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New Ecosystem for Technology-Based Services Powerful Catalyst in Digital Transformation

The rapid, astonishing growth of big tech companies such as Amazon, Facebook, and Google or Silicon Valley unicorns like Uber and Airbnb reveals a key to their success—the leveraging of emerging technologies and new business models to innovate and disrupt the market. IEK Consulting defines these businesses as “New Technology-based Service Industry,” and considers it a crucial role that can help Taiwan’s industries accelerate their progress in digital transformation.

A recent report by IEK Consulting shows that despite being a major hub for tech products manufacturing, Taiwan’s spending in IT services accounts for only 18.2% of its total IT spending, which falls significantly behind the U.S.’ 49.6% and Japan’s 60%. In addition, while Taiwan’s service industry contributes over 60% of the total GDP, its service industry and manufacturing SMEs struggle “to harness technology to improve their services or production operations.” This indicates that when it comes to digital transformation, industries in Taiwan still possess a rather conservative mindset that relies on “buying equipment” instead of introducing new technology services.

The New Technology-based Service Industry offers great support for service industries and manufacturing SMEs.

The New Technology-based Service Industry offers great support for service industries and manufacturing SMEs.

So, what exactly is the New Technology-based Service Industry? And how can it lend a helping hand to the service industries and manufacturing SMEs so that they can reap the benefits of digital transformation?

According to the report, the New Technology-based Service Industry can be categorized into five major areas: 1) software development service, 2) system integration service, 3) technology platform service, 4) R&D and testing service and 5) technology consulting service.

New ecosystem for technology-based services.

New ecosystem for technology-based services.

As IEK Consulting suggests, the new industry, through professional service consulting, planning, and the introduction of emerging tech applications, can assist traditional industries or new startups to upgrade themselves in aspects such as product renovation or software-service integration. By adopting the new technology-based services, businesses would focus more on user-centric experience and involve expertise integration and value co-creation, thus becoming part of the new industry.

IEK Consulting advises Taiwan’s technology service businesses to enhance collaborations within the service industry ecosystem. To be specific, it urges them to incorporate the efforts from academia, research organizations or large tech companies to establish fundamental technology R&D platforms for data integration, AI algorithm incubation, AIoT labs and edge computing chips. This will help industries “greatly reduce R&D costs and shorten service time-to-market.”

The importance of interdisciplinary horizontal integration in the new industry ecosystem cannot be overlooked either. By integrating external supporting resources such as third-party services, IoT technology architectures and cloud centers for data storage, the New Technology-based Service Industry can center on its core professional services, thus improving the overall industry operations with great efficiency.

To conclude, IEK Consulting regards the New Technology-based Service Industry as a powerful catalyst in the process of digital transformation. Meanwhile, to secure a role in the global market, there is a need for Taiwan to establish a New Ecosystem for Technology-based services, which is expected to bring the nation’s economic development and industrial competitiveness to a new height.

To view the full report for more details, please click here.

IEK Consulting

IEK Consulting is a consulting service provided by ITRI’s Industry, Science and Technology International Strategy Center. With more than 200 technology and management analysts and professional consultants, IEK Consulting aims to provide customers with value-added, multi-disciplinary information and services using its extensive research skills and practical experience. It also works with the 6,000 experts from ITRI’s laboratories and research centers in a form of joint research to offer one-stop, high quality solutions. In addition, it cooperates with outside scholars to ensure its research quality. IEK Consulting helps its clients achieve high performance and create value; meanwhile it plays a unique role as a government think tank for advising on the nation’s industrial development policies.