Sep 28, 2020
Post-Pandemic Deployment of Industrial Transformation Capacities
Due to the impact of the pandemic on the global economy, recessionary pressures are fierce, consumer purchasing power is shrinking considerably in all countries, and financial risks are mounting. In the face of this economic crisis and recession, governments all over the world have successively adopted relief policies to shorten economic recovery times. The Taipei City Government has implemented various relief measures at the beginning of the year. Policy tools and relief resources are utilized to assist enterprises in the transformation process, facilitate the development of innovative, zero-contact business models, and enhance their competitiveness in the field of cross-border e-commerce, with the ultimate goal of warding off the impact of the pandemic by joining hands with local businesses. In preparation for the post-pandemic era, the city government continues to optimize digital service offerings and expands data access and application in the field of municipal administration to accelerate the transition of a future government with a digital ecosystem. In the latter half of the year, a series of industrial transformation forums will be organized to identify the “new normal” of future industrial development in cooperation with local enterprises.
In the first half of 2020, COVID-19 had a massive impact on the global economy. Supply was disrupted, private consumption shrank, financial markets were volatile, industries were deeply affected, and consumer lifestyles saw significant changes. As the pandemic gradually comes under control, all industries are fully committed to recovery and transformation. Taipei City Government organized a series of discussion forums on industrial transformation in the post-pandemic era starting on July 6 to gain a better grasp of post-pandemic industry opportunities. The first forum titled “Head Start in Transformations and Reshaping of Industries in a New Age - 2020 Taipei Post-Pandemic Economic Transformation Forum” was held by the Department of Economic Development. The forum focused on the following themes: “New Business Models under Digital Transformation,” “Smart Payment Accelerates the Popularization of Smart Retail,” “a Paradigm Shift of Zero-Contact Economy,” and “Talents for Building a New Vision of the Capital.” Benchmark businesses and experts in the fields of innovative business models and digital transformation were invited to share their insights on how to utilize new technologies and creativity to form new paradigms of industrial transformation. And these discussions and exchanges served the purpose of transmitting successful models of digital transformation and strengthening the business structures of enterprises. The COVID-19 crisis is viewed as a turning point and a fresh start on the steady road toward transformation and upgrades. This forum was simultaneously held on-site and via livestream. After the forum, exciting contents were available to businesses viewing or sharing online without restrictions of time and space.
Zero-contact economy bears great promise
The Taipei business sector is mainly composed of small- and medium-sized enterprises with wholesale and retail, one of the hardest-hit industries by COVID-19 in terms of turnover. Other industries such as the manufacturing sector, the transportation and storage sector, the support service activities sector, and the hospitality and catering sectors were also seriously affected by COVID-19. Ministry of Labor statistics reveal that over 1,500 enterprises in Taipei City implemented furloughs and unpaid leaves between March and the end of July this year. According to statistics released by the Taipei City Office of Commerce, a sharp decline in visitor numbers in the city’s shopping districts has resulted in a drop of 50-90% in average spending. The adoption of transformation or more flexible business models therefore represents a pressing task for all industries. Spurred by progress in the field of hard- and software and the integration of smartphones and platforms, in particular, food delivery platforms have seen a meteoric rise. Due to the intense impact of COVID-19, restaurants cooperating with food delivery platforms have been popping up like mushrooms after a warm summer rain. Even virtual kitchens have quietly emerged and new revolutionary business models transcending the traditional catering industry have sprung up in an imposing manner. Under the shroud of COVID-19, the online-shopping industry chain and online-shopping platforms have seen even more robust revenue growth against all odds. Numerous sales channel businesses and small vendors have rapidly shifted their focus to the e-commerce market in a quest for survival in response to epidemic prevention measures including crowd control and social distancing.
The Taipei City Government has made a long-term commitment to building an optimized hard- and software environment to foster the e-commercialization of stores through the accelerated promotion of e-payment methods, the adoption of hard- and software technologies, and the facilitation of e-commerce cross-border development. In the past, the city government made an all-out effort to promote different forms of e-payment in over 3,000 consumption places in shopping districts, markets, underground malls, schools, and hospitals. Stores and consumers were encouraged to choose e-payment methods. “Easy Wallet,” which was officially launched in March of this year served as a further catalyst. As a result of past promotion efforts, stores and the public are more familiar with these new payment methods, which in turn has helped reduce physical contact for payment processes during this pandemic. In response to COVID-19, the government has recently encouraged food court vendors and restaurants in department stores to cooperate with food delivery platforms. Various promotions and discounts have been adopted to assist thousands of such businesses to increase their revenues through the utilization of food delivery services. To further entrench the use of e-payment methods, Taipei Mayor Ko Wen-Je announced in a meeting that Taipei First Girls High School will serve as a demonstration site for cashless transactions. E-payment will be fully implemented for all transactions ranging from tuitions and miscellaneous fees to book purchases and ordering meals, with the ultimate goal of spreading the habit of using e-payment methods through the younger generation.
n addition, the city government established TAIPEI Cross-Border eCommerce Service Center on May 22 to give foreign trade businesses a better grasp of new business opportunities and assist them in business strategy adjustments during COVID-19. The government enlisted over 20 e-commerce, logistics, cash flow, and testing businesses for the provision of full-link one-stop services including consultation & diagnosis, corporate training, industry-academia collaboration, and integration of business opportunities through public-private sector partnership. Enterprises receive assistance in finding required resources, expanding into international markets, increasing export order volumes, and selling products to all over the world based on their needs in different dimensions. In 2017, the city government started to build a cross-border e-commerce service system. It not only provides consultation services and industry-academia collaboration matching but also organizes large-scale discussion forums. Over the past three years, more than 2,000 enterprises and 500 students have received relevant services and training. The ultimate goal is to enable a rising number of businesses to shift their attention to international markets and pursue overseas business opportunities with the aid of more diversified services provided by the TAIPEI Cross-Border eCommerce Service Center.
Provision of innovation and transformation resources and talent training
The digital transformation process has been in progress for over a decade. A large number of enterprises embrace new technologies in the pursuit of digitization of corporate operations. The training of talent capable of innovative thinking is a key factor in this process. Over many years, the city government has been actively committed to startup incentives and subsidies, talent training, expansion of entrepreneurship space, and provision of experimental sites through concrete action to provide support for enterprises in digital transformation processes and create a climate conducive to innovation and entrepreneurship. From the inception of the Project of Subsidies & Incentives for the Taipei Industry (SITI) in March 2011 until June 2020, a total of 1,722 enterprises had received subsidies and incentives exceeding NT$ 1.9 billion. No other local government in Taiwan invested more in the area. A total of NT$ 40 million in subsidies have been granted for 25 projects in the fields of 5G, AR, and VR. Industry-academia collaboration, vocational training, and online courses are offered to foster the training of talent in emerging digital fields. In this discussion forum, participants gained a better understanding of the importance of a digital mindset on the part of employees and sensitivity to different types of data as a key element of talent training during the process of continued promotion of corporate digital transformation. Enterprises should foster a climate of autonomous learning internally and encourage employees to embrace the concept of lifelong learning to enable them to maximize their capabilities in an era of constant changes and jointly guide the enterprise in tackling the challenges of the digital age.
The Taipei City Government actively searches for idle public spaces and activates various startup hubs to lower the threshold for entrepreneurship. By the end of August 2020, a total of 23 sites had been selected and 10 of these sites had been put into operation. It is planned this year to launch an AI+ADAS+AVR educational base and 4 startup hubs (t.Hub, POPOP Taipei, ARK.Taipei(N24), and D.Lab) to inject new growth momentum into emerging industries. According to statistics from the StartUP@Taipei Office, Taipei has 28 incubation centers, 55 co-working spaces, and 12 creator spaces for use as of the end of August 2020. These spaces were available for use by entrepreneurs in Taipei City, guiding resources for application or for interactions and exchanges with other entrepreneurs to create more startup opportunities. In addition to the injection of resources at an early stage, site certifications are an indispensable key to the success of startups in later phases. The city government has recently provided sites for five innovative experiments in the field of medical treatment and epidemic prevention conducted by private businesses. These experiments encompass IoT sensor technologies, blockchain applications, facial recognition technologies, cloud information management, and information security and verification technologies. Businesses can also conduct 5G trials at municipal sites in the Neihu Smart Park, promote temperature sensor systems on campuses, or create healthcare information platforms. The goal is to cover the “last mile” to success through concrete achievements and joint efforts with entrepreneurs.
Making strides toward a future government with a digital ecosystem
Under the impact of the pandemic, globalization is suffering a reverse and the faith in border-free concepts developed for ICT and transportation is faltering. COVID-19 has caused lockdowns in numerous countries affecting contacts and interactions between humans. Major international manufacturers have been forced to shorten and regionalize their supply chains and adopt a strategy of collaborative network alliances to ensure production continuity and uninterrupted supply. Governments have played a decisive role in the achievements of Asian countries in the field of epidemic prevention. The utilization of organizational networks of governments allows rapid mobilization and adoption of epidemic prevention measures and ensures their effective implementation. The Taipei City Government has launched nine emergency relief programs encompassing rent and tax deferments, rent and tax reductions, rent suspensions, water and electricity rate reductions, subsidies, preferential interest rates, and labor relief measures since March. Tax reductions exceeding NT$ 94.43 million have been approved for a total of 6,455 cases. Preferential interest rate measures have been approved for around 600 cases. SMEs and young entrepreneurs have received over NT$ 500 million in loan financing. Total subsidies granted in 194,000 cases exceed NT$ 1.4 billion. These relief measures have helped reduce the cost burdens and capital pressures of Taipei enterprises. In addition, the city government actively implements a total of 17 recovery and revitalization measures. A budget of NT$ 300 million has been earmarked for industry relief measures encompassing shopping district promotions to boost sales, e-commerce marketing expansion, enhancement of consumer environments and technology application capabilities, intensified promotion of tourism and hotel accommodations, provision of subsidies to promote convention and exhibition activities, and special offers for artistic & cultural events. The ultimate goal is to intensify and boost overall economic activity.
The city government strives to create a better future in the post-pandemic era through active efforts to build the government of the future founded on a digital ecosystem. Relevant measures to accelerate the construction and installation of digital infrastructure facilities for next-generation encompass assistance for E-commerce businesses in the application of 5G technologies, installation of teleconferencing and VR devices in convention and exhibition venues, deployment of shared mobile office facilities, and continued optimization of the level of digitization of municipal administration services. A notable example is the integration of Taipei Pass with accounts. In the past, Taipei Passes were issued in form of physical cards. Now, these cards are linked to online accounts, which allows users to access multiple services offered by the government including e-counter services in the field of municipal administration and pay.taipei, an online payment portal for public fees, conveniently with only one card. The open access and application of municipal administration data represents another key effort of the government. Innovative entrepreneurs can retrieve useful information and data in numerous categories such as transportation, water resources, public order, and fire protection via the “Data.Taipei” open data platform. This platform greatly facilitates the creation of a more agile digital governance mode in cooperation with city residents. Although the COVID-19 pandemic has disrupted existing economic practices, it has also created new opportunities for innovation. Taipei City Government actively promotes digital transformation and strives to enhance services and intensify links with city residents. It also aims to strengthen the ability of enterprises to adapt to transformation processes and seize the opportunity to build a new normal and outlook for Taiwanese industries. The ultimate goal lies in the generation of new opportunities for a better future in Taipei.