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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）

 

 

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※Introduction to the “Public Procurement for Startups” mechanism,STLI, https://stli.iii.org.tw/en/article-detail.aspx?no=55&tp=2&i=168&d=8730 (Date:2025/11/15)
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Lee, Ruei-Yu
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Release： 2025/06
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The Institutionalization of the Taiwan Personal Data Protection Committee - Triumph of Digital Constitutionalism: A Legal Positivism Analysis

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By analyzing the PDPC's function and authority in the context of legal positivism, we understand its role as a regulatory body to maintain order and uphold the principles of legal positivism. The institutionalization of the PDPC serves as a milestone in Taiwan's commitment to protect individuals' personal data and safeguard the digital rights. In essence, the institutionalization of the Taiwan Personal Data Protection Committee represents a triumph of digital constitutionalism, where individuals' rights and interests are safeguarded, and power imbalances are rectified. It also embodies the recognition of the paradox of freedom and the need for responsible governance in the digital age in Taiwan. Reference: [1] Lin Ching-yin & Evelyn Yang, Bill to establish data protection agency clears legislative floor, CNA English News, FOCUS TAIWAN, May 16, 2023, https://focustaiwan.tw/society/202305160014 (last visited, July 13, 2023). [2] Legal positivism, Stanford Encyclopedia of Philosophy, https://plato.stanford.edu/entries/legal-positivism/?utm_source=fbia (last visited July 13, 2023). [3] Edoardo Celeste, Digital constitutionalism: how fundamental rights are turning digital, (2023): 13-36, https://doras.dcu.ie/28151/1/2023_Celeste_DIGITAL%20CONSTITUTIONALISM_%20HOW%20FUNDAMENTAL%20RIGHTS%20ARE%20TURNING%20DIGITAL.pdf (last visited July 3, 2023). [4] GIOVANNI DE GREGORIO, DIGITAL CONSTITUTIONALISM IN EUROPE: REFRAMING RIGHTS AND POWERS IN THE ALGORITHMIC SOCIETY 218 (2022). [5] Celeste Edoardo, Digital constitutionalism: how fundamental rights are turning digital (2023), https://doras.dcu.ie/28151/1/2023_Celeste_DIGITAL%20CONSTITUTIONALISM_%20HOW%20FUNDAMENTAL%20RIGHTS%20ARE%20TURNING%20DIGITAL.pdf (last visited July 13, 2023). [6]JOHN STUART MILL,On Liberty (1859), https://openlibrary-repo.ecampusontario.ca/jspui/bitstream/123456789/1310/1/On-Liberty-1645644599.pdf (last visited July 13, 2023). [7] Legal positivism, Stanford Encyclopedia of Philosophy, https://plato.stanford.edu/entries/legal-positivism/?utm_source=fbia (last visited July 13, 2023). [8] Lin Ching-yin & Evelyn Yang, Bill to establish data protection agency clears legislative floor, CNA English News, FOCUS TAIWAN, May 16, 2023, https://focustaiwan.tw/society/202305160014 (last visited, July 13, 2023).

Innovative Practice of Israel's Government Procurement

Innovative Practice of Israel's Government Procurement 　　Government procurement is an important pillar of government services. Because of the huge number of government purchases, government procurement management play an important role in promoting public sector efficiency and building citizenship. Well-designed government procurement systems also help to achieve policy such as environmental protection, innovation, start-ups and the development of small and medium-sized enterprises. 　　Nowadays, countries in the world, especially OECD countries, have been widely practiced with innovative procurement to stimulate innovation and start-ups, and call Innovation procurement can deliver solutions to challenges of public interest and ICTs can play a major role in this. However, in the OECD countries, in addition to the advanced countries that have been developed, many developing countries have also used government procurement to stimulate national R & D and innovation with remarkable results. Israel is one of the world's leading technology innovation centers, one of the most innovative economies in the world, continues to leverage its own strengths, support of technology entrepreneurship and unique environment, an international reputation in the high-tech industry, the spirit of technological innovation and novelty. 　　Government procurement is a core element of the activities of Israeli government, agreement with suppliers and compliance with the Mandatory Tenders Law. The main challenge is how to ensure efficiency and maintain government performance while ensuring an equitable and transparent procurement process. Israel’s Mandatory Tenders Law has shown the central role played by the Israeli Supreme Court in creating and developing this law, even in the absence of any procurement legislation, based instead on general principles of administrative law. Once the project of creating a detailed body of public tendering law had been completed, and the legislator was about to step in, the Supreme Court was prepared to step out and transferring the jurisdiction to lower courts. The Knesset passed the Mandatory Tenders Law, and based on it the Government issued the various tendering regulations. Besides, Israel's various international agreements on government procurement, mainly GPA and other bilateral international agreements such as free trade agreements with Mexico and Colombia and free trade agreements and memoranda of understanding with the United States. The practical significance of these commitments can only be understood on the backdrop of Israel’s domestic preference and offset policies. These policies were therefore discussed and analyzed as they apply when none of the international agreements applies. 　　The Challenge Tenders "How to solve the problem of overcrowding in the emergency department and the internal medicine department?" is the first of a series of "problem solicitations" released by the Israeli Ministry of Health which seeks to find a digital solution to the public health system problem, questions from the government while avoiding preconceived prejudices affect the nature of the solution, allowing multiple innovative ideas from different fields to enter the health system, make fair and transparent judgments about the ideal solution to the problem. In order to ensure transparency and integrity, equality, efficiency and competition in the decision-making process, the tender proposed by the Israeli Ministry of Health defines a two-stage tender process. The Ministry of Health of Israel, in order to improve the quality of medical care, shorten the waiting time for hospitalized patients, protect the dignity of patients and their families with patients as its center, and ensure their rights, while alleviating the burden of hospital staff, so as to pass the targeted treatment areas reduce the gap between various residential areas. The Israeli government deals with these issues through challenging tenders and offers a digital solution combined with innovative ideas. The initiative proposed through the development of public service projects can raise the level of public services in the country and help the government to reduce costs and achieve the purpose of promoting innovation with limited conceptual, technical and financial capabilities. In addition, due to the online operation of the challenging tender process throughout the entire process, fair and transparent procedures can be ensured, while public-private partnerships are encouraged to facilitate the implementation of the implementation plan.

Executive Yuan Promotes Free Economic Demonstration Zone

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.

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