Taiwan is an island nation with an economy that has been traditionally linked to technology and is now taking a step further to become a global innovation and startup hub. In StartupBlink’s 2020 Startup Ecosystem Report, where we benchmark the ecosystems of 1,000 cities and 100 countries, Taiwan registered the highest debut among new countries ranked (30th in the world), and Taipei’s position increased in 208 spots since 2019. This massive increase in Taiwan’s momentum is solidifying its position as an emerging regional hub, and Taiwan Tech Arena (TTA) is one of the main players behind this trend. We’ve partnered with TTA to write a promotional and diagnosis report to help local a foreign stakeholders gain further knowledge of this interesting startup ecosystem.
A Unique Asian Startup Scene
The Taiwanese startup scene consists of an impressive support system both from every sector in the economy. The Government has set itself with a goal to achieve fast growth of the ecosystem by introducing support organizations and funds, as well as enacting innovative initiatives to make sure Taiwanese startups can fulfill their full potential, and Universities (both public and private) are increasingly getting involved through courses in entrepreneurship and innovation, as well as different programs and initiatives to promote startups.
The private sector is also actively contributing to the growth of the startup ecosystem, mainly through Corporates (such as Asus and Foxconn) that are recognized as global leaders in their field for dozens of years. Those successful companies are now increasingly getting involved in the startup ecosystem with open innovation, acceleration, and investment. Those trends are expected to generate positive returns for the country in the medium and long term, in addition to the major gains that have already been achieved in recent years. There’s also a plethora of other private sector actors working hard on Taiwan’s innovation scene, such as dedicated investors, accelerators, incubators, coworking spaces and events.
Taiwan excels in a diversity of strong verticals in which the country excels, starting from the traditionally successful Hardware & IoT sector, but also expanding to other cutting edge and deep tech categories such as Healthtech, Foodtech, AI and Blockchain, and there are many interesting startups in all those verticals. The ecosystem has also already produced highly successful startups such as retail platform Appier and scooter maker Gogoro.
Where does the Taiwanese Startup Ecosystem Overperform?
We’ve already mentioned some of the main strengths the Taiwanese startup scene has, such as Government support and its status as a global hardware powerhouse, but there are two other really important ones being leveraged to aid in its development: the technical capabilities of the University graduates – Taiwan is home to some of the highest-ranked technical and general universities in Asia, and this is attracting global tech firms to the country or helping graduates use their skills towards taking an entrepreneurial path- and the strong tech network of the ecosystem outside of Taiwan – with high-level Silicon Valley (and other ecosystems) figures having Taiwanese heritage, such as Nvidia’s CEO Jen-Hsun Huang, YouTube co-founder Steve Chen who has recently returned to Taipei, or Joseph Tsai (co-founder of AliBaba).
The main challenges identified that the Taiwanese startup scene must overcome to achieve its goal of becoming an innovation hub are four: the risk-aversion of the population (like in many Asian nations, young people are often encouraged to pursue stable careers and avoid unnecessary risks, making the ecosystem’s pool of talent smaller, both in founders and employees terms), the medium-sized population mindset (hindering founders’ desires to go full-speed international, feeling too comfortable in their medium-sized market and decreasing the country’s chances of producing truly global and game-changing companies in large numbers), the geopolitical situation with China (although if managed well, this could be leveraged to Taiwan’s advantage, like Israel has done) and brain drain (Although not at a massive scale, many talented young people leave to larger ecosystems like China and the US looking for the opportunity of reaching much bigger markets or getting higher-paying jobs).
The exemplary way in which the country has handled the Covid-19 pandemic is allowing Taiwan to leverage its success to boost its startup scene. The economy and level of personal freedom have stayed close to pre pandemic levels, and the whole country has benefitted, including the ecosystem, with some startup events even remaining physical. Taiwan’s success has also benefited its startup ecosystem in other ways, such as the relocation of some investors and entrepreneurs to the island, where they feel safer than in China or the U.S. The branding of the country as one of the world’s most organized and efficient locations to deal with the pandemic will surely attract more attention to the possibility of relocation and increased investment. In StartupBlink’s CoronaVirus Map and Rankings recently released with the Health innovation exchange by UNAIDS, Taiwan has also demonstrated specific success in innovation related to COVID-19 as Taipei ranked 10th globally.
Although Taiwan’s startup scene is not yet a truly global one, there are signs that it could become a very relevant player regionally and globally in the near future. We believe the country is on the right track and we at StartupBlink are very happy to be a part of this story. We hope this report will help share valuable insights for everyone who is considering relocating, investing or learning more about the growing Taiwanese startup ecosystem.
By Ghers Fisman