How Taiwan will become a major Asian startup hub

A street in Taiwan. Photo credit: Andrew Kow

Like many countries after the 2008 financial crisis, Taiwan’s unemployment rate rose with no signs of stopping. Coupled with the country’s deep rooted values in academic excellence and career advancement, stability became paramount.

Terry Cooke, former senior commercial officer of AIT Taiwan, points out: “With a small internal market of only 23 million, fully 70 percent of Taiwan’s GDP is accounted for by exports.”

“As a result of its high degree of integration with global supply chains,” he says, “Taiwan took a stronger hit and is suffering a longer recovery time from the impact of the global recession than its regional competitors.”

In a time when stability was paramount, risk was out of the question and so were startups.

Striving for more innovation

However, in recent years, Taiwan has been gearing to become the epicenter of innovation in Asia Pacific for a multitude of reasons. It ranks 15th in global competitiveness, 10th in innovation and has one of the largest populations of software and hardware engineers in the world.

A factory in Taiwan. Photo credit: Steve Jurvetson

This workforce is responsible for parts of Tesla’s original design as well as the production of flagship products by global electronics leaders like Apple, Sony, and Microsoft. The country has also dominated the semiconductor industry for over three decades.

Technological centers and innovation clusters are also growing organically throughout major cities such as Taichung, Tainan, and Kaohsiung.

Along with this, Taiwan also ranks first in global expat rankings and continues attracting foreign talent in all sectors.

These characteristics give Taiwan a unique regional and international advantage. However, there are institutional and cultural barriers limiting growth. Here are two suggestions on addressing these barriers.

Abandon the build-it-and-they-will-come model

Recently, the Taiwanese government allocated over US$310 million to construct a new technological center, which they dubbed Asian Silicon Valley.

Good Things Are Coming