Taiwan Wants to Bring Your Creative Startup to Life This YearAdela Lin and Debra Mao
Taiwan will start facilitating crowdfunding for entrepreneurs trying to start companies in the same way that Kickstarter helps product inventors, Taiwan’s economic planning minister said.
“Startups are the fruits of innovation,” National Development Council Minister Duh Tyzz-jiun said in an interview in Taipei on Wednesday. “They benefit our economy and generate employment opportunities.”
The island is seeking to attract innovative projects and people from around the world as part of an effort to revive industries, including textiles and technology, battered by lower-cost production in China. Taiwan’s companies must innovate and invest in research and development in order to compete, said Duh, who was appointed in January.
The online platforms, which will allow the public to buy stakes in small firms, will be operated by local brokerages and regulated by the Financial Supervisory Commission. The FSC said in a webcast late Wednesday that only companies with NT$30 million ($954,000) or less will be allowed to sign up. The program is scheduled to start by May, Duh said.
Crowdfunding, which allows companies and people to raise money via online pitches, is a small, growing alternative to traditional finance. Kickstarter is a New York-based website started in 2009 where individuals can ask the public for funding for their creative projects. To date, $1.6 billion has been pledged toward 79,000 projects, according to its website.
The Taiwan government and venture capital funds plan to jointly raise more than NT$22.2 billion toward investing in Taiwan and Silicon Valley startups, according to a National Development Council statement this week. These new companies can work with and help drive innovation in Taiwan’s existing industries, such as technology hardware, Duh said.
“We cannot compete with China on volume or mass production,” Duh said, adding that corporate profits should instead come from intangible resources such as research and development. “We want to move the investment upstream.”
Communist-led China and democratically governed Taiwan have been ruled separately since 1949, and China still claims the island as its territory. Economic ties across the Taiwan Strait have deepened under Taiwan President Ma Ying-jeou, who took office in 2008. Duh said that while China’s large market is attractive to entrepreneurs, he wouldn’t recommend it for young innovators.
“Startups are high risk in the beginning, and you are better off in a transparent environment,” Duh said. “A lot of things aren’t transparent in China, including their laws.”
Alibaba Group Holding Ltd. Chairman Jack Ma announced this week a NT$10 billion fund to aid Taiwanese entrepreneurship, even after the company was asked sell or close its local operations by August for failing to apply for permission to set up in Taiwan as a Chinese company. Ma said March 3 his company complied with local regulations when it entered Taiwan.
“Any funding that complies with our rules is of course welcome here,” Duh said yesterday. “But Taiwan also supports entrepreneurship.”