I. Objective
The digital content industry is an indicator of the development of the knowledge-based economy and digital economy. It can help traditional industries to increase their knowledge content, thereby transforming them into high value-added industries. In the meantime, this industry can serve as a basis to strengthen Taiwan¡¦s overall industrial competitiveness. To enable the digital content industry to lead successfully Chinese-language markets in realizing the knowledge-based economy¡¦s development, the government has included digital content industry in the ¡§Two Trillion and Twin Star¡¨ program for the new century.
At the same time, Taiwan¡¦s strategic objective to develop the high value-added knowledge-based economy has taken shape. Among all industries, the cultural creative industry plays a crucial role in injecting cultural and creative elements into the knowledge-based economy. Therefore, this industry points the way for the future competition of Taiwan¡¦s industries.
The Executive Yuan¡¦s Development Fund has been established in accordance with the Promotion of Industrial Upgrading Act to handle important businesses or projects related to industrial upgrading and structural improvement. The Plan was formulated to encourage the development of digital content, software, and cultural creative industries, as well as to expedite the birth and growth of related industries. In addition, the development fund will be used in conjunction with related projects for their promotion.
II. Legal Basis
The Plan was formulated in accordance with the following measures: Implementation of guideline no. 5 ¡§to promote fund-raising for the digital content industry by introducing legal persons or venture capital¡¨ under the item ¡§Promoting Investment and Financial Assistance¡¨ in the ¡§Promotional Program for Strengthening the Development of Digital Content Industry¡¨ approved by the Executive Yuan on May 13, 2002; and the ¡§Cultural Creative Industry Development Project¡¨ under the ¡§Challenge 2008 National Development Plan.¡¨
III. Total Investment: a projected NT$20 billion (approximately US$620 million)
IV. Implementation Period: five years (2005-2010)
V. Investment methods and strategies, and estimated percentage ratios thereof
A. Direct investments (50 percent): Such funds are directly invested in new cases or existing projects that require additional funding of large digital content and software companies as well as cultural creative industries. After cases with great digital content and software development potential are selected, companies will be jointly established by the government, private sector, and businesses in the digital content, software, and cultural creative industries. The said companies will conduct R&D and produce and market products, thereby hastening the upgrading of these industries.
B. Venture investments (25 percent): Priority is given to investing in domestic venture capital companies of the digital content, software, and cultural creative industries. Through these companies, capital will indirectly be fed to smaller companies of a similar nature. The government, private sector, and enterprises will pool capital to form domestic venture capital corporations and funds primarily to invest in this field or to commission experienced foreign management teams or institutes that will transfer technology to Taiwan or be conducive to the development of both parties to manage these corporations and funds. Experienced management teams or institutes will be commissioned with managing these companies. Through their operations, capital will flow into smaller companies of the digital content, software, and cultural creative industries, thereby encouraging the development of Taiwan¡¦s related industries.
C. Investments in international benchmark businesses (25 percent): The government hopes to work with domestic venture capital companies to jointly invest in international benchmark businesses in the digital content, software, and cultural creative industries. This would further spur the transfer of globally advanced digital content and software into Taiwan or the sale of Taiwan¡¦s cultural creative products abroad. Through the opportunities for professionals from Taiwan to participate in investment evaluation and management endeavors, the rights to relevant products could be acquired for technology transfer. By the same token, related innovative and development capabilities as well as the rights to production and sales could be obtained.
VI. Investment Scope
The main items of digital content software industries to be promoted by the competent authorities are as follows:
A. digital content software
B. digital audio-visual products
C. digital games
D. mobile application services
E. internet services
F. computer animation
G. digital learning
H. digitalized publishing and archiving
In addition, the main items of culturally creative industries that could be promoted by the competent authorities are as follows:
A. cultural and artistic industries
B. motion picture and television industries
C. pop music industries
D. pictorial and literary publication industries
E. digital recreational and entertainment industries
F. cultural creative design industries
VII. Investment Principles
A. The total investment amount needed for direct investments, regardless of the amount requested from the Fund, must reach or exceed NT$100 million (US$3.10 million). Where applications for investments fail to reach the NT$100 million (US$3.10 million) minimum, the government can assist such applicants by introducing them to venture capital firms that fund digital content, software, and culturally creative businesses.
B. The proportion of the government¡¦s share shall not exceed 49 percent of any investment case.
VIII. Evaluation Process
Applicants shall send the application form, operations plan, and other relevant materials by mail to the Development Fund and to the competent authorities of the business to be established. The competent authorities are responsible for the evaluation of the technical and economic importance of the investment plans. Applications determined effective through preliminary evaluation will be recommended to the Development Fund for investment. In accordance with investment rules and related regulations, the Development Fund will evaluate and verify the applications or refer them to venture capital businesses that already cooperate with the Fund.