National Digital Development Leader - Digital Development Department

At the end of December last year, the Legislative Yuan passed the third reading, and a new department, the Ministry of Digital Development, will be added under the Executive Yuan. It is expected to be listed at the end of August. The Ministry of Digital Development is responsible for planning the country's digital development policies, and will move some of the business from the five major fields of information, information security, telecommunications, networking, and communication to the Ministry of Digital Development for implementation, and cooperate with various departments as a "national digital development leader". . This move is not only a major change in the current government organization, but also reveals the government's emphasis and expectations on the digital economy.

As the time approaches, relevant discussions from all walks of life are becoming more and more lively. What is the purpose of the establishment of the Digital Development Department? What problem do you want to solve? What challenges did you encounter during the establishment? And what is the impact of the Ministry of Digital Development on the fintech industry? Mark hopes that through this article, I will bring everyone to know this highly anticipated and challenged new department.

Origin of Digital Development

(1) The establishment process

• In December 2019, Tsai Ing-wen mentioned at the Future Science and Technology Exhibition that digital authorities will be established across the five fields of information, information security, telecommunications, networking, and communication.
• At the presidential inauguration ceremony in May 2020, Tsai Ing-wen announced the promotion of the establishment of the Digital Development Department, which is also an important task for the new term of office of President Su Zhenchang.
• In March 2021, the draft of the reorganization of the Ministry of Government, Academy and the Ministry of Education was passed, including the addition of the Ministry of Digital Development, the return of the Ministry of Science and Technology to the National Science and Technology Association, and the addition of the Reserve Mobilization Department of the Ministry of National Defense. The Executive Yuan established the "Digital Development Ministry Preparatory Working Group".
• On December 28, 2021, the Legislative Yuan passed the "Organic Law of the Ministry of Digital Development" in the third reading
• In March 2022, Tang Feng took over as the convener.
• August 2022 is the expected listing date for the Digital Development Department.

(2) Reasons for establishment/needs

1. The rise of "Digital Sovereignty" The digital wave has made waves in a country, and the concept of "digital sovereignty" has also emerged, which refers to the power of a country to manage and use digital resources. This also represents the display of national influence, which will extend from the original geopolitics to the virtual network. The importance of technology and digital fields has been promoted from the economic level to the political and power level, becoming an indispensable national strength.

2. Internationally, Taiwan's digital development is behind people. From the perspective of Taiwan's industrial development, political councilor Guo Yaohuang once said that 70% of global growth in the future will come from the development of the digital economy, and 40% of the global GDP in 2025 will come from the digital economy. In 2020, it will account for about 20%, and there is still significant room for improvement. Compared with Taiwan's important position in the international hardware manufacturing industry, digital development is behind people. It is hoped that through the establishment of a new department, combined with domestic industries, it will become a forerunner from a follower of the digital wave.

3. The government needs a dedicated agency for digital governance. Until now, before the Department of Digital Development is in operation, each government agency has to face the digital transformation of its departmental business independently. However, with the challenges brought by the digital wave, the Executive Yuan believes that the government's digital governance and organization also need to follow up and adjust, and a dedicated and professional agency is needed to break through the integration, so it proposed the establishment of the digital development department.

Supplement: In the draft organic law of the Ministry of Digital Development, the reasons for the establishment of the Ministry of Digital Development are explained in four aspects:

(1) Industrial development:
a. Digital transformation is highly anticipated by the industry, among which the digital transformation of SMEs and traditional industries is critical to industrial competitiveness

b. my country's new digital economy is not as good as the international advantages of the hardware manufacturing industry, and the government is expected to improve the industrial environment

(2) Social development:
a. The current situation of high reliance on the Internet and digital vehicles to shape the Internet civil society culture

b. With the high application of digitalization in data collection and utilization, the challenges of information security protection and data management are increasing

(3) Digital inclusion:
Digital Human Rights Protection

(4) Overall national strength development:
The ability to manage one's own digital resources, digital national power

Responsibilities

(1) Job assignment

Through the establishment of the Digital Development Department, the Executive Yuan will allocate some business from the five government departments in charge of communications, information, information security, network and communication, and centralize the business related to digital development. The role of "author" to assist various agencies in implementing digital governance.

Ministry will transfer business:

NCC: Base station, network cable and other infrastructure construction, telecommunications industry development and guidance.

Ministry of Communications: Overall resource planning for communications.

Ministry of Economic Affairs: Software industry development and guidance, such as information security, AI software, digital content, e-commerce, system integration.

National Development Council: The government's own wisdom upgrades, system updates, and open data.

Information Security Office: All government information security.

(2) Setting the unit

Digital Industry Agency: To promote the industry by attack, responsible for the policy planning related to the digital economy industry.

Information Security Agency: To safeguard information security, the Information Security Office of the Executive Yuan has been upgraded to coordinate government information security management.

National Information Security Research Institute (administrative legal person): Staff of the National Information Security Technology Think Tank.

(3) Manpower Arrangement

The third reading also stipulates that the Ministry of Digital Development will have one minister, two political undersecretaries, and one executive undersecretary. In addition, the Digital Development Department may employ professionals in related fields such as digital technology and application and management, and the number of professionals shall not exceed 100.

There has been a lot of discussion about who will serve as the Minister of Digital Development. At present, the most vocal is Tang Feng, the current digital political commissar and the current convener of the Digital Development Department. However, the final selection of ministers still has to be announced by the government.

Note: It has been announced that Tang Feng will be the first minister

current challenges

(1) Data-related laws are complex

The digital economy focuses on the collection, analysis and application of data, which involves a wide range of areas. When designing regulations, the government must also consider data-related laws. Example: Data sharing, one of the reasons for promoting financial holding companies in the early days, hoped to promote cross-selling between subsidiaries, but the Financial Regulatory Commission has formulated two norms for data sharing between institutions, so that the data between financial institutions and between subsidiaries can be regulated separately. Similar incidents form overlaps and distinctions in laws and regulations, and need to be rectified together with the industry management unit.

(2) Cross-border transmission and privacy protection

When data crosses national borders, how to reach a consensus on privacy rights and data application is a prerequisite for cross-border transmission. In March this year, the EU and the United States established a new cross-border data transfer agreement (Transatlantic Data Privacy Framework). The existing agreement was replaced because the Court of Justice of the European Union believed that the privacy protection provided by the original agreement to the people of the EU was not as good as the EU's own norms, and then abolished , so that the two major economies of the European Union and the United States must establish new cross-border transmission norms, otherwise there may be a dilemma that multinational platform operators in the European Union cannot transfer user data back to the United States for use. As Taiwan keeps pace with the development of the digital economy, it is bound to establish agreements with different countries and economies in the future. The protection and protection of data privacy rights must be prepared in advance.

(3) List the business scope and cooperate closely with various ministries and associations

The first minister is very important in business control, defining what matters should be in charge of the digital development department and what should not, so as to avoid the expectation or confusion of the public and other ministries. In addition, the digital development department does not replace the function of the department, but assists the digital transformation of each department. In the digital economy, there must be a clear direction and advice, in order to establish good communication between people and organizations, allocate manpower, and smoothly coordinate among various departments. , give guidance.

Outlook after establishment

(1) Industry

The industry's expectations for the Ministry of Digital Development can be classified into three major points: assisting the industry in inter-ministerial communication, building a digital land, and developing more and less management.

The case of inter-ministerial communication takes Fubon as an example. Due to legal requirements, momo shopping network cannot directly sell insurance products. If consumers buy insurance through e-commerce, the webpage will jump to the insurance agency subsidiary and then to the insurance company to place an order. Complicated and jumping procedures will affect consumers' online experience. Therefore, if there is a full-time department to connect the two departments in the future, we hope to make the operation easier.

As for digital land, overseas digital trading platforms such as Uber, FoodPanda, booking.com, and Agoda, which are frequently used in Taiwan, will pay commissions to overseas companies when they are used. If similar companies are established in Taiwan, they can also obtain income in the same way. At present, Taiwan has the advantage of data concatenation compared with other countries, one of which is health insurance data, which may be able to distinguish it from other countries.

The last is the direction of development and management. The industry hopes for more innovation and development in the digital economy, and believes that unnecessary regulations should be loosened. But now that everything is related to data, it is still not to be neglected when the industry is rushing forward with appropriate regulations.

(2) Government

Convenor Tang Feng put forward the three major goals of the Digital Development Department, namely "building a model of cross-domain cooperation in digital services", "complete data public welfare ecological system and application" and "promoting the common development of technology and data democratization for multinational citizens". Generally speaking, there are plans for information security issues, digital transformation of the government, and industrial guidance for new entrepreneurs, and they are integrated in a cross-ministerial and cross-industry manner.

(3) Fintech industry players

Fintech is closely related to digital development, but there has been no clear definition of "fintech authority". More and more industry players in Taiwan are investing in fintech. If they want to use government resources, they often need to apply to the competent authorities. This also makes it impossible for industry players to effectively use government resources while increasing government resources, and face the dilemma of unclear regulations and supervision.

In terms of development and supervision, if there is no clear management unit in charge, when a market problem occurs in the digitalization process, who will manage it, the Digital Development Department or the Financial Regulatory Commission? In the upcoming digital development department business, no relevant regulations such as virtual currency have been seen, which is also a topic of concern to the industry.

The lack of a fintech authority not only makes the use of government resources difficult, but also makes it difficult to manage. The industry expects that after the establishment of the Digital Development Department, relevant regulations and supervision systems will be improved, and financial technology will be fully integrated into part of the digital transformation.

Mark's thoughts

Mark believes that the role of the Digital Development Department is more like a coordination window between the private industry and various government departments. In the field of financial technology, the relevant regulations and supervision will still be dominated by the Financial Regulatory Commission, and the Digital Department, as a government department, can provide It is suitable for the planning of future national digital development, and accelerates the revision or implementation of regulations, so that financial technology companies no longer need to be under inappropriate regulations or gray areas.

But changes will bring conflicts. In fact, the changes that can be created by the Department of Statistics may not be as much as imagined. But as Mark said before, digital transformation can only be accomplished through policy leadership and non-governmental cooperation. It is conceivable that more digital issues will be discussed in the future. Perhaps we can look forward to the day when the decisions of various discussions are implemented. .