Taiwan SME Policy Formulation and SME Development Service. Minding. Esteem. Awareness CACCI Chambers Operation Course Taiwan SME Policy Formulation and SME Development Dr. Robert S. Q. Lai Director General Small and Medium Enterprise Administration Ministry of Economic Affairs Taiwan November 27, 2007

CONTENTS I. Foreword II. Experience of Taiwan’s Economic Development III. Government Policies IV. Role of SMEs in 2006 V. Policy Formulation for Fostering SMEs VI. Key Measures for SMEs Development VII.Conclusion and Suggestions

I. Foreword About Taiwan Area: 36,000 sq. km Population: 22.87million* Per Capita Income: US$16,471* Foreign Trade: World’s 16th- largest trading nation* Number of Enterprises: 1.27 million* Number of SMEs: 1.24million* Ratio of SMEs to All Enterprises: 97.8%* *Statistics in 2006

II. Experience of Taiwan’s Economic Development Sources: Statistics Indicators of Major Countries, Statistic Department, MOEA, March 2007

Sources: 1. Taiwan Statistical Data Book 2006, CEPD, June 2007 Unit: % Sources: 1. Taiwan Statistical Data Book 2006, CEPD, June 2007 2. Statistics Indicators of Major Countries, Statistic Department, MOEA, May 2007 3. Directorate General of Budget, Accounting and Statistics, 2007

3. Policies and Strategies in Different Stages of Taiwan’s Economic Development (1) Import-Substitution / Labor-Intensive Industry : 1953-1962 (2) Export-Expansion / Light Industry : 1963-1972 (3) Import-Substitution / Heavy Industry : 1973-1980 (4) Industry Upgrade / Strategy Industry : 1981-1990 (5) Hi-Tech Industry : 1991-2000 (6) Creative R&D Industry : after 2001

(1) Economic Development Stages Labor Intensive Industry 4. Economic Developing Process of Taiwan (1) Economic Development Stages Admitted to WTO Jan 2002 2010 1950 1960 1970 1980 1990 2000 Labor Intensive Industry Creative R&D Industry Light Industry Heavy Industry Strategic Industry Hi-Tech Industry 2) 1950 – 2000 Economic Growth Rate : 8.1%(Average) 2001 Economic Growth Rate : - 2.18% 3) 2002 Economic Growth Rate : 4.6% 2003 Economic Growth Rate : 3.43% 2004 Economic Growth Rate : 6.07% 2005 Economic Growth Rate : 4.09% 2006 Economic Growth Rate : 4.62% 4) 2006 GDP Structure : Service Sector 71.65% Industry Sector 26.81% Agriculture Sector 1.53%

5.The Current Status of SMEs in Taiwan All enterprises SMEs % of SMEs No. of enterprises 1,272,508 1,244,099 97.77 Total employments (thousand persons) 10,111 7,751 76.66 No. of employees 7,542 5,186 68.77 Total Sales (NTD million) (USD million) 34,326,070 (1,040,183) 10,241,215 (310,339) 29.84 Domestic Sales (NTD million) 25,594,318 (775,585) 8,678,992 (262,999) 33.91 Export Sales (NTD million) 8,731,753 (264,598) 1,562,224 (47,340) 17.89 Source: White Paper on SMEs, 2007

6. Enterprise Ages in Taiwan units: no. of enterprises Age 2002 2003 2004 2005 2006 Total enterprises SMEs % of Less than 1 year 91,435 112,154 108,610 125,667 108,673 108,320 8.71 1 – 2 years 94,036 104,183 110,649 108,989 121,466 120,530 9.69 2 – 3 years 77,477 82,234 87,612 96,365 92,503 91,400 7.35 3- 4 years 70,554 69,545 70,895 79,583 84,648 83,272 6.69 4- 5 years 63,851 64,843 61,321 65,055 71,610 70,133 5.64 5- 10 years 233,742 248,300 245,280 249,414 253,746 247,247 19.87 10- 20 years 279,065 283,225 287,444 298,662 299,282 290,121 23.32 Over 20 years 194,546 207,296 218,365 229,959 240,580 233,076 18.73 Total 1,104,706 1,171,780 1,190,176 1,253,694 1,272,508 1,244,099 100 Source: Collected from Ministry of Finance Tax Data Center Business Tax statistics.

7. SME’s Development Policy Formation in Taiwan Trends of Industrial Development and Transformation Innovation Drive (Knowledge) Investment Drive (Capital) Resource Drive Current Stage Of Taiwan Years

8. Relationship of Entrepreneurship & Economic Growth Transformation and Upgrade Economic Development & Growth Existed Enterprises Closed Straits and Predicament Moved out Enterprises and Industries Replenish Establish another new business Emergence of new SMEs with technology-oriented & high added value Start-Ups Positive Recycle of Economic Development

III. Government Policies 1. Challenge 2008: National Development Plan ( 336 sub-plans at NT$2.5 trillion budget ) 4 Major Investments 10 Major Plans (1) Cultivate Talent with View of Internationalization & Innovation Ability 1 e-Generation HR Training Plan (2) R&D and Innovation to Develop Taiwan into R&D and Global Supply Center of Products with High Value-added 2 Culture Innovation Industrial Development Plan 3 International Innovation and R&D Base Plan 4 High value-added Industrial Plan (3) International Logistics to Build Taiwan as Regional Operation Headquarters 5 Double Tourists Plan 6 e-Taiwan Plan 7 Operation Headquarters Plan 8 Island-wide Transport Skeleton Plan (4) High-quality Living Environment to Build up Taiwan Barrier-free Sustained Living Environment 9 Conserve Water Resources & Ecology 10 New Urban Community Construction Plan

2. New 10 Construction Projects Investment Innovation, R&D, HR 1 Top-ranked Universities & Research Centers (NT$50Billion) At Least 15 Departments and Institutes Rank No.1 in Asia in 5 Years. At Least One University Ranks Top100 Worldwide within 10 Years Sites in Northern, Central, Southern & Eastern Taiwan 6,000km Seamless Broadband Twin-nets Held Taiwan Expo 2008 Knowledge Innovation, Industry Cultural 2 International Arts & Popular Music Center(NT$33.4B) 3 M Taiwan Plan(NT$37B) 4 Taiwan Expo(NT$30.1B) 5 Convert Taiwan Railway Into High Speed Railroad System (NT$39.9B) 6 Third-stage Highway Program(NT$43.9B) 7 Convert Kaohsiung Harbor into Continental Container Shipping Center(NT$24.2B) Competition, International Logistics Global Turn in 8 Phases and Develop 3 New Branches Develop Ilan-hualien-taitung-Nantou Tourism Area Facilitating Daily Living Circles of Residents Construction of Deep-water Harbor, 15,000TEU Container Yard Construct 10 Rapid Transit Systems Pipe Rate of Waste Water Sewerage from 10.7% to 27.3% 4 Great Lakes in Taoyuan, Yunlin, Tainan, Kaohsiung-pingtung. Desalting Plant In Kinmen, Matsu, Penghu & Hsinchu Science-based Park Environment, Convenient Sustained Living 8 Rapid Transit Systems for Northern, Central & Southern Taiwan(NT$142B) 9 Waste Water Sewerage System(NT$39.4B) 10 Ground Reservoir & Desalting Plant(NT$31.5B)

3. Develop Service Industry to Enhance Employment & Upgrade of Living Quality Target & Focus Annual Growth of Service Industry at 6.1% Annual Growth of Knowledge Intensive Service Industry at 8.0% Industry Assistance 1. Finance 2. Logistics & Transportation 3. Communication & Media 4. Medical Service & Care 5. Personnel Training, Dispatch & Property Management 6. Tourism, Sports & Amusement 7. Culture Innovation 8. Design 9. Information 10. R&D 11. Environment Protection 12. Engineering Consultancy strategies 1. Deregulation 2. Infrastructure Environment 3. Industrial Policy 4. Incentives for Investment 5. Releasing Public Resources 6. Human Resource Development 7. Instigation of Vitality of Private Sector 8. Expansion of Demand 9. Mechanism of Innovation, R&D Ministry of Economic Affairs is the Principal Government Sponsoring Agency for Such Service Industries as Logistics, Cultural Innovation, Design, Information, and R&D

4-1 National development goals and vision The Executive Yuan has reviewed and overhauled the country's socioeconomic framework and developmental direction in response to the rapidly changing socioeconomic environment, both in Taiwan and overseas. With a "prosperous, just, sustainable, and beautiful Taiwan" as its new vision for national development, the government plans to implement a National Development Package Program in three stages, each lasting three years. This program is the government's systematic development blueprint for the period of 2007 to 2015. Accordingly, the MOEA has formulated the "Stage I: Three-Year Sprint Program－ Industrial Development Package Program" in accordance with the Executive Yuan's two administrative priorities of “big investments" in Taiwan and caring for the disadvantaged through a policy of “big warmth." The MOEA will focus its efforts on the two flagship programs of "Building a Superior Investment Environment " and "Initiating a New Era in Industrial Development," and hopes to achieve the per-capita GDP goals of US$20,000 by 2009 and US$30,000 by 2015.

National development goals and vision Development goals for 2015 5% average annual economic growth & US$30,000 per capita GDP Vision Goals 2006 2015 Industrial structure (％) Agriculture 1.53 1.2 Industry 26.81 22.7 23.02 20.0 Services 71.65 76.2 Real growth rate (％) 5.4 1.0* 6.9 3.9* Manufacturing 7.2 4.3* 3.7 5.5* A prosperous, just, sustainable and beautiful Taiwan Manufacturing * Note: The growth rates of industries in 2015 are the average growth rates from 2006 to 2015.

Development goals for 2009 US$20,000 per capita GDP 2006 2009 1. Industrial structure (％) Agriculture 1.53 1.5 Industry 26.81 24.1 Manufacturing 23.02 20.8 Services 71.65 74.4 2. Real growth rate (％) 5.4 1.0* 6.9 4.2* 7.2 4.9* 3.7 5.5* 3. Energy efficiency 1. Energy productivity (NT$/1 liter oil equivalent) 111.62 116.3 2. Energy intensiveness (1 liter oil equivalent/NT$1,000) 8.96 8.6 * Note: The listed growth rates of industries in 2009 are the average growth rates from 2006 to 2009.

Concepts Promoting high-value output in all industries; upgrading industries across the board. 2. Promoting Taiwan brands; creating profit via product differentiation. 3. Integrating manufacturing and services, boosting industrial capacity. 4. Improving energy efficiency, pursuing a win-win situation for energy, industry, and environmental protection. 5. Emphasizing social justice and balanced industrial development.

4-2 Current major economic policies ◎ Providing land on preferential terms Building a superior investment environment ◎Ensuring an ample labor supply ◎Providing funding assistance ◎Improving efficiency of the environmental impact assessment (EIA) process ◎Establishing mechanisms for encouraging private investment Initiating a new era in industrial development ◎Development of emerging industries ◎Industrial upgrading and transformation ◎Balanced industrial development

IV. Role of SMEs in 2006 1. Criteria for Identifying SMEs SMEs Micro Business SECTORS Basic Exception Manufacturing, Construction, Mining, Quarrying Capital < US$2.3 Million Employees < 200 persons Employees < 20 persons Commerce, Service Preceding year revenue < US$2.9 Million Employees < 50 persons Employees < 5 persons

2. Statistics of SMEs in Taiwan Source: White Paper on Small and Medium Enterprises in Taiwan, MOEA

3. The Age of Most SMEs is 10 to 20 Years, which Shares 23.32% in SMEs. The Age over 20 Years Shares 18.73%. And the Ownership Structure is mostly of the Single-owner Type（ 58.33% ） 4. The Number of newly Start-up SMEs is 108,320 in 2006. SME Maintains its Vitality and Spirit of Entrepreneurship 5. Average Number of Persons Employed by SMEs is 6.23 (27.16 in Manufacturing Sector)

6. Government Assistance (1) After getting the assistance measures of management, financing & credit guarantee, etc., many SMEs become large enterprises. (2) Among them, 226 enterprises listed on Taiwan Stock Exchange market, 276 listed on GreTai Securities market, 141 listed on Emerging Stock Securities market. (3) For example, acer and Foxconn are the benchmark enterprises.

Layer of SMEs, Limited Co., 27~34% Top SMEs, Incorporation Co., 1~3% V. Policy Formulation for Fostering SMEs 1. Philosophy – Service, Minding, Esteem, Awareness 65~70% Foundation of SMEs Middle Layer of SMEs, Limited Co., 27~34% Award Strategy Guidance Strategy Top SMEs, Incorporation Co., 1~3% Grouping Strategy 1. National Award 2. Rising Star Award 3. R&D Award 11 Guidance Systems 1. Mutual Cooperation 2. Industry Cluster 3.Local Featured Industry 4.Financing Programs Start-up SMEs Enterprises mechanism for supporting entrepreneurial activity & innovation

Developing Environment 2. Vision and Strategies Create Sound Developing Environment of SMEs Set up A Platform of Entrepreneurship and Incubation for SMEs Enhance the Application Ability of Information Technology of SMEs Entrepreneur Park for the Growth and Development of SMEs Strengthen the Guidance Function of Management for SMEs Implementation of Financing Support Mechanism for SMEs

Business Model/Quality 3. Award and Commendation Business Model/Quality National Awards of SMEs Market Share Rising Star Award R&D SME Innovation Research Award Excellent SBIR Creation/ R&D Alliance/ Industry Upgrade/ R&D Achievement/ Industry Contribution Awards Innovation Business Start-up Award

4. Measures in Strategies (1) Creating a Healthy Environment for the Development of SMEs a. Advocating the fair laws for SMEs b. Research on and analysis of SMEs’ business environment c. Promotion of general planning affairs

(2) Building a Platform for Enterprise Start-up and Incubation a. Establishment of a mechanism for supporting entrepreneurial activity and innovation b. Strengthening the SME innovation and incubation function c. Strengthening SME Manpower Resource Development d. Participation in international activities and cultivation of international SME talent

(3) Enhancing SMEs’ Information Technology Capabilities a. Strengthening SMEs’ information management capabilities b. Promotion of knowledge management applications c. Strengthening SMEs’ quality management capabilities

(4) Strengthening the SME Management Guidance Function a. Strengthening management quality and promoting upgrading and transformation b. Helping SMEs to secure business opportunities of government procurement c. Development of industries with local characteristics d. Promotion of mutual assistance between enterprises e. Helping small enterprises to survive and develop

(5) Integrating the SME Financing Mechanism a. Strengthening the functions of the One-stop Service Center b. Holding various SME Joint Services to help SMEs solve financing problems c. Encouraging the development of sound financing and accounting systems d. Promoting Credit Guarantee Fund, Joint Assistance Fund to offer SMEs various diagnosis, financing and credit guarantee e. Establishing trust investment account for start-up enterprise and incubation

(6)Balanced industrial development  SME development vision Vision, strategies and goals for 2009 1.35 million SMEs in Taiwan earn over NT$13.8 trillion and employ more than 7.99 million persons 1.24 million SMEs in Taiwan earn over NT$10 trillion and employ more than 7.75 million persons Goals 2006 2009

Assisting weak industries Guidance for local industries Specific measures Developing and diffusing common technologies and materials. Examples: Application of new functional materials in bamboo carbon textiles and germicidal, odor-reducing textiles. Promotion of MIT certification; enhancement of image of products with common marks. Examples: Taiwan-made “Shoe Mark," “Towel Mark,” “Sock Mark,” etc. Strengthening product labeling to prevent poor-quality foreign goods from damaging local markets. Examples: Requiring that imported towels bear labels and shoes bear brands; strengthening inspection. Use of a trade relief mechanism to assist ailing industries. Examples: Towels, shoes Assisting weak industries Guidance for distinctive local industries Establishing special zones for specific traditional industries; promoting the formation of clusters. Glass zone: Expected to attract 25 companies and investment of NT$6 billion; will generate annual sales of NT$12 billion and create 1,000 jobs. Sock zone: Guidance is being provided to 1,000 companies with a total annual production value of NT$3.12 billion. Guidance for local industries Incubation of innovation and value-added Establishment of four incubation support centers and provision of assistance to 2,000 innovative, globally competitive enterprises. Narrowing the digital gap among industries Assistance for the development of 120 industrial e-communities and the use of e-commerce by 75,000 SMEs. Helping SMEs improve quality Guidance for the establishment of 120 industrial quality clusters (with more than 1,200 companies), and assistance for more than 60 enterprises in passing international quality certification. Guidance for SMEs

VI. Key Measures for SMEs Development 1. Eleven Guidance Programs to Assist SMEs (1) Finance and Credit Guidance System (2) Management Guidance System (3) Production Technology Guidance System (4) Research & Development Guidance System (5) Information Management Guidance System

(6) Industrial Safety Guidance System (7) Pollution Control Guidance System (8) Marketing Guidance System (9) Mutual Support & Cooperation Guidance System (10) Quality Enhancement Guidance System (11) Business Startup & Incubation Guidance System

2. Advocacy of SMEs --the Fair Legal Environment (1)Undertake Research and Collect Information on SME- related Legislations. The Statue Governing the Development of Small and Medium Enterprises Is Revised frequently in Line with Changes in the Overall Environment. (2)Work with SMEs and SME Associations to Draw up Legislations Relating to SMEs, then Making Decisions in Small and Medium Enterprise Policy Review Committee. Advocacy of SMEs Legal Rights for their Healthy Development.

3. SME Credit Guarantee Fund (1) Established in 1974, Provide Credit Guarantees to SMEs which Are Promising but Short of Collateral. Help Obtain Finance from Financial Institutions (2) Credit Guarantee Service Statistics Unit: No., NT$billion No. of guaranteed enterprises 151,260 No. of cases guaranteed 3,290,714 Amount guaranteed 3,844 Amount financed 5,685 * Statistics from 1974 to the End of August, 2007

4. Platform of Entrepreneurship and Incubation for SMEs Vision: To Foster Taiwan as an Entrepreneur Society Incubation Services To Develop the Asia Entrepreneurial Development Center (AEDC) Knowledge and Information providing Financing Support for Start-ups

A. Help SMEs Access Resources of Innovation and Entrepreneur 4-1 Incubation Services (1) Purpose A. Help SMEs Access Resources of Innovation and Entrepreneur B. Enhance SMEs Ability in R&D and Start-up New Business C. Facilitate More Competitive SMEs and Promote Economic Development

(2) Goals of the Policy Creating a Learning Mechanism for Starting New Business. Building up a Society of Knowledge-based Entrepreneurship (3) Strategies of the Policy Building the Mechanisms of Knowledge and Information Provision for Entrepreneurs. Enhancing the Function of Incubation Service. Assisting the Acquirement of Financing for Start-Ups.

A. Definition & Type of Incubation Center (4) Enhancing the Function of Incubation Service(1/6) A. Definition & Type of Incubation Center 1) Definition: Incubation centers are locations for the cultivation of innovation businesses, products and technologies, and for helping SMEs to upgrade and transform themselves. By providing start-ups with office space, instruments, equipment, R&D technology, helping them to secure financing, and by providing management consulting and other business services, they facilitate the effective integration of resources, helping to reduce the costs and risks that start-ups have to bear in the early stages of business development, and increase the possibility of new businesses successful rates. 2)Type: 78% There are 98 incubators in Taiwan, nearly 80% of which were located in universities. 9% 9% 4%

3)Number of Incubators in Taiwan (4) Enhancing the Function of Incubation Service(2/6) 3)Number of Incubators in Taiwan

B. Function of Incubators (4) Enhancing the Function of Incubation Service(3/6) B. Function of Incubators To reduce risks and expenses of investment and increase successful rate of start-up enterprises. To foster new products, new business-model and new technology. To provide guidance in commercializing R&D achievements. To provide a location for cooperation of academia and industries. To provide testing services and speed up the development of products. To provide training courses, information and consultation.

C. Incubating Domain in Taiwan (4) Enhancing the Function of Incubation Service(4/6) C. Incubating Domain in Taiwan

D. Performance of Incubation Services (4) Enhancing the Function of Incubation Service(5/6) D. Performance of Incubation Services Year Performance 2004 2005 2006 1997~2006 Input 1.Subsidy for Incubation Center (NTD, billion) 1.86 2.14 1.64 15 Output 1.No. of Fostered SMEs 1,131 1,326 1,282 2604 2.No. of Fostered Start-ups 279 333 507 765 3.Capital Increase (NTD, billion) 43 57 52 398 4.Multiple of Output and Input (Capital Increase/Subsidy) 23 27 32 26 5.No. of Employment being Created 11,477 22,648 25,353 59,742 6.No. of Patent Acquired 160 416 400 976 7.No. of Technology Transfer 87 144 205 436 8.No. of Registered Enterprises 10 3 35 Note：1.Statistics Range：Incubation centers subsidized and invested by SMEA, MOEA. 2.The incubating process is limited within 3 years in principle. Statistics number of fostered SMEs and employment are based in newly incubated SMEs in the year. 3.Aim to foster 1,000 SMEs in 2006.

E. Case of Incubation Center (4) Enhancing the Function of Incubation Service(6/6) E. Case of Incubation Center Established in 2000.12.29 Joined in Nan-Kang Biotech Incubation Center in 2004.12 Major Technology of NatureWise： R&D in biotech, selling medicine, Chinese herbal medicine and health food. Achievements： Main product “LipoCol Forte” had earned the first license of the Committee on Chinese Medicine and Pharmacy, Department of Health, Executive Yuan. 2. Won the 2005 Taipei Biotech Award-Technology Commercialization. NatureWise Biotech & Medicals Corporation (Nan-kang Biotech Incubation Center) Before Current Status Capital 112 million 154 million Trade 8 NTD million 26.57NTD million No. of Employees 6 19

(5) Since 1996, Have Set up 98 Incubators Spread over Taiwan (5) Since 1996, Have Set up 98 Incubators Spread over Taiwan. Among Them, Universities Share 78%, Research Institutions Share 9%, Government 9%, Private Sector 4% (6) Have Incubated over 2,000 SMEs, Created Investment Amount NT$28.9billion (US$920million) (7) Successfully Incubated Paradigm Enterprises Include Electronics, Information Technology, 3D Animated, Communication, Bio-tech Industries, etc.

(8) Regional Distribution of Incubators in Taiwan Northern Taiwan 46.3% Central Chinese Taipei 21% Eastern Taiwan 5.4% Southern Taiwan 27.3% Source: Calculated based on data from SMEA

(9) Measures for Enhancing the Function of Incubation Service Expanding service capacities of incubators Building up fine-quality incubating environment Evaluating the performance of incubation services Training the professional managers of incubators Facilitating the cooperation and inter-action of incubators Popularizing the incubation information and Service Guidance and assistance programs for incubators Legislation Compiling the guidelines of operation for incubators Training programs exchanging incubation experiences Fairs Visit tour of incubators NBIA、AABI、APEC Meetings Year Book of incubators Incubation Journals Bi-monthly Publication Evaluation Mechanism of Performance for incubators Strategies Measures

4-2. Financial Support for Start-Ups(1/4) (1)Sources of Financing Incubation Fund Account Invest (15%) SME Investment Companies invest Private Funds invest SME Development Fund SMEs & Start-ups Capital Markets Domestic Banks Loans VC National Development Fund Reward invest Guarantee invest SME Credit Guarantee Fund Government Agencies

4-2. Financial Support for Start-Ups(2/4) (2) Financing Supporting Measures SME Incubation Trust Investment Account SMEs Investment Companies Entrepreneur Loans for Micro-enterprises Strategic Alliance with Venture Capital Various Programs of SMEs Loan SME Credit Guarantee Fund SME Call Center Low-interest R&D Loan Schemes

4-2. Financial Support for Start-Ups(3/4) (3) Government Policy Support on Financing Sum: NTD million Period Item 2006 Financing amount supported by the SMEG credit guarantee Cases 261,824 Sum 530,459 Financing Diagnostic Guidance 210 9,283 R&D Policy Loans 480 1,062.4 Note: USD1=NTD32

4-2. Financial Support for Start-Ups(4/4) (4)Case : Tong-Jou Aluminum-Can Manufactory Co., Ltd. l Established in April 2002. Capitalization: NTD 2,000,000. Employees: 4. Main products: aluminum tube and aluminum can by ODM. 70% of sales are for export. l  2003-The manager acquired the Micro-enterprise Start-up Loans at the age of 62. l  2004-The manager was awarded the first of Micro-enterprise Start-up Loans model award. l 2004-2005:The company acquired the R&D Loan of NTD 6,160,000 with 85% credit guarantee from the Small and Medium Business Credit Guarantee Fund. l With the support of the R&D Loan, the company is developing the machine and container for vaporizing essential oil. l 2004-The company acquired the intellectual property patent. They promoted the products successfully to the international market by cooperating with Innovation Incubation Center at Oriental Institute of Technology. l 2003-2006-The revenue increases each year from NTD 8,000,000, 10,000,000, 14,000,000 to 18,000,000. The capitalization in 2007 is boosted to NTD 5,000,000. The employees also increased to 18.

4-3. Fostering Entrepreneurship (1/4) (1) Knowledge and Information Providing a. Entrepreneur Consultation / Knowledge Center Consulting Channel By Telephone (0800-589-168) By Website Question Categorized Common question Call Center Data Base Individual question On-site consultant Joint consultant Contents of Services Business Plan Financing Assistant Marketing Information Accounting Service Legal Service Potential Entrepreneurs

College of Entrepreneur 4-3. Fostering Entrepreneurship (2/4) b. Entrepreneur Learning Center College of Entrepreneur Objective Trainees (Innovation-oriented personality) New enterprises established within 3 years Plan to start a new enterprises Programs: EMBA Courses Case Study Field Visit Seminar Business Plan Online-learning Programs (http://emba.moeasmea.gov.tw) Application for e-learning E-learning courses of Entrepreneur Competition of Business Plan Nominate to Entrepreneur Lab Transfer to Entrepreneur Consultant Center Superiors Others

4-3. Fostering Entrepreneurship (3/4) c. Entrepreneur Lab Entrepreneur Consulting/ knowledge Center (1) Select 100 entrepreneurs for entry into Entrepreneur Lab (2) Conditions: Must have preparatory capacity and a feasible business plan (1) Select 200 entrepreneurs for entry into Entrepreneur Lab (2) Conditions: the best business plans written in the course of a systematic entrepreneurial course training Entrepreneur Learning Center (1) Through promotional activities, select 200 for entry into Entrepreneur Lab (2) Conditions: Provide a feasible entrepreneurial business plan, which after assessment can begin to receive entrepreneurial guidance Entrepreneur Lab

4-3. Fostering Entrepreneurship (4/4) (2) Case : Wretch Limited Company Authorized Capital: NT 20 million Characteristics WRETCH was founded in 1999 by 6 university students in National Chiao Tung University and registered in March 2005, providing service of immediate photo album on the Internet. It has offered an exclusive Internet photo album to each user for free on campus. In accordance with Google in Stand-ford University, WRETCH run a win-win situation between company’s profit , user’s right and interests. There are 2.8 million members in 2006. Now WRETCH has been merged into YAHOO with USD 21 million in March 2007. Government Guidance and assistance Commend to join and win The 4th Business Start-Up Award

Five Supporting Frameworks 4-4. Women Entrepreneurship Promotion Five Supporting Frameworks Establish Cooperation Network Advisory Committee Consisting of Women Entrepreneurs Supporting Team of Women Volunteers Set up Consultancy Windows e-Commerce Empowerment Bridging the Digital Divide of the SME Project Share Success Experience Business Match Making Platforms Set WE e-Commerce Website Set WE Portal in TWN Trade Web Business Start-up Assistance and Incubation Business Start-up Consulting and Training Business Incubation Center Provide Financing Assistance Young Entrepreneur Loan Micro-enterprise Start-up Loan Business Start-up Phoenix Loan

6. Micro Business Start-Up Loan (1) Purpose Enhance the Entrepreneurship & Assist the Middle-age Unemployed Person to Create New Business in Knowledge Economic Era (2) Loan Source Banks’ Own Capital (3) Eligibility Must be Unemployed, Age 45 to 65 Years Old, Who Have New Business Plan ‧New Start-up Business, or ‧Business Within One Year (4) Loan Size For Each Person NT$1million Is Maximum

(5) Interest Rate 3% Per Year. Fixed Rate (6) Guarantee 80% of Loan Guaranteed by SME Credit Guarantee Fund (7) Purpose of Loan ‧Working Capital ‧Real Estate, Machinery and Equipment (8) Loan Period 6 Years Maximum (9) Other Matching Measures Provided ‧Management & Technical Assistance to Help Ensure Success ‧Awards to Excellent Entrepreneurs ‧Regular Report to Executive Yuan

Entrepreneur capitalized Micro Business Start-Up Loan Unit: number, (%) * Statistics from January 2003 to Jan. 2007 Entrepreneur capitalized Micro Business Start-Up Loan by Sector Unit: number

7. Enhancing SMEs Information Technology SME Knowledge Management Plan Knowledge Analysis & feed back Knowledge Analysis & feed back Knowledge Information Knowledge Information e-SME Cluster Industry-specific SME e-business Plan Industry SME e-Market place Need on Training SME e-enable Service Team SMEs Join the Supply Chain Plan Connection System Need on Training Talent Supply Talent Supply Reduce SME Digital Gap Plan Cultivate SME e-human Resource Plan SME e-learning Plan SME Operation Service E-network Plan SME Need on Entrepreneurship, Financing, Management, e-business, etc.

8. Building Up the SME Service Network Mechanism 23 Local Service Centers Center / Local Associations SME Service Network Mechanism Entrepreneur Volunteers Bank Service Centers Virtual Internet Service www.moeasmea.gov.tw One-Stop Solution Center

VII. Conclusion and Suggestions(1/3) 1. Conclusion Small and medium enterprises are the foundation of Taiwan’s economic development and a mainstay of social stability. Yet, we face a quickly changing economic and trading environment that requires upgrading and transformation. Maintenance of political and social stability, timely implementation of effective policies and vigorous private entrepreneurship stand out as key factors of success in Taiwan experience. Thus, government should have long-term vision and initiate feasible action plans to meet the needs of SMEs. Entrepreneurship has become a global trend and is anticipated to create common value, giving hope for brighter tomorrows.

VII. Conclusion and Suggestions(2/3) 2. Suggestions Consider adopting innovation-oriented development strategy and selecting a group of strategic industries on which government would concentrate its resources to promote their development. Innovation policies should provide channels for start-ups to have access to the supports of financing, R&D, marketing and commercialization, and should promote technological and human skills upgrading. By building up a platform of entrepreneurship and incubation and in doing so spreading seeds which may grow into thriving companies, we can create a knowledge-based entrepreneurial society.

VII. Conclusion and Suggestions(3/3) 2. Suggestions Government should collaborate with civic organizations for promotion of foreign trade, thereby helping companies to access international markets. Keep exchange rate stable to promote saving, and turn saving into productive capital. Provide start-up capital but coupled with self capital and management assistances for newly set-up SMEs to raise successful rate. Create a favorable environment for SMEs without being crowded out resources by large enterprises

Thank you for your attention! For further information http://www.moeasmea.gov.tw