During a personal interview on March 19th, Mr. Ching-Yen Tsay, the Chairman of Industrial Technology Research Institute (ITRI) discussed the topic regarding to the current Taiwanese technology industry being stuck in the “Valley of Death”, which is the gap from research & development (academic institutions and research institutions) to the technology or product being commercialized into mass production (corporate). At the moment, Chairman Tsay believes the Taiwanese technology industry puts too much emphasis on the vertical division of labor while lacking the power of an integrated upstream and downstream system which is why the technology industry is currently stuck in the “Valley of Death”, while the technology being researched cannot leave the laboratory. Chairman Tsay believes as long as the corporate enterprises and the academic & research institutions can joint force to collaborate and form a business model from R&D to commercializing it into mass production, it can help the industry across the “Valley of Death”.
This year marks the 40thanniversary since ITRI was established back in 1973. Chairman Tsay emphasized that ITRI will continue to encourage youth entrepreneurship in the future. While emphasizing on youth entrepreneurship, Chairman Tsay also believes with the excellent entrepreneurship environment being provided in Taiwan in combination with the technology from Japan while combining with the innovation models created by the United States, Taiwan can expect to play a pivotal role in the “new golden triangle” leading the countries to capture the mass potential business market in China.
By looking in the future, Chairman Tsay emphasized that Taiwan should actively shape the culture and its environment of innovation & entrepreneurship in order to push the economy and Taiwan’s ability to innovate, promote industry restructuring, and creation of job opportunities. In the past, Chairman Tsay says Taiwan have relied on a model of “pursue scale-based technological development”, but due to the innovation at Apple, and Samsung’s large sum of investment in R&D while also specializing in vertical integration business model which causes playing catch up more difficult. As a result, the technology industry in Taiwan began to fade and leading to high rate of unemployment, salary stagnation, and the local talent pool leaving for international job opportunities, thereby affecting the overall economy.
In order for Taiwan to undergo transformation to become an innovative economy, Chairman Tsay further emphasized on the 4 innovative key elements including technology, human resources, capital, and industry which must be linked closely in order to achieve a continuous and sustainable innovative environment. Chairman Tsay believes in fact, the new venture is a key influence on the national economy according to the statistics of the United States. For the past 20 years, the average annual employment rate increased by 1.8%, and within five years of the establishment of the new companies, the annual employment rate increased up to 3%, which shows the new ventures have a profound impact on the employment rate and economic guide toward the keys to an entrepreneurial society.
When asked how ITRI helps new ventures to obtain sufficient funds, Chairman Tsay states, in order to assist the new ventures across the “Valley of Death”, ITRI reinvest through its venture capital subsidiary Industrial Technology Investment Corporation (ITIC)which provides corporate financial support to the new ventures. To further support the new ventures, ITIC along with Chinese venture capital WI Harper Group, and former president of Google China, Mr. Kai-fu Lee’s Innovation Work (business angel), together established a joint venture named Taiwan Mobile Innovation (TMI), which focuses its investment in the internet, e-Commerce, cloud computing, and its related fields.
Chairman Tsay hopes the actual funds to support the domestic new ventures could also create employment opportunities for young people and also develop new innovative trends and capture potential business markets.