April 25, 2016

Learning About Business Opportunities in Taiwan

Photo of the Taipei skyline:
Did you know Taiwan is the tenth largest trading partner with the United States? Bilateral trade between the U.S. and Taiwan reached $67.4 billion in 2014, according to U.S.-Taiwan CONNECT. While most Americans are aware of the strong trade relations that exist between the U.S. and mainland China, many people, myself included, are unaware of the business opportunities available in Taiwan for American companies. An event sponsored by the Trade Development Alliance of Greater Seattle (TDA) explored the cross-border relations between China and Taiwan, as well as an examination of the market opportunities that exist for companies based in the Greater Seattle area. This post addresses some of the points presented during the Apr. 19, 2016 event in Seattle, Wash.

Andy Chin, Director-General of the Taipei Economic and Cultural Office in Seattle, talked about how U.S. products are well-represented in the Taiwanese market. Mr. Chin cited examples such as Boeing's long-standing relationship with Eva Airways with the former selling commercial aircraft to the latter and Microsoft's success of not just manufacturing its products in Taiwan, but commercializing its cloud-based services to the island with a population of 23 million.

Upon performing some research for this post, I learned of another dynamic between Microsoft and Taiwan such as the collaboration between Microsoft Research Asia and Taiwanese academia that "began in 2003 with a partnership between National Taiwan University, National Tsing Hua University, and National Chiao Tung University. This alliance led to programs that foster new talent, curriculum innovation, and academic exchanges. In 2006, Microsoft Research Asia extended this collaborative partnership to additional institutions, such as National Cheng Kung University in Taiwan."

Joe Borich, Senior Advisor with Nyhus Communications, said U.S. products are well-represented in the market and noted that Taiwan is a good target market for high-quality, differentiated products and commodity items. He also remarked how Taiwan possesses a comprehensive modern legal system with an independent judiciary. Lastly, according to Mr. Borich, Taiwan contains a number of excellent higher education institutions that produce graduates who are well-prepared for the challenges of working in a global marketplace.

Seattle has maintained a long and storied relationship with Taiwan including the former's sister city relationship with Kaohsiung, Bill Stafford, a Senior Advisor with TDA, explained. He also commented that Taiwan serves as a good location to export to emerging markets throughout Asia. Mr. Stafford further said economic ties between Taiwan and mainland China will continue to improve with the latter increasing its foreign investments in Taiwan over the next few years.

According to the Doing Business in Taiwan: 2015 Commercial Guide for U.S. Companies, a report produced by the U.S. Commercial Service in Taiwan, "Taiwan is a thriving democracy, vibrant market economy, and a highly attractive export market, especially for U.S. firms." Moreover, according to the report, "Mainland China (including Hong Kong) is Taiwan's largest trading partner, accounting for 26.7% of total trade and 18.1% of Taiwan's imports in 2014. The United States is Taiwan's second largest trading partner, accounting for 10.6% of total, including 10% of Taiwan's imports."

The report also provides an overview of the sectors ideal for U.S. export and investment in Taiwan. I was pleased to read: "The Taiwan authorities have identified cloud and mobile computing as the most promising sectors in the Taiwan’s computer software and service industries." The report includes business application software and Software as a Service (SaaS) in its list of Sub-Sector Best Prospects and explains "the Taiwan authorities have identified cloud and mobile computing as the most promising sectors in the Taiwan’s computer software and service industries."

On the topic of openness to foreign investment, the Doing Business in Taiwan report says:
Strategically located between Northeast and Southeast Asia, Taiwan is an important hub for regional and global trade and investment, especially in the high-technology industry. Indicative of its developed and open investment environment, Taiwan ranks in the upper tenth percentile of major global indices measuring ease of doing business, economic freedom, and competitiveness. Taiwan's investment climate has improved in recent years with expanded cross-Strait trade with mainland China and expansion trade links with other partners in the Asia Pacific region, as well as reforms to enhance protection of intellectual property rights and rationalize other investment-related regulations.
My colleagues and I at ROI3 are in the early stages of learning about the opportunities that exist in Taiwan for our SaaS solution, which provide smartphone and tablet users with the ability to learn English language skills and use of the language in business, legal, medical, aviation, and other professional settings. Do you have any advice or lessons learned of doing business in Taiwan?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

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