2014/SMEWG39/011 Agenda Item: 11.1.3 The Strategy of Promoting Born - Global and High- Growth SMEs Purpose: Information Submitted by: Chinese Taipei 39 th Small and Medium Enterprises Working Group Meeting Nanjing, China 3-4 September 2014
Chinese Taipei September, 2014 1. Highlight of High Growth SMEs 2. High Growth SMEs in Chinese Taipei 3. Promoting High Growth SMEs in Chinese Taipei 1 1
According to recent studies around the world, high growth enterprises, while represent only a small percentage of all firms, yet they have contribute significantly to new job creation and productivity boost. According to government data, from 2010 to 2012,63% in net job increase in Chinese Taipei was contributed by High Growth SMEs. 2 Definitions and Contributions of High Growth Enterprises Adopting OECD s definition : compound average annual (sales or number of employees) growth rate or > 20% for a three year period, with at least 10 employees at the beginning of the observation period High Growth SMEs in Chinese Taipei Numbers Geographics Industries According to Fiscal Information Agency: During 2008-2011, there are 12,280 HGSMEs During 2009-2012, there are 14,721 HGSMEs From 2009 to 2012, 21.6% of all SMEs are high growth, in which 50% is in the northern part, and 30% in the middle part of Chinese Taipei Manufacturing is the main player in HGSMEs. High growth in the service sector are from wholesale and retail, followed by professional, scientific and technical services. 3 2
Manufacturing has a higher percentage of HGSME than Service Sector The percentage of HGSME in the manufacturing sector increases from 16.6% to 25.1%, comparing the period of 2008-2011 and 2009-2012, while there was no significant change in the service sector High growth enterprises are not all in high-tech industries Percentage of HGSME in food manufacturing industry: > 20% Beverage manufacturing industry: 20% electronic component manufacturing industry, computer, electronics and optics manufacturing, and pharmaceutical manufacturing industry: ~15% The majority of HGSMEs is over 6-year-old Not all high growth SMEs are young enterprises: percentage of HGSMEs of 6-11 year-old, 11-20 year-old and more than 20 year-old are 26%, 34.8% and 35.7%, respectively, implying that with proper management strategy, either young or old firms can achieve high Percentage of gazelles has plunged Percentage of gazelles (high growth firms less than 5 year-old) has dropped from 15.8% during 2008-2011, to 3.3% during 2009-2012. Only 19% of the gazelles during 2009-2012 are in the tech field. 4 Key Factor for High Growth Innovation Understanding of Markets Management Ability Financial Stability Key Employee Infrastructure Policy Support Others 64% 46% 43% 31% 28% 13% 10% 1% Future Priority Strategy Store Expansion Strategic Alliance Joint venture Invest in RD Hiring more Social media and network marketing Traditional ad marketing Outsourcing M&A 36% 28% 16% 28% 22% 21% 16% 7% 1% Source: Taiwan Institute of Economic Research, TIER(2013) 5 3
High Growth Mode Customization and Differentiation Policy Recommendation 1.Tech assistance: ICT tools for market researches for flexibility and differentiation 2.Design assistance: design platforms (userexperiences and trend) Core Technology 1.Innovation: cutting-edge innovation and supply chain integration 2.Finances: equipment renewal 3.Expansion: land and finance assistance 6 High Growth Mode Development of Add-ons and New Application Exploration of New International Markets Policy Recommendation 1.Inter-industry networking: human resource pools and business opportunity 2.Cooperation between Academics and Business: resources for SBIR, SIIR, etc. 3.Activation of Intellectual Property: Technology Marketplace 1.Startup Stage: international network of incubators and accelerators 2.Expansion Stage: marketing professionals 3.Pioneer Stage: red tapes, tariffs and intellectual property protection,etc. 7 4
Vision Position Support high growth SMEs to become the major force of innovation, job-creation and regional balance Support the development and job-creation of high growth SMEs Promote high growth SMEs to become potential hidden champions Boost high growth SMEs to become highlights of regional development Develop common key factors and functional assisting resources for global markets Promote high growth startups via the leverage of post-incubation mechanism Accelerate the globalization of high growth SMEs Bridging international resources and funds to build global high growth SMEs Support SMEs with high growth potentials Optimize the business environment Reinforce operational capacity Incubate innovative startups Leverage inte-ministry resources to incubate startups with potentials 9 5
1. Build Cornerstone Optimize the business environment, including cutting red tapes and other regulatory adjustments to improve the growth system 2. Consolidate Capacity Cement high growth SMEs leading position by reinforcing supply chain management, such that high growth is translated into high survival. 3. Facilitate Connections Facilitate inter industrial networking, business opportunity matching and paradigm learning Improve the mechanism of innovation commercialization 4. Globalize Incubate more born global startups via introducing international resources and funds Assist SMEs to localize and market in international markets via available foreign affair resources 10 Thank you. 6