In 2004, I visited Taiwan as the guest of Ma Ying-jeou, then Mayor of Taipei and now President. At a trade fair there, I was shown a new kind of laptop – one with a touch-sensitive screen and stylus, but no keyboard. The size of a briefcase, it weighed about 6 pounds. After trying it out, I told them that “If you can get this down to the size and weight of a magazine, you will have the killer product of all time.”
Well, Steve Jobs at Apple got there first with the iPad. Or did he? In 2013, Apple revealed that, of the 17 factories where its products are assembled and packaged, all but one is owned by a Taiwanese company. That’s no accident. In 1973, the national government created the Industrial Technology Research Institute (ITRI) to nurture the high-tech industry, using patents licensed from US companies. The Economist called it “a rare example of successful industrial policy.”
Forty years later, one of the beneficiaries is Taichung, the 2013 Intelligent Community of the Year. But Taichung is not just on the receiving end of smart policy; it has been an energetic participant that built high-quality schools and industrial parks making just about every kind of technology we have a use for – then getting them to work together for the benefit of Taichung.
Its universities and technical schools have launched hundreds of research institutes and more than a dozen incubation centers. A Taichung Incubators Business Alliance nurtures the growth of more than 400 companies that are successful graduates.
In the past 10 years, just one of its industrial zones, the Central Taiwan Science Park, has attracted companies with combined revenues exceeding US$8.1 billion from solar energy technology, touch-panel displays, optoelectronics, precision chemicals, semiconductors, aerospace and ICT.
One of them is Taiwan Semiconductor Manufacturing Company, a chip foundry that was spun out of ITRI in 1987. With global revenues of US$17.3 billion in 2012, it one of the world’s leading silicon chip makers. The company has made massive investments in foundries in Taichung, including a US$10 billion factory in the Central Taiwan Science Park, which employs 8,000 workers.
But the story is not all about tech giants. A city-led initiative created a shared-use ERP platform called the Engineering Data Bank. More than 400 of the city’s small precision manufacturers use it to enhance their engineering and operations. The reduction in rework, errors and delays is now saving these smaller companies a combined total of US$29 million per year.
Serving all these industries, Taichung Harbor has massive container truck traffic in and out of the port, which requires secure handling and verification. Until 2011, that meant unloading and physically checking cargo, creating a bottleneck that hurt the port’s competitiveness. In 2011, Taichung Harbor launched an automatic gate checkpoint system that electronically reads and matches the truck drivers’ identification, license plate numbers and container numbers using RFID technology. The entire process takes 2-3 minutes and has proven almost 99% accurate. The savings in time and money for users are enormous.
What do all of these different activities have in common? They are what people do when they believe in a better future. They combine the resources of business, government and institutions to place big bets that tomorrow will be better than today.
In the 21st Century, the infrastructure of most rich nations is slowly eroding for lack of appetite to place those bets. In 2009, the American Society of Civil Engineers (ASCE) estimated that the nation needed to spend at least $2.2 trillion over the next five years to repair its infrastructure. So, five years later, how was the nation doing? The 2013 ASCE report card foresaw the need to spend $3.6 trillion by 2020 – $1.6 trillion more than was currently budgeted.
Even Germany, that exemplar of efficiency, has skimped on maintenance. A government-appointed commission concluded in 2013 that the country needs to spend $9.2 billion every year for the next 15 years to get existing infrastructure back into shape.
When we believe that the future holds more potential for gain than loss, we invest in our future and that of our children. When we believe the opposite, we invest only in today’s rewards. There is a question that those of us in the rich world should be asking ourselves – a question I do not, unfortunately, hear in public debates but ibe with profound implications for ourselves, our communities and our nations. The question is: what kind of future do we truly believe in?