Entrepreneurial spirit drives Taiwan

By Ralph Jennings

TAIPEI (Reuters) - Computer salesman Ke Teh-an quit his job with a major Taiwan computer manufacturer to open an American-style diner that he hopes will make him rich.

Such stories are not unusual in Taiwan, which has one of the largest pools of entrepreneurs in the region.

Becoming an entrepreneur is a way of life in Taiwan where go-it-alone businessmen are driven by a desire to become their own boss as well as to make their fortune.

"It's tough, that's for sure, but it's a dream," Ke said as he worked in his Taipei diner which employs four people and serves an average of 250 customers per day.

"It's a mess out there. Everyone wants to be his own boss," remarked Ke, who has added a second diner to his burgeoning chain and is already saving up for his third outlet.

Running a business is so popular in Taiwan that more people are employed in small businesses than in Thailand, which has almost three times the population.

"It's a cultural thing," said Cheng Cheng-mount, an economist with Citigroup in Taipei. "Among ethnic Chinese, you don't want to be the employee. You want to be the employer."

The entrepreneurial streak in Taiwan dates back to as early as the 1940s, when many of the Chinese businessmen and refugees fleeing the Communists on the China mainland opened shops on the island as there was no major industrial base to provide jobs.

Easily available business permits and government micro-loans keep the entrepreneurial spirit alive today, while poor working conditions and a do-it-yourself spirit also contribute to the desire of many in Taiwan to open their own business.

About 70 percent of Taiwan companies are listed by the government as "small-to-mid-sized," which means they have fewer than 200 employees. Taiwan's 1.24 million small-to-medium-sized firms employed around 7.8 million of the island's 23 million people in 2006 and contributed about 30 percent of the income generated in Taiwan.

The large number of small businesses in Taiwan has helped cultivate a versatile economy that has been more resilient than it might have been in the face of poor economic performance over the past few years characterized by inflation, wage stagnation and employment barricades, economists say.

"It's basically a good thing, because if a business is more nimble, it can pounce on any opportunity that comes its way," said Vishnu Varathan, a regional economist with Forecast Ltd. in Singapore.

"They (small businesses) tend to have a bit more ability to react faster than big companies," he said, adding that Taiwan's wealth of small businesses help "squeeze more out of the economy".

FINDING A NICHE

As entrepreneurs scramble to find a niche, Taiwan residents benefit from a wide range of choices and inventive ideas. Seaweed cakes from Taiwan's north coast, party balloons shaped as giant animals and miniature paper houses for burning at traditional Taiwan funerals are among the one-of-a-kind products that have spawned small, successful Taiwan businesses.