There is no doubt that Taiwan’s tech and startup landscape is a dynamic, thriving, and rapidly growing ecosystem. According to the 2022 Taiwan Startup Ecosystem Survey published by PWC and the Taiwan Institute of Economic Research, Taiwan tech startups excel in R&D and commercialisation. When evaluating the local startup ecosystem and international competitiveness from an innovation standpoint, Taiwanese startups were observed to excel in “innovation and product technology R&D capabilities” and “commercial competence” compared to foreign startups.

The primary hurdles for domestic startups involve market expansion and revenue increase, with a notable focus on revenue growth (56.4%), broadening their customer base (47.4%), and enhancing profit margins (37.3%). Additionally, locating suitable strategic partners (32.1%), venturing into global markets (24.6%), and attracting talent pose challenges for Taiwanese startups. (Source: PWC)

Innovation therefore cannot be confined to local markets. Startups, to grow, need the mutual partnership of other exciting ecosystems to foster growth opportunities and pursue success. Cross-country collaborations bring a lot of benefits in accelerating digital transformation brought about by unlocking new market opportunities in previously unfamiliar terrain.

As such, startups pursuing growth trajectories are inclined to explore this path despite the challenges that may come with it.

Southeast Asia: An exciting market for Taiwan

With a history of fostering innovation, a robust and agile market, and a dynamic tech landscape, it comes as no surprise that Taiwan has set its eyes on Southeast Asian markets due to its advanced progress. As shown in the rise of unicorns in recent years, the region’s diverse market offers opportunities for unique solutions and cross-border collaborations, particularly in spaces where Taiwan thrives the most such as manufacturing.

Singapore alone is a playing field for public and private entities actively engaging with startups in the region, further validated by ranking #7 in the Global Innovation Index 2022. With the combined market access of other locally fostered economies, Forbes predicts that by 2025, Southeast Asia’s technology startups could reach an astounding valuation of US$1 trillion by 2025, trebling from US$340 billion in 2020.

Also read: Bridging Japan and Southeast Asia’s tech landscapes through the ME Innovation Fund

This predicted potential is easily accelerated through startup regional expansion and potential partnership opportunities. Mutual support between Taiwan and Southeast Asia can create startups that are ready to take on a global status. Southeast Asia can provide market opportunities and exposure, while Taiwan’s ecosystem aids through product development and ICT corporate cooperation.

Kao Shien-Quey, Deputy Minister of the National Development Council (NDC) – Taiwan, describes the market by expressing that, “a lot of capital and talent [are] flowing into the Southeast Asian countries. There are solutions utterly leveraging cutting edge technologies such as AI, blockchain, and 5G,” underscoring how the significant expansion of these sub-sectors are recognised on top of the success of existing digital economies such as fintech and e-commerce.

Taiwan’s unique advantage in advanced technologies and solid industrial foundation is further strengthened thanks to the support of a robustly supportive ecosystem, particularly through the help of Taiwan’s NDC. 

Connecting the dots for thriving ecosystems to foster global potential

NDC launched Startup Island TAIWAN in 2019 to attract investment and development of startup communities in Taiwan. The initiative has worked to lay out networks, promote exchanges, and enhance the visibility of Taiwan’s innovation in international society. Furthermore, NDC is collaborating with government departments such as the Ministry of Economic Affairs and the National Science and Technology Council to enhance their initiatives’ scope.

This year, the NDC selected 13 model companies from more than 200 nominated candidates to undergo Startup Island TAIWAN’s “NEXT BIG” program. This initiative aims to identify and promote benchmark startups recommended by the community and industry leaders. The awarded companies cover a wide range of fields from educational technology, health management, and AI, to cybersecurity.

Deputy Minister Kao emphasizes that “Variety is the need and main source for local startups if they want to pursue and accelerate the process of digital transformation. We provide support from funding (through the National Development Fund), mentorship, and talent recruitment.” Startups in the program are invited to take advantage of these resources in order to go global, attract international investors, and eventually exit with an IPO.

Also read: Expanding the possibilities of metaverse with RAPUTA

Supported by President Tsai Ing-wen, the Taiwanese government has continuously updated their strategies to create a better investment environment and support companies during her presidency. In this way, she believes that Taiwan is speeding up to become the rising star of startups in the near future, and hopes Taiwan can be a world leader in innovation. Their commitment extends a crucial signal for Southeast Asian startups to capitalize on present and future opportunities for international development.

This is exemplified in recent collaborative efforts wherein Southeast Asian startups are exposed to potential partnerships through the presence of the Taiwanese delegation in SWITCH Singapore. Southeast Asian startups, especially those in more traditional markets, can also benefit from overseas expansion by leveraging Taiwan’s increased R&D and market support in order to build resilience in early product penetration. These strong linkages can create more options for early-stage companies targeting B2B and B2C markets, and provide wider job opportunities in both technical and digital fields. This is the kind of collaboration Deputy Minister Kao is envisioning to bridge successfully in the long run.

Additionally, Taiwan’s long-standing deep business ties with both the US and Japanese markets can potentially be leveraged by Southeast Asian startups. This network is imperative in building the right infrastructure and foundations. Deputy Minister Kao iterates that collaboration can exist, “if not just in technology sharing, then also in financing and talent recruitment. This can form the triangle of resources that would benefit general contractors from different regions.”

Slow and steady growth for ecosystem players in Taiwan and Southeast Asia

Startups face a high risk of failure and challenges at the earlier stages of startup growth. This is where both local and international ecosystems can intervene the most. Taiwan’s government policies bring this to fruition through increased assistance and entrepreneurial resources, as shown by their recent establishment of international startup clusters, financial subsidies, and knowledge-sharing programs.

Also read: Set sail with intellectual property: Your business’s journey to success

Startup Island TAIWAN and by extension, NDC’s presence, signifies Taiwan’s commitment to elevating its global recognition from a ‘Startup Island’ to a prominent player. With a unified brand identity and public-private partnerships, the objective is to demonstrate Taiwan’s innovation potential on the global stage.

For further details, please visit the Startup Island TAIWAN website: https://startupislandtaiwan.info/

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This article is produced by the e27 team, sponsored by Startup Island TAIWAN

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