New smart-city digital technologies involving the Internet of Things are being adopted by the nation’s largest cities and could help spur economic development through industrial transformation. Some of the leading examples so far are the eTag electronic toll collection system, the EasyCard payment platform, and the Wi-Fi system on the Taoyuan Metro. Under planning is a smart-machinery center in Taichung.

The Taiwan economy is performing respectably this year on the back of ascendant global demand for electronics products. In the January-March period, exports jumped 15.1% year-on-year, the fastest growth in six years. Economists say gross domestic product should expand 2% this year, the best performance since 2014.

It was not long ago that 2% growth would have been considered disappointing. But the Taiwan economy has stalled. Taiwanese firms cling to a dated contract-manufacturing business model that focuses on cost reduction and fails to produce high value-added products. “Our companies make many key components for the iPhone, but the finished product – what’s really valuable – belongs to Apple,” says Zack Lee, a manager at the Taipei Computer Association (TCA), one of Taiwan’s largest industrial organizations. “This is a recurring problem for Taiwanese industry.”

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