David Hsu SME2008

Taiwan SME Policies Formulation and Development Strategies
by Mr. David Hsu Director Small and Medium Enterprise Administration Ministry of Economic Affairs Taiwan
Service. Minding. Esteem. Awareness
I. Overview
1. Economic Development Stages
1950 1960 1970 1980 1990
Joined WTO Jan 2002
2000
2010 Creative R&D Industry
Labor Intensive Industry
Light Heavy Strategic Hi-Tech Industry Industry Industry Industry
1) 1950 2000 Economic Growth Rate : 8.1%(Average) 2001 Economic Growth Rate : - 2.18% 2) 2002 Economic Growth Rate : 4.6% 2003 Economic Growth Rate : 3.43% 2004 Economic Growth Rate : 6.07% 2005 Economic Growth Rate : 4.09% 2006 Economic Growth Rate : 4.62% 3) 2006 GDP Structure : Service Sector 71.65% Industry Sector 26.81% Agriculture Sector 1.53%
0
The Definition of SMEs in Taiwan

SECTORS Manufacturing, Construction, Mining, Quarrying Commerce, Service SMEs Basic Capital < US$ 2.3 Million Preceding year revenue < US$ 2.9 Million Exception Employees < 200 persons Employees < 20 persons Micro Business
Employees < 50 persons
Employees < 5 persons
2. The Current Status of SMEs in Taiwan

All enterprises No. of enterprises Total employments (thousand persons) No. of employees (thousand persons) Total Sales (NT$ million) (US$ million) Domestic Sales (NT$ million) (US$ million) Export Sales (NT$ million) (US$ million) Source: White Paper on SMEs, 2007
2
SMEs 1,244,099 7,751 5,186 10,241,215 (310,339) 8,678,992 (262,999) 1,562,224 (47,340)
% of SMEs
1,272,508 10,111 7,542 34,326,070 (1,040,183) 25,594,318 (775,585) 8,731,753 (264,598)
97.77 76.66 68.76 29.84 33.91 17.89
3. Operating Years of SMEs in Taiwan

2006 Age Less than 1 year 1 2 years 2 3 years 3- 4 years 4- 5 years 5- 10 years 10- 20 years Over 20 years Total 2002 2003 2004 2005
Total enterprises SMEs % of SMEs
91,435 94,036 77,477 70,554 63,851 233,742 279,065 194,546 1,104,706
112,154 104,183 82,234 69,545 64,843 248,300 283,225 207,296 1,171,780
108,610 110,649 87,612 70,895 61,321 245,280 287,444 218,365 1,190,176
125,667 108,989 96,365 79,583 65,055 249,414 298,662 229,959 1,253,694
108,673 121,466 92,503 84,648 71,610 253,746 299,282 240,580 1,272,508
108,320 120,530 91,400 83,272 70,133 247,247 290,121 233,076 1,244,099
8.71 9.69 7.35 6.69 5.64 19.87 23.32 18.73 100
61.92% 61.92%
Source: Collected from Ministry of Finance Tax Data Center Business Tax statistics.
units: no. of enterprises
4. SMEs Development Policy Formation in Taiwan

Trends of Industrial Development and Transformation
Innovation Drive
(Knowledge)
Investment Drive
(Capital)
Resource Drive Current Stage Of Taiwan
Years
5. The Relationship of Entrepreneurship and Economic Growth

Existed Enterprises
Enterprises and Industries Transformation and Upgrade
Moved out ew er n h t h a no lenis Rep ish l b a Est siness u b Emergence of new SMEs with technologytechnology-oriented and high valuevalue-added
Straits and Predicament
Closed Economic Development And Growth
StartStart-Ups
Positive Recycle of Economic Development

5
II. Key Measures for Developing an Entrepreneurial Society

1-1. Philosophy Service, Minding, Esteem, Awareness
Top SMEs, Ltd. Co., 1~3%
Award Strategy
1. National Award 2. Rising Star Award 3. R&D Award
mechanism for supporting entrepreneurial activity & innovation
Middle Layer of SMEs, Ltd. Co.,

27~34%
Guidance Strategy
11 Guidance Systems
1-2. Eleven Guidance Programs to Assist SMEs (1/2)
Start-up SMEs Enterprises
Grouping Strategy
1. Mutual Cooperation 2. Industry Cluster
3. Local Cultural Industry
Foundation of SMEs 65~70%

6
4. Financing Programs
1) Finance and Credit Guidance System 2) Management Guidance System 3)Production Technology Guidance System 4) Research & Development Guidance System 5) Information Management Guidance System
1-2.Eleven Guidance Programs to Assist SMEs (2/2)
6)Industrial Safety Guidance System 7)Pollution Control Guidance System 8)Marketing Guidance System 9)Mutual Support & Cooperation Guidance System 10)Quality Enhancement Guidance System 11)Business Startup & Incubation Guidance System
8
1-3 Vision and Strategies

Creating a healthy environment for the development of SMEs Building a platform for enterprise start-up and incubation Enhancing SMEs information technology capability
Creating an environment beneficial to the establishment and growth of SMEs
Integrating the SME financing mechanism
Strengthening the SME management guidance function

9
1-4 Award and Commendation
Business Model/Quality Market Share
National Award for Outstanding SMEs Rising Star Award
R&D
Excellent SBIR Creation/ R&D Alliance/ Industry Upgrade/ R&D Achievement/ Industry Contribution Awards
Innovation
Taiwan SMEs Innovation Award Business Start-up Award

10
2. Platform of Entrepreneurship and Incubation for SMEs
Vision: To Foster Taiwan as an Entrepreneurial Society
Incubation Services
To Develop the Asia Entrepreneurial Development Center (AEDC)
Knowledge and Information Providing

11
Financing Support for Start-Ups
2-1. Incubation Services

(1) Definition
Incubation centers are locations for the cultivation of innovation businesses, products and technologies, and for helping SMEs to upgrade and transform themselves. By providing start-ups with office space, instruments, equipment, R&D technology, helping them to secure financing, and by providing management consulting and other business services, they facilitate the effective integration of resources, helping to reduce the costs and risks that start-ups have to bear in the early stages of business development, and increase the successful possibility of new businesses.
(2) Type
University Research Institute Public Sector Private Sector
81 8 10 1
0
81%
8% 10% 1%
10 20 30 40 50 60 70 80 No.
type
12
(3) Performance of Incubation Services

Year Performance 2004 2005 2006 2007
1997~2007
Note1.Statistics RangeIncubation centers subsidized and invested by SMEA, MOEA. 2.The incubating process is limited within 3 years in principle. Statistics number of fostered SMEs and employment are based in newly incubated SMEs in the year. 3.TSEC: Taiwan Stock Exchange Company; GTSM: GreTai Securities Market
13
Input Output
1.Subsidy for Incubation Center (NT$ million) 1.No. of Fostered SMEs 2.No. of Fostered Start-ups 3.Capital Increase (NT$ billion) 4.Multiple of Output and Input (Capital Increase/Subsidy) 5.No. of Employment being Created 6.No. of Patent Acquired 7.No. of Technology Transfer 8.No. of TSEC/GTSM Listed Companies
186
1,122 475 4.5 24 11,477 160 87 12
214
1,320 479 5.6 26 22,648 413 145 3
164
1,286 475 5.3 32 25,353 400 205 0
172
1,356 577 5.2 30 27,133 416 149 3
1,681
2,986 1,000 44.9 27 65,086 1,542 667 36
Incubating Domain in Taiwan

IT & Electronic
Raw Material 3%
Machinery & Electric Machinery Multimedia & Broadcasting Biotechnology Environmental Protection Industry Medical Industry Aerospace Industry Architecture Chemical & Petrifaction Livelihood Industry
Machinery & Electric Machinery 19% Biotechnology 10% Multimedia & Broadcasting 6%
Tourism & Recreation Education, Culture, Arts Distribution and Logistics 1% 2% 1% Livelihood Industry Others 4% 6% Chemical & Petrifaction 2% Architecture 3% Planning & Aerospace 0% Medical Industry 3% Environmental Protection Industry 4% IT & electronic 36%
Raw Material Distribution and Logistics Tourism & Recreation Education, Culture, Arts Others
14
Regional Distribution of Incubators in Taiwan

Northern Taiwan 43. 6 %
Central Taiwan 22.8% Eastern Taiwan 3.9%
Southern Taiwan 29.7%

Source: Small and Medium Enterprise Incubation Coordinate Center, 2007
15
Case of Incubation Center

NatureWise Biotech & Medicals Corporation (Nan(Nan-kang Biotech Incubation Center)
Established in Dec 2000. Joined in Nan-Kang Biotech Incubation Center in Dec 2004. Major Technology of NatureWise R&D in biotech, Chinese herbal medicine and health food. Achievements 1. Main product LipoCol Forte had earned the first license of the Committee on Chinese Medicine and Pharmacy, Department of Health, Executive Yuan. 2. Winner of the 2005 Taipei Biotech Award-Technology Commercialization.
(Unit: No.; NT$)
Before Capital Trade No. of Employees

112 million 8 million 6
Current Status
154 million 26.57 million 19 16
2-2. Financial Support for Start-Ups

(1) Sources of Financing
Invest (15%) SME SME Investment Investment Companies Companies Incubation Incubation Fund Fund Account Account
st ve in
Private Private Funds Funds
SME SME Development Development Fund Fund National National Development Development Fund Fund
Domestic Domestic Loans Banks Banks
SMEs & StartStart-ups
st ve n i
Capital Markets VC
st ve in
Guarantee
Reward
SME Credit Guarantee Fund
Government Government Agencies Agencies

17
invest
2-2. Financial Support for Start-Ups

(2) Financing Supporting Measures i. SME Incubation Trust Investment Account ii. SME Investment Companies iii. Entrepreneur Loans for Micro-enterprises iv. Strategic Alliance with Venture Capital v. Various Programs of SMEs Loan vi. SME Credit Guarantee Fund vii. SME Call Center (3) Government Policy Support on Financing
Unit: No.; NT$ million
Period Item Financing amount supported by the SMEG credit guarantee Financing Diagnostic Guidance
18
2007 238,801 495,257 282 6,456
Cases Sum Cases Sum
2008 Jan.Jan.-Jun. 119,280 262,871 109 2,483
SME Credit Guarantee Fund

(1) Established in 1974, Provide Credit Guarantees to SMEs
which Are Promising but Short of Collateral. Help Obtain Finance from Financial Institutions (2) Credit Guarantee Service Statistics
Unit: No.; NT$ billion
No. of guaranteed enterprises No. of cases guaranteed Amount guaranteed Amount financed
* Statistics from 1974 to the End of June 2008
277,193 3,489,458 4,107 6,115
19
Case of Financial Support for Start-ups TongTong-Jou AluminumAluminum-Can Manufactory Co., Ltd.
Established Established in in April April 2002. 2002. Capitalization: Capitalization: NT$ NT$ 2,000,000. 2,000,000. Employees: Employees: 4. 4. Main Main products: products: aluminum aluminum tube tube and and aluminum aluminum can can by by ODM. ODM. 70% 70% of of sales sales are are for for export. export. 2003: 2003: acquired acquired the the Micro-enterprise Micro-enterprise Start-up Start-up Loans. Loans. 2004: 2004: The The manager manager was was awarded awarded the the first first of of Micro-enterprise Micro-enterprise Start-up Start-up Loans Loans model model award. award. 2004-2005: 2004-2005: The The company company acquired acquired the the R&D R&D Loan Loan of of NT$ NT$ 6,160,000 6,160,000 with with 85% 85% credit credit guarantee guarantee from from the the Small Small and and Medium Medium Business Business Credit Credit Guarantee Guarantee Fund. Fund. With With the the support support of of the the R&D R&D Loan, Loan, the the company company is is developing developing the the machine machine and and container container for for vaporizing vaporizing essential essential oil. oil. 2004: 2004: The The company company acquired acquired the the intellectual intellectual property property patent. patent. They They promoted promoted the the products products successfully successfully to to the the international international market market by by cooperating cooperating with with Innovation Innovation Incubation Incubation Center Center at at Oriental Oriental Institute Institute of of Technology. Technology. 2003-2006: 2003-2006: The The revenue revenue increases increases each each year year from from NT$ NT$ 8,000,000, 8,000,000, 10,000,000, 10,000,000, 14,000,000 14,000,000 to to 18,000,000. 18,000,000. The The capitalization capitalization in in 2007 2007 is is boosted boosted to to NT$ NT$ 5,000,000. 5,000,000. The The employees employees also also increased increased to to 18. 18.
20
2-3. Knowledge and Information Providing

(1) Entrepreneur Lab Programs
Entrepreneur Entrepreneur Consulting Consulting & Information Providing & Information Providing Services Services
(1) Select 100 potential candidates to the Lab (2) Conditions: one with preparatory capacity and a feasible business plan (BP)
Entrepreneur EntrepreneurLearning Learning Courses Services Courses Services
(1) Select 200 potential candidates to the Lab (2) Conditions: one completed training courses, with a feasible BP (1) Through promotional activities, select 200 potential
Entrepreneur EntrepreneurLab Lab
candidates to the Lab (2) Conditions: one with capability and a feasible BP, ready to start up a business
21
Entrepreneur Consultation & Information Providing Services Consulting Channel

By Telephone Potential Entrepreneurs (0800(0800-589589-168) By Website http://sme.moeas http://sme.moeas mea.gov.tw
Question Categorized
Common question 1. Call Center 2. Data Base Individual question 1. OnOn-site consultant 2. Joint consultant
Contents of Services
Business Plan Financing Assistant Marketing Information Accounting Service Legal Service
22
Entrepreneur Learning Courses Services College of Entrepreneur Objective Trainees

(Innovation-oriented personality) 1. New enterprises established within 3 years 2. Plan to start a new enterprise
Programs:
EMBA Courses Case Study Field Visit Seminar Business Plan
Online-learning Programs sme.moeasmea.gov.tw) ) Online (http:// Online-learning Programs (http://sme.moeasmea.gov.tw (http://sme.moeasmea.gov.tw) Application -learning e Application for ee-learning E -learning courses E-learning courses of of Entrepreneur Entrepreneur Competition Competition of of Business Business Plan Plan
Superiors Others
Nominate Nominate to to Entrepreneur Entrepreneur Lab Lab

23
Transfer Transfer to to Entrepreneur Entrepreneur Consultant Consultant Center Center
2-3. Knowledge and Information Providing

(2) Publishing Journal of Entrepreneurship Research PurposeEncourage and promote the research of entrepreneurship and start-up business. First Edition2006/12 Websitehttp://www.erj.org.tw / http://www.erj.org.tw/
24
Case of Entrepreneur Lab Program Wretch Limited Company Authorized Capital: NT$ 20 million Characteristics
WRETCH was founded in 1999 by 6 university students in National Chiao Tung University and registered in March 2005, providing service of immediate photo album on the Internet. It has offered an exclusive Internet photo album to each user for free on campus. In accordance with Google in Stanford University, WRETCH run a winwin situation between companys profit , users right and interests. There are 2.8 million members in 2006. Now WRETCH has been merged into YAHOO with US$ 21 million in March 2007.
Government Guidance and Assistance

Recommend to the Lab and win The 4th Business Start-Up Award
25
3. Enhancing SMEs Information Technology

e-Commerce
Supply Chain Management
SME Supply Chain Management Integration Project
Online Sales
Diagnostic Service Knowledge Management
Industry-Specific e-Commerce Project

Knowledge Management Promotion Project SME e-Business Service Project
Bridging the Digital Divide of the SME Project
e-Application
e-Operation
e-Commerce Communication & Network Talent Cultivation
SME e-Learning Project SME e-Enablement Talent Cultivation Project Corporation Operation e-Network Service Project
Micro Business (Below 5 employees) Small Business (Below 20 employees ) Medium Business (Below 200 employees )
e-Infrastructure
Information Portal
The Guidance Service thats Always By Your Side, Lifting SME e-Dream off the Ground 26 Provide e-Business Enabling of Independent Enterprise, Clusters, and Industries.
4. Women Entrepreneur Guidance
Free & Young Womens Entrepreneurial Guidance Program, National Youth Commission: (1) Establish Service Network for Women Entrepreneurs (2) Online Counseling and Guidance (3) Research Into Womens Entrepreneurial Trends (4) Training (5) Unify Resources
27
5. Micro Business Start-Up Loan (1) Purpose Enhance the Entrepreneurship & Assist the Middle-age Unemployed Person to Create New Business in Knowledge Economic Era (2) Loan Source Banks Own Capital (3) Eligibility Must be Unemployed, Age 45 to 65 Years Old, Who Have New Business Plan New Start-up Business, or Business Within One Year (4) Loan Size For Each Person NT$1million Is Maximum
28
(5) Interest Rate 3% Per Year. Fixed Rate (6) Guarantee 80% of Loan Guaranteed by SME Credit Guarantee Fund (7) Purpose of Loan Working Capital Real Estate, Machinery and Equipment (8) Loan Period 6 Years Maximum (9) Other Matching Measures Provided Management & Technical Assistance to Help Ensure Success Awards to Excellent Entrepreneurs Regular Report to Executive Yuan
29
Entrepreneur capitalized Micro Business StartStart-Up Loan

Unit: number, (%)
Years Old Woman Man TOTAL
45 ~ 49 1,326 2,197 3,523
50 ~ 54 1,013 1,382 2,395
55 ~ 59 420 576 996
60 ~ 65 267 240 507
SUM 3,026(40.83) 4,395(59.17) 7,421
* Statistics from January 2003 to July 2006
Entrepreneur capitalized Micro Business StartStart-Up Loan by Sector

Unit: number
Sector Woman Man TOTAL
Manufacturing
Trade
Eating-drinking Place
Other Services
SUM 3,026 4,395 7,421
133 261 394
1097 1,675 2,772

30
682 619 1301
1,114 1,840 2,954
6. Building Up the SME Service Network Mechanism

23 Local Service Centers
Center / Local Associations
SME Service Network Mechanism
Entrepreneur Volunteers Bank Service Centers Virtual Internet Service www.moeasmea.gov.tw One-Stop Solution Center
31
III. Key Measures for SME Internationalization and Cooperation Goal Strategy Measures Benefit
Promoting SME Internationalization and Cooperation Actively Participating in Regional or Multilateral SME Economic and Trade Cooperations, Organizations Enhancing Bilateral Cooperation of SMEs Sharing and Exchanging SME Guidance Experience Research on SME Policy, Guidance and Important Issues of Each Country
Asia Pacific Economic Cooperation (APEC)
APEC Business Advisory Council SME Summit Organization for Economic Cooperation and Development (OECD) International Small Business Congress (ISBC) International Council for Small Business (ICSB) Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI) Through Bilateral Ministerial Economic Cooperation Meeting to Impel Bilateral Cooperation Action Plans, Sign Cooperation Memorandum; ICDF International Study Group Sharing and Exchanging SME Guidance Experience through Innovation and Incubation (National Business Incubation Association /Asia Association of Business Incubation)Local Cultural Industry GuidanceeCommerceCredit Guarantee and so on.
Expanding Participation in International Society, Integrating Folk Strength to Promote SME Visibility and Development Pattern Developing International Cooperation network, Enhancing the Interaction with International Society to help SMEs Grow, Internationalize and Deploy Globally
Sharing and Learning Best Practices of SME Internationalization and Cooperation 32
IV. Conclusion
SMEs are the foundation of Taiwans economy and mainstay of political and social stability, Continuous upgrading and transformation etc. Government takes the lead in developing longterm visions and feasible action plans to meet the needs of SMEs
33

David Hsu SME2008

Uploaded by

Copyright:

Available Formats

David Hsu SME2008

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

David Hsu SME2008

Uploaded by

Copyright:

Available Formats

Taiwan SME Policies Formulation and Development Strategies

Service. Minding. Esteem. Awareness

2010 Creative R&D Industry

Labor Intensive Industry

Light Heavy Strategic Hi-Tech Industry Industry Industry Industry

Service. Minding. Esteem. Awareness

The Definition of SMEs in Taiwan

Employees < 50 persons

Employees < 5 persons

Service. Minding. Esteem. Awareness

2. The Current Status of SMEs in Taiwan

1,272,508 10,111 7,542 34,326,070 (1,040,183) 25,594,318 (775,585) 8,731,753 (264,598)

97.77 76.66 68.76 29.84 33.91 17.89

Service. Minding. Esteem. Awareness

3. Operating Years of SMEs in Taiwan

91,435 94,036 77,477 70,554 63,851 233,742 279,065 194,546 1,104,706

112,154 104,183 82,234 69,545 64,843 248,300 283,225 207,296 1,171,780

108,610 110,649 87,612 70,895 61,321 245,280 287,444 218,365 1,190,176

125,667 108,989 96,365 79,583 65,055 249,414 298,662 229,959 1,253,694

108,673 121,466 92,503 84,648 71,610 253,746 299,282 240,580 1,272,508

108,320 120,530 91,400 83,272 70,133 247,247 290,121 233,076 1,244,099

8.71 9.69 7.35 6.69 5.64 19.87 23.32 18.73 100

units: no. of enterprises

Service. Minding. Esteem. Awareness

4. SMEs Development Policy Formation in Taiwan

Service. Minding. Esteem. Awareness

5. The Relationship of Entrepreneurship and Economic Growth

Straits and Predicament

Closed Economic Development And Growth

Positive Recycle of Economic Development

Service. Minding. Esteem. Awareness

II. Key Measures for Developing an Entrepreneurial Society

mechanism for supporting entrepreneurial activity & innovation

Middle Layer of SMEs, Ltd. Co.,

Service. Minding. Esteem. Awareness

1-2. Eleven Guidance Programs to Assist SMEs (1/2)

Start-up SMEs Enterprises

Foundation of SMEs 65~70%

Service. Minding. Esteem. Awareness

1-2.Eleven Guidance Programs to Assist SMEs (2/2)

Service. Minding. Esteem. Awareness

1-3 Vision and Strategies

Creating an environment beneficial to the establishment and growth of SMEs

Integrating the SME financing mechanism

Strengthening the SME management guidance function

Service. Minding. Esteem. Awareness

1-4 Award and Commendation

Business Model/Quality Market Share

National Award for Outstanding SMEs Rising Star Award

Taiwan SMEs Innovation Award Business Start-up Award

Service. Minding. Esteem. Awareness

2. Platform of Entrepreneurship and Incubation for SMEs

Vision: To Foster Taiwan as an Entrepreneurial Society

To Develop the Asia Entrepreneurial Development Center (AEDC)

Knowledge and Information Providing

Financing Support for Start-Ups

Service. Minding. Esteem. Awareness

2-1. Incubation Services

Service. Minding. Esteem. Awareness