regulators with open and fair procedures and sufficient prevention of fraud, such as government procurement, to avoid evading so as not to harm the public interest. At the same time, supplemented by open and transparent disclosure, the amendment is a positive change of legislation. Meanwhile, this paper believes that Government Procurement Act has adopted the mechanism of flexibility and transparency requirements for the procurement object avoidance regulations, and procurements for scientific and technological research and development should revise relevant withdrawal regulations as soon as possible. In accordance with Paragraph 4 of Article 6 of Fundamental Science and Technology Act and the authorization, Regulations Governing Procurements for Scientific and Technological Research and Development (hereinafter referred to as the regulatory regulations) is established. According to Article 8 (2) and (3) of the regulation, a responsible person, partner, or representative of the public school, public research institute (organization), or juristic person or entity performing the scientific research procurement may not serve as a responsible person, partner, or representative of the supplier. The supplier and the juristic person or entity performing the scientific research procurement may not at the same time be affiliated with each other, or affiliated to the same other enterprise. From the perspective of the article structure, the withdrawal regulation for scientific research procurement is within the norm of Article 15 of Government Procurement Act before the amendment, but it includes regulations for affiliated enterprises, which is not included in Article 15. The amendment to Article 14 of Act on Recusal of Public Servants Due to Conflicts of Interest also states that the proviso of Paragraph 1 of scientific research procurement “other procurements that are regulated by fair competition and by means of an announcement procedure” can also prove that the mechanism for scientific research procurement should adopt this provision. Therefore, it is recommended that the original procurements for scientific and technological research that is independent from Government Procurement Act should be amended by the competent authority as soon as possible in order to comply with the relevant provisions of Article 8 of Regulations Governing Procurements for Scientific and Technological Research and Development and to comply with the original intention of the Regulations Governing Procurements for Scientific and Technological Research and Development, and to avoid stricter regulations on scientific procurement than government procurement. Meanwhile, it is in accordance with the spirit of the grand justice’s interpretation No. 716.
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