Looking South Episode #21 – The Internet of Things

In this week’s Looking South, Eric Gau speaks with Advantech President Chaney Ho about the Internet of Things, and what it means for Taiwan under the New Southbound Policy.

Transcript:

Eric Gau: Good morning everyone and welcome to another episode of Looking South here on ICRT. I’m Eric Gau, and today I am joined by Advantech president, Mr. Chaney Ho, to tell us about the Internet of Things, and how it relates to the New Southbound Policy. Mr. Ho, welcome to the show.
Chaney Ho: Thank you.
Eric: For our listeners who are unfamiliar with this term, could you please describe for us what exactly is the Internet of Things, or IOT as it’s called.
Chaney: The IOT means the Internet of Things, which means that all of the devices will be connected through the Internet. Why do we need to connect with other things through the Internet? Because by connecting all the devices, you get all the data into the cloud, so you can do analysis and get insights or intelligent information. Now you can easily use Google Maps, or you can use many apps on your iPhone, so you can get very very intelligent information. This is all related to IOT.
Eric: So why is IOT so important for Taiwan? Why has it been included as part of the New Southbound Policy?
Chaney: Let me talk about the structure of IOT, although I don’t have slides to elaborate. Basically, IOT has three key components. The first one is devices. By the year 2030, there will be more than 40 billion devices in the world. All of these devices will be connected to gateways, transmitting all the data through the gateways to the cloud. The first part is devices, 40 billion devices. And you will have a lot of gateways to connect with all the devices and then transmit all the data through wired or wireless. Wireless could be 3G or 4G, G-bit, Wi-Fi, Bluetooth, or Sigfox, LoRa, a lot of different technologies. All the data coming through the cloud. You’ve heard of AI, artificial intelligence. So apply the artificial intelligence algorithms so people can analyze all the data and find the insights, all the valuable intelligent information. By doing that, you will experience all the services you never have in the past. Today, we already have a lot of incredible applications and in the future you will get more and more exciting services and applications from the IOT. And why is Taiwan so important? Because Taiwan is the number one in ICT, we make 100% of the iPhones, we make 90% of notebooks, we make a lot of the laptop and PC computers. We are the number one in the world. And Taiwan makes about 60-70 percent of the IPC as gateways, and we make most of the servers in the world. The ICT technology of Taiwan provides the majority of the hardware, devices, gateways, and servers for the backbone of the IOT. That’s the reason why IOT is so important to Taiwan.
Eric: How can expanding Taiwan’s IOT capabilities both help itself and help boost ties with nearby countries?
Chaney: Talking about the IOT, according to the McKinsey report, the IOT by the year 2020 will create more than 11 trillion US dollar economic impact in the world. Image 11 trillion a year is a huge number. So Taiwan, although we are a small country, we have a very good position to attack that market. So among that 11 trillion, there are two major applications for IOT. The first one we call Smart Manufacturing, some countries refer to it as Industry 4.0. The second one is Smart Cities: how to apply the IOT technology to improve our health care, our transportation, our retail, have a better customer experience. Industry 4.0 and Smart Cities are the two major applications for IOT. By strengthening our solutions in Industry 4.0 and Smart Cities, Taiwan will be able to not only export the hardware but also we can deliver software solutions to the global marketplace.
Eric: What is the government doing to promote the IOT industry under the New Southbound Policy? Do you know what effects these measures have had?
Chaney: I think the reason is very obvious. You know for the past ten years, Taiwan was too much locked on China. 40 percent of our business relied on China. But because of labor costs in China increasing 3 times in 5 years, so China is no longer a cheaper place to make anything. So we see a tendency that the global manufacturing base is shifting from China to other places. I think the South Asia, and ASEAN countries are the ideal place to become the next global manufacturing center. Because in this region, they have about 30 percent of the global population, about 2.2 billion. This region at the moment contributes only 5 trillion GDP. But this region has the fastest growing GDP among all the regiosn and countries. That’s the reason why I think the Southbound Policy is so important to Taiwan, because I think it is fundamentally correct politically and the right decision to expand Taiwan’s influence in the global marketplace.
Eric: What suggestions do you have for the Tsai administration, as it continues to pursue this project to expand IOT in Taiwan and abroad?
Chaney: I have two suggestions. The first one is that we need to use Taiwan as our test site on all the IOT solutions, especially for the smart manufacturing or Industry 4.0. 30% of Taiwan’s GDP is contributed by manufacturing, and more and more of the Taiwanese manufacturing in China is coming back to Taiwan. By adopting Industry 4.0 technology we can help all the manufacturers to improve their efficiency, and also upgrade their quality and also reduce their costs. So they will be able to make the things from Taiwan to become competitive. By further fine-tuning our solutions, we can export and duplicate the success stories or our best practices in Asian countries. As I mentioned, South Asian and ASEAN countries will become the next global manufacturing center, so that will be Taiwan’s good opportunity. We can share our experience and also export our hardware and solutions to these countries to help the world improve manufacturing efficiency and also productivity. This is what I suggest, the government needs to encourage all the industries in Taiwan to deepen and strengthen their offerings in hardware and software, and then we can export to South Asian and ASEAN countries.
Eric: We’ve been chatting with Chaney Ho, the president of Advantech. Mr. Ho, thank you so much for enlightening us this morning.
Chaney: Thank you. Bye bye.
Eric: And that’s it for this week’s Looking South. I’m Eric Gau, and we will see you back here next week.

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