Introduction to the “Public Procurement for Startups” mechanism
Introduction 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 to buy 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.
Reference:
[1] Policy for investment environment optimization for Startups（2017）,available at https://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）
I.Background To promote more liberal and internationalized development of Taiwan economy, Premier of Executive Yuan approved the “Free Economic Demonstration Zone Plan” on April 26, 2013. Meanwhile, an Executive Yuan Working Group on Promotion of Economic Demonstration Zone is set up to accelerate the mapping out of the promotion programs as well as detailed action plans. The first phase of the Free Economic Demonstration Zone is to be officially initiated in July. According to the “Free Economic Demonstration Zone Plan”, the relevant laws and provisions regarding the flowing of human and financial capitals, and of logistics, will be loosen up to a great degree, based on the core ideas of liberalization, internationalization, and forwardness. Other related measures such as offering of lands and taxation would also be made, in order to attract capitals from both the inside and outside of the country. In addition, the Free Economic Demonstration Zone will first develop economic activities such as intelligent computing, international medicine services, value-added agriculture and cooperation among industries, to accelerate the transformation of the industrial structure of Taiwan. In order to construe an excellent environment for business of full liberalization and internationalization, the promotion strategies will be focused on “break-through of legal frameworks and innovations of management mechanisms”. II.Content of the Plan To accelerate the promotion process, the Free Economic Demonstration Zone will be conducted in two phases. The first phase is centered on the existing free trade port areas, including five ports and one airport, incorporated with the nature of “being inside the country border but outside the tariff zone”. All the industrial parks in the near counties and cities will also be integrated. The promotion will be set out simultaneously in the north, middle and south of Taiwan. The effects of the promotion are expected to be magnified by fully utilizing the resources and the unique characters of industries of each region. Moreover, the promulgation of a special legislation on the Free Economic Demonstration Zone would be facilitated in the future. After this special legislation is passed, the set-ups of demonstration zones can be applied by authorities either of central or of local government and the related promotion works of the second phase will be unfolded immediately. According to the Executive Yuan, the Free Economic Demonstration Zone will be beneficial in terms of creating positive conditions for Taiwan to participate in regional trade organizations and attract both local and foreign investment, injecting new movement into the economic growth of Taiwan. III.Recent Development In addition, on August 8, 2013, relevant discussions on “Furtherance Plan for Free Economic Demonstration Zone Phase One” are further unfolded in the Executive Yuan conference. In addition, the Premier also indicates, that the furtherance of the Free Economic Demonstration Zone (hereafter: FEDZ) is divided into two phases. The first phase starts from the moment that the Plan is approved till the related special legislation is passed and promulgated. In this phase, the relevant tasks can be achieved through the ways of promulgation of administrative orders. On the other hand, the tasks concerning taxation benefits and other parts that involve legislation will not able to be initiated till the second phase of the Plan. For those tasks, the Council for Economic Planning and Development is asked to complete the drafting of this special legislation and related procedures for registering it into the Executive Yuan, together with the Ministry of Economic Affairs and other concerned agencies, in the hope that the related legislation works of the Executive Yuan can be completed before the end of this year. In respect of “Furtherance Plan for Free Economic Demonstration Zone Phase One”, Premier Jiang further points out, that FEDZ is a model incorporates the concept of “being inside the country border but outside the tariff zone” and the idea of “combining the stores upfront and the factories behind, outsourcing manufactures”. In this way, the hinterland of a port can be expended and magnified effects to be achieved through using the resources provided by the factory in behind. Under this pattern, the expansion effects that cities and counties such as New Taipei City and Changhua Country fight for, can be further extended by this concept of “factories in the back”. As for Port of Anping, over which Tainan City government has proactively fought for, can be listed as a demonstration zone once the Executive Yuan approved it as free trade port zone. In the future, other places that are with forward-looking industry and suitable can still be enlisted. Premier Jiang further expresses that, there are four demonstration industries in the first phase, including intelligent computing, international medicine services, value-added agriculture and cooperation among industries. Yet, he also points out that the demonstration of liberalized economy is a concept of “4+N”. It means that the demonstration will not be limited to the scope of these four industries. Other industries that match up with the idea of liberalization, internationalization and foresight can all be incorporated into FEDZ through continuing examination. Moreover, Premier Jiang later mentions on August 14th, that FEDZ is a crucial task for the government at this moment. He thus requests the Ministry of Economic Affairs, Ministry of Transportation and Communications, Ministry of Health and Welfare, and the Council of Agriculture, to enhance the training and service quality of staffers of the single service window of furtherance of FEDZ. Moreover, Premier Jiang additionally indicated in November, that the scope of the FEDZ will include Pingtung Agricultural Biotechnology Park and Kaohsiung Free Trade Port Area. The combination of the two will facilitate adding value to the agriculture in Taiwan and put momentum into quality agriculture, making the high-quality agricultural products of our country being sold to all over the world with swift logistic services. Premier Jiang also mentioned, that in order to avoid Taiwan being marginalized amid regional integrations of global economies, the government is facilitating industries of potentials by proactively promote the FEDZ. The current approach is to expend the original free trade port area with legislative bases, creating the demonstration zones of free economy by combing original establishments such as Pingtung Agricultural Biotechnology Park. If this approach and system is proved feasible, the next step would be promoting it to island-wide, making the whole nation open-up. IV.Conclusion In the past decade, the economic development in Taiwan, compared to neighboring economic zones such as Hong Kong, Korean or Singapore, was indeed stagnant. It is thus a positive move for the government to put great efforts in promoting FEDZ, in the hope that the liberalization and internationalization of the economy of this country can therefore be significantly improved. Yet, some commentators are of slightly more skeptical opinions, reminding that in terms of the tax relaxation in the Plan, similar approach was already taken by the government before, which did not lead to the expected outcome. In sum, it still remains as a continuing task for us and for the administration as well, to ponder on how Taiwan can find out its own unique strength in the face of global competition. How we can attract more international partners, to create mutual economic benefits. The FEDZ is undoubtedly a first step. Nevertheless, challenges are still ahead of the government, as to how to take many more steps in the future, in order to make Taiwan to march on the stage of the world again.
Brief Introduction to Taiwan Social Innovation PoliciesBrief Introduction to Taiwan Social Innovation Policies 2021/09/13 1. Introduction The Millennium Development Goals (MDGs)[1] set forth by the United Nations in 2000 are carried out primarily by nations and international organizations. Subsequently, the Sustainable Development Goals (SDGs) set forth by the United Nations in 2015 started to delegate the functions to organizations of all levels. Presently, there is a global awareness of the importance of balancing “economic growth”, “social progress”, and “environmental protection” simultaneously during development. In the above context, many similar concepts have arisen worldwide, including social/solidarity economy, social entrepreneurship and social enterprise, and social innovation. Generally, social innovation aims to alter the interactions between various groups in society through innovative applications of technology or business models, and to find new ways to solve social problems through such alterations. In other words, the goal is to use innovative methods to solve social problems.The difference between social innovation and social enterprise is that social enterprise combines commercial power to achieve its social mission under a specific perspective, while social innovation creates social value through cooperation with and coordination among technology, resources, and communities under a diversified nature. 2. Overview of Taiwan Social Enterprise Policy To integrate into the global community and assist in the development of domestic social innovation, Taiwan’s Executive Yuan launched the “Social Enterprise Action Plan” in 2014, which is the first policy initiative to support social enterprises (from 2014 to 2016).Under this policy initiative, through consulting with various ministries and applying methods such as “amending regulations”, “building platforms”, and “raising funds”, the initiative set to create an environment with favorable conditions for social innovation and start-ups. At this stage, the initiative was adopted under the principle of “administrative guidance before legislation” in order to encourage private enterprise development without excessive burden, and avoid regulations restricting the development of social enterprises, such as excessive definition of social enterprises. Moreover, for preserving the original types of these enterprises, this Action Plan did not limit the types of social enterprises to companies, non-profit organizations, or other specific types of organizations. To sustain the purpose of the Social Enterprise Action Plan and to echo and reflect the 17 sustainable development goals proposed in SDGs by the United Nations, the Executive Yuan launched the “Social Innovation Action Plan” (effective from 2018 to 2022) in 2018 to establish a friendly development environment for social innovation and to develop diversified social innovation models through the concept of “openness, gathering, practicality, and sustainability”.In this Action Plan, “social innovation” referred to “social innovation organizations” that solve social problems through technology or innovative business models. The balancing of the three managerial goals of society, environment value, and profitability is the best demonstration of the concept of social innovation. 3. Government’s Relevant Social Enterprise Policy and Resources The ministries of the Taiwan Government have been promoting relevant policies in accordance with the Social Innovation Action Plan issued by the Executive Yuan in 2018, such as the “Registration System for Social Innovation Enterprises” (counseling of social enterprises), the “Buying Power - Social Innovation Products and Services Procurement”, the “Social Innovation Platform” established by the Ministry of Economic Affairs, the “Social Innovation Manager Training Courses”, the “Promoting Social Innovation and Employment Opportunities” administered by the Ministry of Labor, and the “University Social Responsibility Program” published by the Ministry of Education. Among the above policies stands out the measures adopted by the Ministry of Economic Affairs, and a brief introduction of those policies are as follows: i. Social Innovation Platform To connect all resources involved in social issues to promote social innovation development in Taiwan, the Ministry of Economic Affairs established the “Social Innovation Platform”.[2] With visibility through the Social Innovation Platform, it has become more efficient to search for targets in a public and transparent way and to assist with the input of resources originally belonging to different fields in order to expand social influence. As a digital platform gathering “social innovation issues in Taiwan,” the Social Innovation Platform covers multiple and complete social innovation resources, which include the “SDGs Map” constructed on the Social Innovation Platform, by which we can better understand how county and city governments in Taiwan implement SDGs and Voluntary Local Review Reports, and which allow us to search the Social Innovation Database[3] and the registered organizations, by which citizens, enterprises, organizations, and even local governments concerned with local development can find their partners expediently as possible, establish service lines to proactively assist public or private entities with their needs/resources, and continue to enable the regional revitalization organizations, ministries, and enterprises to identify and put forward their needs for social innovation through the function of “Social Innovation Proposals”, which assist social innovation organizations with visibility while advancing cooperation and expanding social influence. In addition, the “Event Page” was established on the Social Innovation Platform and offers functions, such as the publishing, searching, and sorting of events in four major dimensions with respect to social innovation organization, governments, enterprises, and citizens; and encourages citizens, social innovation organizations, enterprises, and governments to devote themselves via open participation to continuously expande the influence of the (Civic Technology) Social Innovation Platform. The “Corporate Social Responsibility Report” collects the corporate social responsibility reports, observes the distribution of resources for sustainable development by corporations in Taiwan, offers filtering functions by regions, keyword, popular rankings, and or SDGs types, and provides contact information and a download function for previous years’ reports, in order to effectively assist social innovation organizations to obtain a more precise understanding of the status quo, needs, and trends with respect to their development of respective products and services. Figure 1: SDGs Map Reference: Social Innovation Platform (https://si.taiwan.gov.tw/) Figure 2: Social Innovation Database Reference: Social Innovation Platform (https://si.taiwan.gov.tw/) Figure 3: Social Innovation Proposals Reference: Social Innovation Platform (https://si.taiwan.gov.tw/) Figure 4: Event Page Reference: Social Innovation Platform (https://si.taiwan.gov.tw/) Figure 5: Corporate Social Responsibility Report Reference: Social Innovation Platform (https://si.taiwan.gov.tw/) ii. Social Innovation Database To encourage social innovation organizations to disclose their social missions, products and services, and to guide society to understand the content of social innovation, and to assist the administrative ministries to be able to utilize such information, the Ministry of Economic Affairs issued the “Principles of Registration of Social Innovation Organizations” to establish the “Social Innovation Database”. Once a social innovation organization discloses the items, such as its social missions, business model, or social influence, it may obtain the relevant promotional assistance resources, including becoming a trade partner with Buying Power (Social Innovation Products and Services Procurement), receiving exclusive consultation and assistance from professionals for social innovation organizations, and becoming qualified to apply to entering into the Social Innovation Lab.Moreover, the Ministry of Economic Affairs is simultaneously consolidating, identifying, and designating the awards and grants offered by the various ministries, policies and measures in respect of investment, and financing and assistance, as resources made available to registered entities. As of 25 May 2021, there were 658 registered social innovation organizations and 96 Social Innovation Partners (enterprises with CSR or ESG resources that recognize the cooperation with social innovation under the social innovation thinking model may be registered as a “Social Innovation Partner”).The public and enterprises can search for organizations registered in the Social Innovation Database through the above-said Social Innovation Platform, the search ability of which advances the exposure of and the opportunities for cooperation with social innovation organizations. Figure 6: Numbers of registered social innovation organizations and accumulated value of purchases under Buying Power Reference: Social Innovation Platform(https://si.taiwan.gov.tw/) iii. Buying Power - Social Innovation Products and Services Procurement In order to continue increasing the awareness on social innovation organizations and related issues and promote responsible consumption and production in Taiwan, as well as to raise the attention of the commercial sector to the sustainability-driven procurement models, the Ministry of Economic Affairs held the first “Buying Power - Social Innovation Products and Services Procurement” event in 2017. Through the award system under the Buying Power, it continues to encourage the governments, state-owned enterprises, private enterprises, and organizations to take the lead in purchasing products or services from social innovation organizations, to provide the relevant resources so as to assist social innovation organizations to obtain resources and to explore business opportunities in the markets, to practice responsible consumption and production, and to promote innovative cooperation between all industries and commerce and social innovation organizations. The aim of the implementation of the Buying Power is to encourage the central and local governments, state-owned enterprises, private enterprises, and non-governmental organizations to purchase products or services from organizations registered in the Social Innovation Database, while prizes will be awarded based on the purchase amounts accumulated during the calculation period. The winners can obtain priority in applying for membership in the Social Innovation Partner Group, with corresponding member services, in the future. Under the Social Innovation Platform, both the amount of purchase awards and the number of applicants for special awards continue to increase.So far, purchases have accumulated to a value of more than NT$1.1 billion (see Figure 6), and more than 300 organizations have proactively participated. iv. Social Innovation Mark In order to promote public awareness of social innovation, the Ministry of Economic Affairs has been charged with the commissioned task of promoting the Social Innovation Mark, and issued “ The Small and Medium Enterprise Administration of the Ministry of Economic Affairs Directions for Authorization of the Social Innovation Mark” as the standard for the authorization of the Social Innovation Mark. Social innovation organizations can use the Mark, through obtaining authorization, to hold Social Innovation Summits or other social innovation activities for promoting social innovation concepts. In order to build the Mark as a conceptual symbol of social innovation, the Ministry of Economic Affairs has been using the Social Innovation Mark in connection with various social innovation activities, such as the Social Innovation Platform, the Buying Power, and the annual Social Innovation Summit. Taking the selection of sponsors of the Social Innovation Summit in 2022 as an example[4], only organizations that have obtained authorization of the Social Innovation Mark can use the Mark to hold the Social Innovation Summit. Figure 7: The Social Innovation Mark of the Small and Medium Enterprise Administration, Ministry of Economic Affairs IV. Conclusion The “Organization for Economic Cooperation and Development” (OECD) regards social innovation as a new strategy for solving future social problems and as an important method for youth entrepreneurship and social enterprise development.Taiwan’s social innovation energy has entered a stage of expansion and development. Through the promotion of the “Social Innovation Action Plan,” the resources from the central and local governments are integrated to establish the Social Innovation Platform, the Social Innovation Database, the Social Innovation Lab, and the Social Innovation Mark. In addition, incentives such as the Buying Power have been created, manifesting the positive influence of Taiwan’s social innovation. [1] MDGs are put forward by the United Nations in 2000, and are also the goals requiring all the 191 member states and at least 22 international organizations of the United Nations to be committed to on their best endeavors, including: 1. eradicating extreme poverty and hunger, 2. applying universal primary education, 3. promoting gender equality and empowering women, 4. reducing child mortality rates, 5. improving maternal health, 6. combatting HIV/AIDS, malaria, and other diseases, 7. ensuring environmental sustainability, and 8. establishing a global partnership for development. [2] Please refer to the Social Innovation Platform: https://si.taiwan.gov.tw/. [3] Please refer to the Social Innovation Database: https://si.taiwan.gov.tw/Home/Org_list. [4] Please refer to the guidelines for the selection of sponsors of the 2022 Social Innovation Summit: https://www.moeasmea.gov.tw/files/6221/4753E497-B422-4303-A8D4-35AE0B4043A9
New Version of Personal Information Protection Act and Personal Information Protection & Administration SystemI.Summary In 1995, the Computer-Processed Personal Data Protection Law was implemented in the Republic of China. With the constant development of information technology and the limitations in the application of the legislation, the design of the original legal system is no longer consistent with practical requirements. Considering the increasing number of incidents of personal data leaks, discussions were carried out over a long period of time and the new version of the Personal Information Protection Act was passed after three readings in April, 2010. The title of the law was changed to Personal Information Protection Act. The new system has been officially implemented since 1 October, 2012. The new Act not only revised the provisions of the law in a comprehensive way, but also significantly increased the obligations and responsibilities of enterprises. In terms of civil liability, the maximum amount of compensation for a single incident is 200 Million NTD. For domestic industries, how to effectively respond to the requirements under the Personal Information Protection Act and adopt proper corresponding measures to lower the risk has become a key task for enterprise operation. II. Main Points 1. Implementation of the Enforcement Rules of the Personal Information Protection Act Personal information protection can be said the most concerned issue in Taiwan recently. As a matter of fact, the Computer-Processed Personal Data Protection Law was established in Taiwan as early as August 1995. After more than 10 years of development, computer and information technology has evolved significantly, and many emerging business models such as E-commerce are extensively collecting personal data. It has become increasingly important to properly protect personal privacy. However, the previous Computer-Processed Personal Data Protection Law was only applicable to certain industries, i.e. the following 8 specific industries: the credit investigation business, hospital, school, telecommunication business, financial business, securities business, insurance business, and mass media. And other business was designated by the Ministry of Justice and the central government authorities in charge of concerned enterprises. In addition, the law only protected personal information that was processed by “computer or automatic equipment”. Personal information that was not computer processed was not included. There were clearly no sufficient regulations for the protection of personal data privacy and interest. There were numerous incidents of personal data leaks. Among the top 10 consumer news issued by the Consumer Protection Committee of the Executive Yuan in 2007, “incidents of personal data leaks through E-commerce and TV shopping” was on the top of the list. This provoked the Ministry of Justice and the Ministry of Economic Affairs to “jointly designate” the retail industry without physical boutique (including 3 transaction models: online shopping, catalogue shopping and TV shopping) to be governed by the Computer-Processed Personal Data Protection Law since 1 July 2010. To allow the provisions of the personal information protection legal system to meet the environment of rapid change, the Executive Yuan proposed a Draft Amendment to the Computer-Processed Personal Data Protection Law very early and changed the title to the Personal Information Protection Act. The draft was discussed many times in the Legislative Yuan. Personal Information Protection Act was finally passed after three readings in April 2010, which was officially published by the Office of the President on 26 May. Although the new law was passed in April 2010, to allow sufficient time for enterprises and the public to understand and comply the new law, the new version of the personal information protection law was not implemented on the date of publication. In accordance with Article 56 of the Act, the date of implementation was to be further established by the Executive Yuan. After discussions over a long period of time, the Executive Yuan decided for the Personal Information Protection Act to be officially implemented on 1 October 2012. However, the implementation of two articles is withheld: Article 6 of the Act about the principal prohibition against the collection, processing and use of special personal information and Article 54 about the obligation to notice the Party within one year for personal information indirectly acquired before the implementation of the new law. In terms of the personal data protection legal system, other than the most important Personal Data Protection Act, the enforcement rules established in accordance with the main law also play a key role. The previous Enforcement Rules of the Computer-Processed Personal Data Protection Law were published and implemented on 1 May, 1996. Considering that the Computer-Processed Personal Data Protection Law was amended in 2010 and that its title has been changed to the Personal Data Protection Act, the Ministry of Justice also followed the amended provisions under the new law and actively studied the Draft Amendment to the Enforcement Rules of the Computer-Processed Personal Data Protection Act. After it was confirmed that the new version of the Personal Data Protection Act would be officially launched on 1 October 2012, the Ministry of Justice announced officially the amended enforcement rules on 26 September, 2012. The title of the enforcement rules was also amended to the Enforcement Rules of the Personal Data Protection Act. The new version of personal data protection law and enforcement rules was thus officially launched, creating a brand new era for the promotion of personal data protection in Taiwan. II. Personal Data Administration System and Information Privacy Protection Charter Before the amendment to the Personal Data Protection Act was passed, the Legislative Yuan made a proposal to the government in June 2008 to promote a privacy administration and protection certification system in Taiwan, in reference to foreign practices. In August of the following year, the Strategic Review Board of the Executive Yuan passed a resolution to promote the E-Commerce Personal Data Administration and Information Security Action Plan. In December of the same year, approval was granted for the plan to be included in the key government promotion plans from 2010 to 2013. Based on this action plan, since October 2010, the Ministry of Economic Affairs has asked the Institution for Information Industry to execute an E-Commerce Personal Data Administration System Setup Plan. Since 2012, the E-Commerce Personal Data Administration System Promotion Plan and the Taiwan Personal Information Protection and Administration System (TPIPAS) have been established and promoted, with the objective of procuring enterprises to, while complying with the personal data protection legal system, properly protect consumers’ personal information through the establishment of an internal administration mechanism and ensuring that the introducing enterprises meet the requirements of the system. The issuance of the Data Privacy Protection Mark (dp.mark) was also used as an objective benchmark for consumers to judge the enterprise’s ability to maintain privacy. Regarding the introduction of the personal data administration system, enterprises should establish a content administration mechanism step by step in accordance with the Regulations for Taiwan Personal Information Protection and Administration System. Such system also serves as the review benchmark to decide whether domestic enterprises can acquire the Data Privacy Protection Mark (dp.mark). Since domestic enterprises did not have experience in establishing internal personal data administration system in the past, starting 2011, under the Taiwan Personal Information Protection and Administration System, enterprises received assistance in the training of system professionals such as Personal Data Administrators and Personal Data Internal Appraisers. Quality personal data administrators can help enterprises establish complete internal systems. Internal appraisers play the role of confirming whether the systems established by the enterprises are consistent with the system requirements. As of 2012, there are almost 100 enterprises in Taiwan that participate in the training of system staff and a total of 426 administrators and 131 internal appraisers. In terms of the introduction of TPIPAS, in additional to the establishment and introduction of administration systems by qualified administrators, enterprises can also seek assistance from external professional consulting institutions. Under the Taiwan Personal Information Protection and Administration System, applications for registration of consulting institutions became available in 2012. Qualified system consulting institutions are published on the system website. Today 9 qualified consulting institutions have completed their registrations, providing enterprises with personal data consulting services. After an enterprise completes the establishment of its internal administration system, it may file an application for certification under the Taiwan Personal Information Protection and Administration System. The certification process includes two steps: “written review” and “site review”. After the enterprise passing certification, it is qualified to use the Data Privacy Protection Mark (dp.mark). Today 7 domestic companies have passed TPIPAS certification and acquired the dp.mark: 7net, FamiPort, books.com.tw, LOTTE, GOHAPPY, PAYEASY and Sinya Digital, reinforcing the maintenance of consumer privacy information through the introduction of personal data administration system. III. Event Analysis The Taiwan Personal Information Protection and Administration System (TPIPAS) is a professional personal data administration system established based on the provisions of the latest version of the domestic Personal Data Protection Act, in reference to the latest requirements of personal data protection by international organizations and the experience of main countries in promoting personal data administration system. In accordance with the practical requirements to protect personal data by industries, TPIPAS converted professional legal conditions into an internal personal data administration procedure to effectively assist industries to establish a complete and proper personal data administration system and to comply with the requirements of personal data legislations. With the launch of the new version of the Personal Data Protection Act, introducing TPIPAS and acquiring dp.mark are the best strategies for enterprises to lower the risk from the personal data protection law and to upgrade internal personal data administration capability.
Shifting AI Governance in East Asia: AI Legislative Progress in Japan, South Korea and TaiwanShifting AI Governance in East Asia: AI Legislative Progress in Japan, South Korea and Taiwan 2025/09/09 Keywords: artificial intelligence, artificial intelligence regulation I.Introduction The landscape of AI governance in East Asia is changing, with two new AI laws enacted and one on the way. In South Korea, an act titled “the Basic Act on the Development of Artificial Intelligence and the Establishment of Foundation for Trustworthiness“ (“인공지능 발전과 신뢰 기반 조성 등에 관한 기본법”, henceforth referred to as “South Korea’s AI Act” or “SKAIA”)[1]was approved on December 26[2], 2024 and promulgated on January 21, 2025. The AI Basic Act is designed to establish a national AI governance framework and systematically foster the AI industry while preventing potential AI risks.[3]A few months later, Japan’s first law regulating AI was passed by the National Diet on May 28, 2025. The new law is titled "the Act on Promotion of Research and Development, and Utilization of AI-related Technology" (“人工知能関連技術の研究開発及び活用の推進に関する法律”, henceforth referred to as "Japan's AI Act" or "JAIA")[4], which reflects the strong will of the government to catch up in the global AI race.[5] Elsewhere in the region, Taiwan’s Executive Yuan finally passed its draft AI Basic Act (“人工智慧基本法草案”) on August 28[6] [7], which must now be submitted to the Legislative Yuan for deliberation. The government hopes the new law will lay the foundation for establishing Taiwan as an AI island and a key driving force in global AI development.[8] This article will give a quick overview of the key features of the three new AI regulations to illustrate the new landscape these countries are shaping in AI governance. II.Key features of Japan’s AI Act (JAIA) 1.Purpose and principles of JAIA Given Japan's lagging AI development and rising public concerns, JAIA reflects the government's worry about falling behind global peers in AI investment and adoption.[9] It is believed that new laws are needed in addition to existing laws and regulations to promote innovation and address risks.[10] Hence JAIA aims to advance the R&D and application of AI through the formulation of basic principles and plans, and the establishment of an "AI Strategic Headquarters".[11] JAIA establishes basic principles for the promotion of the R&D and application of AI-related technologies[12], including enhancing industry R&D capabilities and competitiveness, systematically promoting AI collaboration from research to application with transparency, and enabling Japan to shape global norms through international cooperation.[13] 2.Industry Development and Promotion JAIA requires the government to develop a National AI Basic Plan, in accordance with the basic principles, to promote the R&D and application of AI. The AI Basic Plan should set out fundamental policy guidelines and measures to comprehensively and systemically advance the R&D and application of AI-related technologies, along with other necessary provisions.[14] JAIA also specifies basic measures to be included in the plan, which cover issues of promotion of R&D, expansion and sharing of facilities and data, human resources and education, international engagement in AI norm setting, and domestic guidelines making. In addition, the government should monitor AI technology trends and analyze cases of rights violations from improper AI use to develop countermeasures and provide guidance accordingly.[15] 3.Governance JAIA stipulates that an AI Strategy Headquarters should be established under the Cabinet, composed of all cabinet members and headed by the Prime Minister.[16] The AI Strategic Headquarters is tasked with comprehensively and systematically advancing AI-related technology R&D and application policies, including the formulation, promotion, and implementation of AI Basic Plans and other related initiatives.[17] The Act also empowers the AI Strategy Headquarters to invite stakeholders to provide information, opinions or explanations, and other necessary assistance.[18] 4.Risk managements and rights protection JAIA does not impose direct compliance obligations, but AI companies and research institutions are required to cooperate with government investigations and follow government guidance in cases involving violations of human rights and interests.[19] 5.Implementation of JAIA and Follow-up Work JAIA came into force in May 2025. The Japanese government is required to develop guidelines that align with international standards and launch the Strategic Headquarters for the preparation and implementation of the National AI Basic Plan. III.Key features of the South Korea’s AI Act (SKAIA) 1.Purpose and principles of SKAIA SKAIA is designed to establish a foundation for AI development and trustworthiness, increasing citizens’ rights and interests protection, quality of life, and the country’s competitiveness.[20] It focuses on advancing national AI collaboration to foster a flourishing AI sector and developing legal frameworks to mitigate risks.[21] Accordingly, the Act establishes basic AI development principles: prioritizing safety and reliability to improve quality of life, and ensuring those affected by AI output receive clear, meaningful explanations within reasonable parameters.[22] 2.Industry development and promotion Supporting AI technology and industry development is a key feature of SKAIA. It establishes comprehensive measures covering technology development, industry revitalization, SME support, industrial foundations, talent cultivation, regulatory adaptation, and international cooperation.[23] 3.Governance SKAIA also strengthens the institutional framework for AI governance. The Ministry of Science and ICT (henceforth referred to as “MSIT”) is mandated to execute an AI Master Plan every three years and empowered to investigate violations, require corrective action, and impose fines on non-compliant entities.[24] The National AI Committee is authorized to review and decide on the AI Master Plan and AI-related matters, making it the highest decision-making body for South Korea's AI policies. It is composed of the heads of central administrative agencies and civilian AI experts appointed by the president.[25] SKAIA also establishes the AI Policy Center to support MSIT on AI policy formulation, and the AI Safety Institute for AI safety matters.[26] 4.Risk management and rights protection SKAIA imposes specific obligations on operators of high-impact AI and generative AI systems. All operators must ensure system transparency and safety, while high-impact AI operators face additional responsibilities including conducting fundamental rights impact assessments.[27] High-impact AI systems are defined as AI systems that have a significant impact on or may pose a risk to human life, safety, and fundamental rights and are mainly utilized in critical infrastructure sectors and human rights-sensitive areas, or other areas specified by presidential decree.[28] The procedure for determining whether an AI system qualifies as high-impact AI will be established through subordinate legislation.[29] 5.Implementation of SKAIA and Follow-up Work SKAIA will come into effect on January 1, 2026 and the formulation of subordinate statutes that detail enforcement mechanisms and guidelines should be expedited. However, domestic critics argue that corporate obligation provisions may hinder AI development and advocate for postponing their implementation.[30] Actually, an amendment to the Act was proposed in April 2025, seeking such a postponement along with a three-year grace period.[31] IV. Key features of Taiwan’s draft AI Basic Act 1.Purpose and Principles of the draft AI Basic Act[32] Taiwan adopts a relatively conservative approach to AI policy and measures to boost industrial development have long occupied the agenda of AI governance. Given that AI is a crucial technology for national development, the draft AI Basic Act (henceforth referred to as "the draft Act") seeks to ensure that AI technology develops vigorously in a human-centered approach, encourage innovation while considering human rights, and safeguard Taiwan’s national sovereignty and cultural values.[33] Hence, the draft Act establishes seven guiding principles in line with international norms, which are sustainability, human autonomy, privacy protection and data governance, security, transparency and explainability, fairness and accountability.[34] 2.Industry Development and Promotion It is the government’s responsibility to promote the R&D and application of AI and construct the infrastructure needed.[35] In order to facilitate AI innovations, competent authorities may provide a controlled environment for testing and validating AI innovation products and services before they are released to the market or put into use.[36] Considering the wide scope of AI application and development, the government is encouraged to collaborate with the private sector, including through public-private partnerships, and should promote international cooperation on AI matters.[37] The government should also continue to comprehensively promote AI education at all levels to enhance the public's AI literacy.[38] Data is crucial for AI development, so the draft Act mandates the government to establish mechanisms to enhance data availability, and measures to facilitate AI outputs that maintain the country's multicultural values, and protect intellectual property rights.[39] 3.Risk Management and Rights Protection (1) Risk Management The draft Act includes several provisions addressing AI risks. The government should take steps to prevent AI from being used for illegal purposes. For example, Ministry of Digital Affairs (MODA) and other relevant agencies may provide or recommend tools or methods for AI evaluation and verification to avoid misuse of AI.[40] Secondly, MODA is mandated to foster an AI risk classification framework, based on which sectoral competent authorities should establish risk-based tiered management standards.[41] Thirdly, the government may, through binding regulations or non-binding administrative guidance, promote safety standards, verification, transparent and explainable traceability, or accountability mechanisms to enhance the trustworthiness of AI development and application.[42] Lastly, the government should clarify the ownership and conditions of liability for high-risk AI applications and establish relevant mechanisms for relief, compensation or insurance to protect affected parties.[43] However, AI application responsibility norms would not apply to pre-release activities in order to support technological innovation.[44] [45] (2) Rights Protection The draft Act concerns not only the privacy rights of individuals but also labor rights. The government should ensure the protection of personal data used throughout the AI lifecycle on the one hand[46] , and also protect workers' rights and provide necessary assistance to help them adapt to technological changes, especially those who have lost their jobs due to AI use.[47] 4.Governance and Implementation Despite the heated debate regarding the designation of a dedicated AI regulatory authority in the country, the Executive Yuan decided against establishing such an authority, given AI's cross-ministerial nature. Relevant competent authorities will be responsible for formulating implementing regulations and guidelines and the Executive Yuan will continue to guide relevant agencies and departments at all levels through the existing Digital Legal Coordination Meeting to facilitate the development of AI.[48] V.Analysis and conclusion Japan, South Korea and Taiwan all seek to maintain the countries' momentum in promoting AI development through AI legislation. The three parties all emphasize trustworthy AI, though they actually place greater emphasis on AI development. They share considerable common ground in the policies to foster AI industry development, such as promoting AI R&D and application and supporting infrastructure-building, and diverge in their approaches to addressing potential AI-related risks and governance structure. Japan adopts a ‘light touch’ regulatory approach to AI regulation, maintaining coherent policy coordination that responds to domestic imperatives and global trends without imposing regulatory burdens on industries.[49] The country favors a soft approach with governmental guidance. In contrast, South Korea incorporates regulatory provisions specifically targeting high-impact AI systems in its AI Basic Act, seeking to balance between enhancing national competitiveness through AI and mitigating potential risks stemming from AI misuse, though this approach actually faces some domestic opposition currently. Taiwan adopts an approach similar to Japan's. The draft AI Basic Act avoids imposing regulatory obligations, and the government will prioritize AI verification and evaluation mechanisms to ensure trustworthy AI development. Regarding governance approaches, both Japan and South Korea seek to strengthen governmental AI governance functions through legislation, with Japan establishing an AI Strategic Headquarters and South Korea creating an AI Committee, both operating under their respective Cabinets. In contrast, Taiwan's draft AI Basic Act does not address governance structural matters. Given the profound societal transformations that AI technology may bring, all three East Asian countries recognize the importance of sustained AI advancement while acknowledging the critical need to ensure AI safety and trustworthiness to protect human rights. In an era of intense global AI competition, it seems to be the best policy for governments to carefully design AI policies that strike a balance between fostering innovation and safeguarding human rights. This cautious approach is essential as significant challenges remain and AI risks demand comprehensive solutions. Reference: [1] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법（법률 제20676호, 2025. 1. 21, 제정），법제처 국가법령정보센터，https://www.law.go.kr/%EB%B2%95%EB%A0%B9/%EC%9D%B8%EA%B3%B5%EC%A7%80%EB%8A%A5%20%EB%B0% 9C%EC%A0%84%EA%B3%BC%20%EC%8B%A0%EB%A2%B0%20%EA%B8%B0%EB%B0%98%20%EC%A1%B0%EC% 84%B1%20%EB%93%B1%EC%97%90%20%EA%B4%80%ED%95%9C%20%EA%B8%B0%EB%B3%B8%EB%B2%95/(206 76,20250121) （最後瀏覽日：2025/09/11）。 [2] A New Chapter in the Age of AI: Basic Act on AI Passed at the National Assembly‘s Plenary Session, Ministry of Science and ICT, https://www.msit.go.kr/eng/bbs/view.do?sCode=eng&mId=4&mPid=2&pageIndex=&bbsSeqNo=42&nttSeqNo=1071&searchOpt=ALL&searchTxt= (last visited Sept. 11, 2025). [3] A New Chapter in the Age of AI: Basic Act on AI Passed at the National Assembly‘s Plenary Session, Ministry of Science and ICT, https://www.msit.go.kr/eng/bbs/view.do?sCode=eng&mId=4&mPid=2&pageIndex=&bbsSeqNo=42&nttSeqNo=1071&searchOpt=ALL&searchTxt= (last visited Sept. 11, 2025). [4] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号），e-Gov法令検索，https://laws.e-gov.go.jp/law/507AC0000000053（最後瀏覽日：2025/09/11）。 [5] CABINET OFFICE, GOVERNMENT OF JAPAN, Outline of the Act on Promotion of Research and Development, and Utilization of AI-related Technology (AI Act), https://www8.cao.go.jp/cstp/ai/ai_hou_gaiyou_en.pdf (last visited Sept. 11, 2025). [6] 〈政院通過「人工智慧基本法」草案 建構AI發展與應用良善環境 打造臺灣成為AI人工智慧島〉，行政院，https://www.ey.gov.tw/Page/9277F759E41CCD91/5d673d1e-f418-47dc-ab35-a06600f77f07（最後瀏覽日：2025/09/09）。 [7] There are other AI bills brought up by legislators in the Legislative Yuan. The purpose of this article is to analyze the AI governance priorities of the governments of Japan, South Korea, and Taiwan; therefore, other AI bills proposed by legislators are not included in the discussion. [8] 蘇文彬，〈行政院通過AI基本法草案，將不設立AI專責機關〉，iThome，2025/08/28，https://www.ithome.com.tw/news/170874 (最後瀏覽日：2025/09/09)。 [9] Japan’s AI Bill Advances Toward Enactment, Connect on Tech (May 27, 2025), https://connectontech.bakermckenzie.com/japans-ai-bill-advances-toward-enactment/ (last visited Sept. 9, 2025). [10] 松尾剛行，〈【2025年施行】AI新法とは？AIの研究開発・利活用を推進する法律を分かりやすく解説！〉，Keiyaku-Watch，https://keiyaku-watch.jp/media/hourei/2025-ai-law/（最後瀏覽日：2025/09/11）。 [11] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第1条。 [12] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第3条。 [13] Japan Enacts AI Promotion Act: Overview and Implications for Businesses, Zelo Law Square (May, 2025), https://zelojapan.com/en/lawsquare/56899 (last visited Sept. 9, 2025). [14] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第18条。 [15] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第11-17条。 [16] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第19、21-24条。 [17] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第20条。 [18] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第25条。 [19] 人工知能関連技術の研究開発及び活用の推進に関する法律（令和7年法律第53号）第16条。 [20] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제1조。 [21] The Korean AI Basic Act: Asia’s First Comprehensive Framework on AI, Lexology (Mar. 17, 2025), https://www.lexology.com/library/detail.aspx?g=f91ff0fb-94ed-4aa9-b667-65d6206a7227 (last visited Sept. 9, 2025). [22] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제3조。 [23] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제13-26조。 [24] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제40조。 [25] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제7조。 [26] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제6-12조。 [27] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제31-32조。 [28] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제4조。 [29] 인공지능 발전과 신뢰 기반 조성 등에 관한 기본법，제33조。 [30] Seungmin (Helen) Lee, South Korea’s Evolving AI Regulations, Stimson (June 12, 2025), https://www.stimson.org/2025/south-koreas-evolving-ai-regulations/ (last visited Sept. 9, 2025). [31] 〈인공지능 발전과 신뢰 기반 조성 등에 관한 기본법 일부개정법률안〉，대한민국국회，https://likms.assembly.go.kr/bill/bi/billDetailPage.do?billId=PRC_N2M5K0S3R2R0Q1O3X5X1W1U1T7P3Q6&currMenuNo=2600044（最後瀏覽日：2025/09/09）。 [32] 〈政院通過「人工智慧基本法」草案 建構AI發展與應用良善環境 打造臺灣成為AI人工智慧島〉，行政院，https://www.ey.gov.tw/Page/9277F759E41CCD91/5d673d1e-f418-47dc-ab35-a06600f77f07（最後瀏覽日：2025/09/09）。 [33] 人工智慧基本法草案第1條。 [34] 人工智慧基本法草案第3條。 [35] 人工智慧基本法草案第4條。 [36] 人工智慧基本法草案第5條。 [37] 人工智慧基本法草案第6條。 [38] 人工智慧基本法草案第7條。 [39] 人工智慧基本法草案第14條。 [40] 人工智慧基本法草案第8條。 [41] 人工智慧基本法草案第9條。 [42] 人工智慧基本法草案第10條。 [43] 人工智慧基本法草案第11條。 [44] 人工智慧基本法草案第11條。 [45] See also: Taiwan Rolls Out Draft Artificial Intelligence Law, OCACNEWS, July 18, 2024, https://ocacnews.net/article/374412 (last visited Sept. 3, 2025). [46] 人工智慧基本法草案第14條。 [47] 人工智慧基本法草案第12條。 [48] 蘇文彬，〈行政院通過AI基本法草案，將不設立AI專責機關〉，iThome，2025/08/28，https://www.ithome.com.tw/news/170874 (最後瀏覽日：2025/09/09)。 [49] Sun Ryung Park, Less Regulation, More Innovation in Japan’s AI Governance, East Asia Forum (May 21, 2025), https://eastasiaforum.org/2025/05/21/less-regulation-more-innovation-in-japans-ai-governance/ (last visited July 4, 2025).
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