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Taiwan technology outlook series: Firms growing their reputation and market share
15 October 2015
Technology in Taiwan is advancing exponentially with new products launched by the minute and industry developments that are hard to keep up with. This article will be the first in our Taiwan Technology Outlook Series that looks at opportunities for growth in the sector and delves into insights and trends in varying technology disciplines.
Competition from regional counterparts has never made the pressure on Taiwan’s technology industry keener. Taiwanese technology companies face stiff competition from Mainland Chinese brands like Lenovo, Huawei and ZTE due to their home market advantage and positive reputation overseas, due, in part, to innovative marketing strategies and improving retail distribution channels.
South Korea appears to be another force of contention as it emerges triumphant in the technology consumer goods stakes, with huge demand for its tablets and smartphones. Taiwanese companies will need to continue innovating, be relevant in their offerings and manage their cost base effectively so as not to be eclipsed by their rivals.
An attractive environment
Taiwan possesses a host of characteristics that encourage its IT environment to thrive. This includes having a range of agile and flexible companies, well integrated infrastructure and a conducive industrial environment, suitable for IT development. For foreign companies, they will consider the cost benefits and subsidies available if they were to set up a new base or relocate to Taiwan and if there is enough talent and a skill base that is specialist enough for them to move.
Taiwan’s differentiating factors
Much evidence points to innovation and the development of industrial clusters being the differentiating factors determining the future success of the island-state’s technology export-dependent economy.
Mobile internet (such as applications and games) and internet advertising are growing rapidly as Taiwan continues to extend support for innovation to push further its fast-moving technology space. Innovation is instrumental in helping Taiwan to be at the leading edge of IT development and commercialisation. The country looks to develop its telecommunications by pushing for advanced 4G technologies and constructing wireless, smart grid and other green technologies.
Having a larger scale and broader footprint do not necessarily mean bigger is always better. Close physical proximity is another advantage as industrial clusters are created to facilitate and execute procurement, design support and the rapid commercialisation of product ideas.
Positioning Taiwan in the global market
Taiwanese technology players will have to continue building strong linkages between local and global firms for major business opportunities and improve the way they position and market their products and services in lieu of global competition and a demand for stronger global recognition.
Technology opportunities are equally as attractive and varied for multinationals (MNCs) and start-up firms in Taiwan. Levels of working proficiency and having an IT system that is compatible with a company’s requirements are important for both MNCs and start-up technology firms. More US-based companies too have set up their research and development (R&D) base in Taiwan, as the pool of talent is of good quality and wages are competitively low; at times lower than those of top-tier cities in Mainland China.
Growth areas in Taiwan’s diverse technology space
For growth opportunities ahead, software talent in Taiwan is highly sought after. Software development skills especially for mobile applications, machine learning and data mining are areas most desired by organisations looking to expand. Hardware industries are more established and recognised but software solutions are thriving and expanding due to an increase in consumer appetite.
Taking the example of Apple, they are conventionally associated with the hardware they produce. Software, however, in this case its content, is what differentiates and defines Apple, be it music from iTunes or streamed television.
Industry experts encourage Taiwan to capitalise on the joint merits of the hardware and software businesses to create functional, integrated solutions that complement advanced technology products.
Semiconductors make up another viable industry with keen interest from large corporations to hire candidates with a sound technical background. Vendors, solution providers and equipment providers together make up for a sophisticated ecosystem in the semiconductor space.
Corporate IT and semiconductors are well established areas in the technology industry with well placed processes and stable growth as compared with mobile applications and firmware/hardware sectors, where growth is rapid but disruptive and supported by new innovations.
Firmware is geared towards more technically-focused candidates who have well grounded skills such as high-level programming and a good knowledge of application. IT talent in Taiwan with competitive skills and impressive experience may be unable to find roles that fit their calibre as there are more substantial IT opportunities available in cities such as Singapore and Hong Kong.
For technology sales, companies are looking for individuals with business sensitivity and solid technical decisions to make intelligent decisions and be an adequate consultant to manage a project. These candidates should be able to not merely execute orders but implement efficient business intelligence reports effectively.
E-commerce is another emerging technology area in Taiwan and savvy retailers are enthusiastic about localisation to create new opportunities. Technology companies in Taiwan should work together to jointly create an environment conducive to cross-sector competition.
This environment encourages businesses to utilise their own strengths and develop versatile and innovative e-commerce services.
Developing strategies for success
Technology businesses must understand how they evolve and keep pace with the competition and determine where best to plug in their efforts. This would involve them maintaining their knack for investing in talent with the right quality and volume of skills, developing a fluid and customisable manufacturing space and strengthening connectivity within its IT infrastructure.
To stay afloat amid displaced technologies and rival its neighbours, the Taiwanese technology industry will have to be cautious with allocating its resources. It will have to develop beneficial innovations for increased patent activity and R&D output, introduce scalable systems that maintain cost and identify high-performing talent that can lead value creation.
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