AGUIDETHE INNOVATIONTOECOSYSTEMOFTAIWAN

1The guide presents the main business opportunities, the mostimportant leads, and most interesting stakeholders, as seenfrom a Danish perspective. We give you a realistic understanding of the local startup scene, based on first-hand experienceand on-the-spot dialogues.
This publication has been developed by Asia House andPREFACE

TechBBQ as part of a series of guides to innovation ecosystems in the China Bay Area and Taiwan, India, Japan, Korea,and Singapore.
The series is published as part of the non-profit initiativeInnovation Lab Asia to improve and enhance cooperation be-This guide gives you a brief introduction
to the Taiwanese innovation ecosystem, with special
focus on Taipei where most of the startups andstakeholders are based.

tween Danish and Asian innovation ecosystems. The project is
supported by the Danish Industry Foundation.
For further information and guidance, contact:
ASIA HOUSEPeter Johansen, Project Manager

TECHBBQ
Lisa Mallner, Lead Consultant

MAIL
hello@innovationlabasia.dk23

WHY TAIWAN?

Taiwan is a world leader in advanced manufacturing,hardware production, and computer technology, and a
key link in the global supply chain for electronics,computers, semiconductors, and mobile phones. It isalso a central hub for shipments and trans-shipments
in East Asia and a major center for advanced R&D.

The business environment of Taiwan is generally stable, andthe costs are lower than in Korea and Japan. Additionally,
Taiwan presents fewer risks in terms of intellectual property
rights compared to mainland China and other parts of Asia.
Many international companies choose to set up branches in
Taiwan due to the ability to access Taiwanese free trade zonesand a favorable corporate tax rate.

45

TAIWANRANKS...

•# 4 on the World Economic Forum’s
Innovation Capability Index 2018•

# 10 on the Global Economic Freedom
Index 2019•# 13 on the Ease of Doing BusinessIndex 2019

Various science and industrial parks and export processing
zones have been set up to expand trade and investment
opportunities through initiatives such as tax incentives, tariff
exemptions, low-interest loans, and other favorable terms.
However, some analysts warn that the current trade dispute
between China and the US, combined with increasing
manufacturing costs in mainland China may impact Taiwan,
whose economy is closely interconnected with that of mainland
China.
Some Taiwanese firms are now moving back home to avoid
American tariffs. At the same time, these firms have received
some benefits from the Taipei government, including financing
and permission to hire more international workers.

67

MAIN ECOSYSTEM OVERVIEWTAIPEI•8The Taipei metropolitan area is thepolitical, cultural, and economic centerof Taiwan and home to a third of theTaiwanese population. The startup
ecosystem is especially concentrated in
the surrounding municipality of Taipei,
with strong clusters in pharmaceuticals,
robotics, and life sciences.

9THEECOSYSTEM
AT A GLANCETAIPEI

Taiwan’s startup ecosystem is not as well-known anddeveloped as neighboring Shanghai, Singapore, andHong Kong, but the island has some unique strengths
for early stage startups looking to scale into Asia.

The ecosystem in Taiwan is characterized by heavy investment
from the public sector and a relatively conservative VC
landscape. And while Taiwan’s startup ecosystem lags behindsome other parts of Asia due to an absence of adventurism
and a uniform pool of talent, it has been exceptionally active
in recruiting foreigners to help grow the burgeoning startupecosystem, mostly from the ASEAN region. This means thatgovernment startup programs are significantly more open tointernationals compared to elsewhere in the region.

1011

FACT&STARTUP

Since 2017, the government has made an ambitious plan totransform Taiwan into a “startup nation” by building a better

FIGURESONECOSYSTEMTHE2019•The value of the Taipei ecosystem isestimated at USD 2.4 billion•

The average amount of funding forearly-stage startups is USD 206,000•

The overseas market penetration is 28%(the global average is 23%)

•The Taipei ecosystem ranks top 5 globallyin terms of local connectedness

startup ecosystem and encouraging more citizens to become
entrepreneurs or join startups. This is being achieved throughvarious programs to foster innovation among young people
and university students.
Taiwan has a highly educated workforce, especially withinengineering and math, as there are many jobs on the island
related to the IT and semiconductor industries. As a rule, theTaiwanese startup community is generally interconnected, inthat almost all startup initiatives receive public financing, andin fact compete for funding and grants from the same pool.
From a Danish perspective, it is worth noting that the public
sector in Taiwan has a strong focus on establishing smart
cities and adopting more sustainable energy sources. The
smart city strategy opens up possibilities for Danish
startups in numerous sectors including IoT, Fintech,Edtech, Transportation and many others. Secondly, thefocus on transforming the energy sector to a greener and moresustainable model paves the way for startups within Energy
and Cleantech, where Denmark has a strong reputation.

1213

SMALL,

SMART&PROGRESSIVE

MAIN LEADSThe Taiwanese government is investing heavily in theinnovation ecosystem and has a dedicated strategy of
attracting foreign talent. These programs are perhaps
the most relevant access points for Danish entrepreneursconsidering Taiwan. Advanced manufacturing is alsointeresting, though it seems only a few government
or private schemes specifically help startups connect
with this ecosystem. Accelerators may help finding theright manufacturing partners.

•Taiwan was one of the first “Tiger Economies”
to emerge in Asia•

Today, Taiwan is a high-income economy with a skilledworkforce and a strong infrastructure•

Taiwan is small; you can drive around the island injust 8 hours•

Taiwan legalized same-sex marriage in 2019•

All public places in Taipei have free wi-fi•

Biking & recycling are very popular•

Garage+ is one of the first accelerator programs estab-Startup@Taipei helps startups access public resourceslaunched an international incubation program. To apply,provided by the Taipei City government. The resources

startups need to register a company in Taiwan and recruit

space that offers multiple accelerator programs thatlished in Taiwan and has set the standard for accelera-

include grants and other types of funding support, manyat least one Taiwanese employee. If they are chosen, theygenerally run for 6 months at a time. Established in 2018

tor programs in the country. The accelerator is one of theof which are open to foreign companies. Startup@Taipei

will get financial support matching the company’s own

and funded by the Ministry of Science and Tech, Taiwan

few privately funded programs available and is especially

was established by the Taipei City Government to boost

fiscal contribution.

Tech Arena aims to be economically self-sufficient by 2022.

strong in the electronics and semiconductor industry.

Taiwan Tech Arena currently collaborates with the French

Their “Startup Global Program” invites international start-•Taiwan Tech Arena is a nonprofit program and coworking•

the city’s startup ecosystem and is run by the National
Association of Young Entrepreneurs.

14and Canadian governments on international exchange ofups to Taiwan to realize their prototypes and enter theStartup@Taipei also helps with business matchmaking andstartups. Furthermore, they have active collaboration with

Asian market. Foreign startups can also get access to a 10-runs a global event called Taipei International Startup Week

the French startup ecosystem and often help startups withday visitation program to meet partners and find co-fund-every November, where startups can pitch and exhibit

their prototyping. Taiwan Tech Arena has also partnered withing opportunities.

to investors and corporates. Furthermore, they haveTechstars to host events.
15

OTHER LEADS
Innovation Lab Asia has established contacts withseveral interesting organizations in Taipei thatmight prove relevant for Danish startups. We canfacilitate further contact if needed.

•Startup Terrace is funded by the Ministry of Economics•Taiwan Startup Stadium caters mainly to Japanese andand is an ambitious project to bring startup ecosystem

Taiwanese startups looking to internationalize and pro-players into one location. While space is still being builtvides an accelerator and coaching program for early stage

and divided, the campus will host both Microsoft and AWS,startups. With about 24% foreign founders and 70% foreign

and accelerators like Startup Bootcamp. Startup Terracecoaches and mentors, the program is globally grounded.

aims to be the world’s largest network of multi-corporate

The program is open to early stage foreign companies if

backed accelerators helping startups scale international-

they have a Taiwanese employee at the C-level.

ly. The facilities will include ample coworking spaces forentrepreneurs.

•InnoVEX is the main startup event in Taiwan and the mostinteresting local event from a Danish startup point of view.

•Startboard is a relatively new program, that seeks to as-In 2019, it attracted more than 18,000 visitors, 500+ VCs

sist foreigners, mainly from South East Asia, in setting up

along with numerous ecosystem stakeholders. InnoVEX

companies in Taiwan to help retain some of the country’s

is a feature exhibit of the computer and technology expo

30,000 foreign students. Startboard helps founders ideatecommonly known as COMPUTEX TAIPEI, a leading globaland begin companies and are partnered with local stake-

ICT and IoT conference. In 2019, it set a record of more

holders who can assist founders with R&D. Startboard is alsothan 42,000 visitors over five days, with gaming as thea major player in the startup ecosystem, building and host-number one interest of attendees.

ing events for foreigners looking to enter the ecosystem.
1617

OTHER GATEWAYS &ACCESS POINTS•Taiwan Rapid Innovation Prototyping League for En-•The Institute of Information Industry is a governmen-

trepreneurs (TRIPLE) is a matchmaking platform con-tal organization that offers industry incubation services

necting global hardware startups with reliable hardwareand can help connect startups to capital and partners.

partners & resources in Taiwan. It currently has more thanThrough their program CONNECT TAIWAN, they operate

480 industrial members with rich product development

incubation centers that provide six major categories ofand manufacturing experience to work with hardware

services for the startup companies: regular assistance,startups to commercialize their innovation.

value added innovation, incubation networking, investment matching, and international cooperation.

•KAFNU is a new coworking space with lux facilities, including places to sleep, a gym, and a restaurant. Theyalso host daily events, many of which are startup related.

•Appworks is an accelerator founded in 2009, that has
seen more than 300 startups through their accelerator
programs. Appworks is increasingly focusing on AI andBlockchain startups. The program is foreigner friendly, with 20-30% of founders in each batch coming fromoverseas. The accelerator also has its own VC.

1819

STRONGHOLDS& OPPORTUNITIESTaiwan’s classic stronghold is hardware manufacturing. Two of
its largest companies - Foxconn and TMSC - are world leaders
within contract manufacturing of electronics and computer
chips, and semiconductor production is a key industry in Taiwan.
These strongholds are reflected in one of the chosen focus
sectors of this report: Advanced hardware manufacturing.
The two other focus areas of this report are Greentech andSmart cities. Both are considered classic Danish strongpoints,and both are particularly relevant for Taiwan right now.
As for so many parts of the world, Taiwan is in the midst of arapid drive toward sustainability. For Taiwan, this transition
seems particularly ambitious, especially in the field of smart
cities and renewable energy. Thus, these policy initiatives
may pave the way for strong market opportunities for Danishstartups and SMEs.

2021

TAIWANHARDWARE
MANUFACTURING•

MAKES...

•

75% of all personal computers•

50% of all LCD screens•

25% of all semiconductors•

20% of all smartphones

Though Shenzhen in the China Bay Area is astrong contender for rapid prototyping and hardware manufacturing, Taiwan is a viable alternative for Danish startups. Generally, the Taiwanese are more accustomed to dealing with Europeans
and speak better English. Being smaller, Taiwan alsoenjoys a more centralized setup for advanced facilities.

•For Danish companies, there are some advantages tomanufacturing in Taiwan over mainland China. IPR isconsidered stronger in Taiwan than in mainland China andmanufacturers are experienced in meeting high standards for cutting edge technology products.

•Most of Taiwan’s exports are intermediate goods, usedin the supply chain of other regions, mainly mainland
China. Thus, semiconductors, flat panels, various other types of electronic components, together with the finished electronic products, account for 65% of Taiwan’s totalexports there.

2223

GREENTECH•

Taiwan’s current energy production is unsustainable and•The government is also promoting a dramatic rethinking of

air pollution is worsening. The island relies heavily on im-energy transmission and storage. For instance, the govern-ported energy, expensive subsidies, and has a high volume

ment power company Taipower is installing smart metersof greenhouse gas emissions. Taiwan lags its peers in de-to allow remote reporting of electricity consumption data

veloping energy substitution technologies, such as Carbon

as part of an implementation of advanced metering infra-

Capture and Storage, and is very keen to find solutions thatstructure.

may come from foreign companies.
••

Thus, Danish startups within the field of semiconduc-

The Taiwanese government has made green energy a clear

tors, battery storage, or digitizing grids may find Tai-priority and is committed to increasing renewable energy

wan an interesting destination.

sources from 3% to 20% by 2025, reducing carbon emissions by 20% of 2005-levels by 2030, and phasing out nuclear energy.
•Thus, the Taiwanese government will need to invest heavily
in windmills, solar cells, and other Greentech solutions, andis open to innovation. This will provide real opportunities for
Danish startups in the years to come.

2425

FLAGSHIP

SMART CITIES•The Taiwanese government has made smart cities a pre-•COMPANIES•Foxconn, the world’s largest electronics contract manufacturingcompany•

TSMC, the world’s largest contractchipmaker•HTC, ASUS, Acer Computers

Taiwan is seeking to become the global hub for smart

rogative and new smart-city digital technologies involving

city development, where foreign researchers andthe Internet of Things are being adopted with the aim of im-companies could experiment and develop smart city

proving economic development through industrial trans-applications. Thus, the Taipei Smart City program helps

formation. A smart-machinery center has been establishedforeign companies run a pilot using government infrastruc-in the city of Taichung with the aim of increasing Taiwan’sture. In addition, Taiwan’s annual Smart City Summit & Exposmart manufacturing capabilities.

is the largest platform dedicated to smart city solutions inAsia.

•The transport sector is being revolutionized by smart city
technologies. Examples include the eTag electronic toll collection system on freeways, the EasyCard payment platform for transportation, the Wi-Fi system on the Taoyuan
Metro, and the electronic parking space monitoring thatcollects information, making vehicle traffic in the city more
efficient.

•The national health card has been equipped with a chip that
contains information on the full medical history of the cardholder. The chip allows doctors to see the patient’s medical
history and drug prescriptions, communicate directly with
the insurer, and issue a payment.

2627

This report has beendeveloped by

In a collaboration
betweenWith support fromAsia House
28|

Indiakaj 16, Copenhagen|www.innovationlabasia.dk|

hello@innovationlabasia.dk