| dc.description.abstract | We have gradually entered the era of full digitalization, where industry is using digital technology to conduct innovative (flipped) economic activities and create a new diversified economic model. Full digitalization has not only driven industrial transformation but also profoundly affected how countries’ economies and societies develop and even how humanity will live in the future. From an industrial development perspective, the innovative economic model brought by digital technology has led to diversity in the interactions between industry and consumers as well as between competitors and suppliers, which has broken through the conventional industry value chain. Moreover, digitization is constantly challenging and even developing beyond the boundaries of the regulatory landscape established by the legislators.
This study explores the role of legal regulations and policies, in the context of digitization, in various industry practices. It addresses the question of whether legal regulations should be revised constantly and continuously in accordance with the innovations or be revised, if necessary, only after innovative activities have undergone a period of experimentation. In addition, this study addresses how policy ought to guide and encourage industries, business, and innovators to boldly invest in innovative business activities, and whether there are systems for mitigating the social cost of innovation risks that can be emulated.
The digital economy can be divided into a wide range of categories, including the sharing economy and community-based economy. This study focuses on the platform economy, and it argues that issues including the characteristics of industries, the employee–employer relationship, insurance risks, and tax patterns have all affected the industrial and governmental systems and put the administrative and legislative agencies in a difficult position to formulate solutions. However, Taiwan is a statutory country, and has a semi-presidential government and constitutional system with a separation of powers. Therefore, both stimulating industrial innovation and keeping the law up with the trend of the current era and digital technology have been fundamentally difficult for Taiwan compared with countries such as the United States, Japan, South Korea and those in Europe.
In recent years, many countries have adopted the concept of a sandbox as a guidance for industrial innovation in an attempt to experiment innovative business activities in a legal, safe, and controllable manner in the highly regulated environment. Such experimentation allows governments and businesses to consider the necessity and how to monitor and manage the innovation. However, the aforementioned fundamental problems are still encountered when the sandbox is implemented. Despite the use of sandboxes such as the Financial Regulatory Sandbox and Unmanned Vehicle Sandbox, the sandbox’s use in Taiwan is different for its use in advanced countries (e.g., United Kingdom and Japan) that prioritize private innovation in promoting the upgrading and transformation of existing industries. Moreover, no legislation has yet been formulated to govern a sandbox system for digital and platform economies; industries and businesses in these economies must survive under the pressure of existing regulations while enduring legal risks from an uncertain regulatory landscape.
This study not only furnishes suggestions regarding regulatory flexibility in those urgent regulatory issues surrounding the platform economy but also analyzes the conduct of digital innovation among platform economy operators. In particular, start-ups in the platform economy are mostly small and medium-sized enterprises (SMEs) that face high innovation risks. If their business models cannot survive in the consumer market, most will choose to exit the market, leaving various social problems in their wake—although some SMEs will try their best to protect the interests of cooperative manufacturers and their consumers. This study determines the root cause of these social problems to be the lack of an appropriate exit mechanism for SMEs and start-ups. At present, the Bankruptcy Act and the Company Act reorganization system are only beneficial to listed companies of a sufficiently large scale. Consequently, poorly managed SMEs eventually chose to exit the market at the lowest cost, closing down their business and being reluctant to readjust their business models.
The winners of innovation drive progress in a country and transformation and upgrading of an industry; the losers, on the other hand, leave a cautionary tale for government and industry. A country must rely on continual domestic innovation for consistent economic momentum and the cultivation of excellence in industry. An economic policy that has regulatory flexibility in support of innovation is as crucial as infrastructure. This study furnishes prescriptions for industrial development in Taiwan and elucidates the regulatory obstacles involved; it also contributes to the businesses investing in digital innovation economy and the platform economy. | en_US |