With Lai Ching-te’s inauguration as Taiwan’s president in May, the Democratic Progressive Party has now entered an unprecedented three-term rule. His victory highlights the voters’ preference for maintaining the status quo amidst the ongoing presence of China. Lai emphasized the importance of peace in the Taiwan Strait for global peace and stability.
Amidst this stability, Taiwan has the opportunity to focus on enhancing its economic competitiveness, particularly in sectors like its burgeoning startup ecosystem which currently operates in the shadow of the country’s renowned semiconductor industry.
The startup sector in Taiwan has shown growth in recent years, yet it grapples with challenges such as limited funding in later stages and regulatory hurdles that impede foreign investment. There is optimism among entrepreneurs that Lai’s administration will address these challenges by easing funding regulations, providing long-term support for industries like deep-tech, and fostering new sectors to generate employment opportunities.
Horace Luke, CEO of Gogoro and a prominent figure in Taiwan’s startup landscape, shares a positive outlook on Lai’s proactive stance towards supporting the startup ecosystem.
Funding Environment
In one of his campaign promises, Lai pledged to invest significant funds into Taiwan’s startups, yet the distribution and execution of these funds remain key concerns among observers. Drawing parallels with successful startup ecosystems in South Korea and Japan, there is a call for comprehensive government support to fuel Taiwan’s startup growth.
Various initiatives like the National Development Fund’s matching program and investments in mature startups have been launched to support the startup ecosystem. However, challenges persist in securing private equity investments, particularly from international sources, due to prolonged review processes and lack of transparency.
Taiwan’s startups face hurdles in accessing funding in growth stages, with a significant gap in capital availability beyond angel and seed rounds. Initiatives like the Taiwan Innovation Board aim to facilitate public listings for startups, offering an alternative exit strategy beyond traditional routes.
Going Global
As Taiwan’s startup market seeks global expansion, hurdles in government policies, tax regulations, and market entry requirements pose challenges for startups aiming to scale internationally. Initiatives like the New Southbound Policy aim to facilitate expansion into new markets, yet more governmental support is needed to navigate the complexities of global business environments.
Embracing long-term growth, job creation, and industry specialization are crucial components of Taiwan’s startup ecosystem development. Ensuring quality job creation, supporting deep tech innovation, and aligning resources towards strategic sectors can propel Taiwan’s startup industry to sustainable success in the global market.
