Taiwan's SMEs Regain Confidence and Embrace Global Markets
Taiwan, April 24, 2007 -The UPS Asia Business Monitor 2007 (UPS ABM) revealed that SMEs in Asia are more optimistic on the economic outlook of the region in 2007 compared to last year. In particular, SMEs see the strongest trade growth in intra-Asia followed by the Middle East and Europe. In Taiwan, 18% more SME leaders are optimistic about their business prospects this year compared to 2006. Out of 12 Asian countries, this growth trend was the second most highest.
"The UPS ABM 2007 reveals emerging opportunities in China, India and across Asia which SMEs could capitalize on. These findings are consistent with UPS's strategy of making Asia as our priority market," said Ken Torok, President of UPS Asia Pacific region.
When asked about their company's growth prospects in 2007, SMEs in India were the most confident, with 89% of SME leaders expecting greater economic prospects. Compared to findings from 2005 to 2007, more Taiwanese SMEs anticipate better business prospects in 2007. This finding increased from 57% in 2005 to 61% in 2006, and to 67% this year. As a result of the bullish outlook, the majority of SME leaders surveyed expect to maintain or increase their workforce, especially in India, Singapore, and Indonesia.
The UPS ABM is an annual survey of the competitiveness of SMEs in Asia. According to the findings for this year, SME leaders in Taiwan consider the factors of "innovation" and "access to overseas market" as crucial to business growth. From the 2006 findings, SME leaders considered themselves weak in 12 out of 14 factors important to competitiveness, which pose as a barrier to their development. Compared to the 2006 ABM findings, SMEs in Taiwan now view themselves as competitive and are actively catering to the global marketplace.
UPS 2007 ABM looked into the "Industry Transformation of Taiwan's SMEs" for the very first time. Findings from this study indicate that the most important factors to the transformation of Taiwan's SMEs from small OEM operations to global brands are "product innovation", "proficiency branding and marketing" and "adaptability to market changes." Moreover, top-of-the-mind concerns for Taiwan's SME leaders include "speed, flexibility and adaptability to changes", "quality of product/services," and "customer loyalty."
"For a long time, speed and flexibility were considered Taiwan SMEs' strengths, yet the UPS 2007 ABM showed that these were areas of concern," said Gary Wu, General Manager of UPS Taiwan. "UPS finds the key reason for the pressure Taiwan's SMEs are experiencing is because development has changed from being manufacturing to market oriented. Taiwan SMEs need to apply speed and flexibility to more than just manufacturing, but in responses to market demands, enhancing customer service, and producing customized products. This means that to create a new strength via a multi-function, efficient, and high-visibility supply chain facilitating and accelerating their global developments. UPS will also devote itself as a consultant for Taiwan's SMEs with its expertise in total solutions of goods, funds, and information flows.
As to government strategies on enhancing SMEs' strength, the Director General of Small and Medium Enterprise Administration, Ministry of Economic Affairs, Lai Sun-Quae pointed out, "The government will invert 10 billion NT$ dollars to reinforce Taiwan's SMEs in financial aids, new business opportunities, knowledge entrepreneurship, innovative service, and the shortening of digital gap. In addition, we will focus on promoting the local industries."
Highlights of the UPS ABM 2007 include:
CHINA TO REPLACE THE U.S. AS NUMBER ONE ECONOMY (Pg. 31)
Ninety-two percent of SME leaders across the region rate China as the market with the greatest prospects of economic growth in 2007, with 57% of respondents believing that China will catch up with the U.S. as the world's biggest consumer market within 10 years. However, China's top trading partners - Japan, Korea, Hong Kong and Taiwan, are least optimistic about China's ability to achieve the position. Taiwan regards China to be the largest consumer market in the next 10 years.
INDIA: THE MOVER OF ASIAN TRADE (Pg. 33)
Seventy-three percent of SME leaders across the region believe that India's growth will benefit Asian SMEs. Thirty percent of respondents are optimistic that they can capitalize on India's growth by using it as a manufacturing base, while 25% stated they would outsource their manufacturing processes to India. Thirty-nine percent of Taiwan SME leaders, the highest ratio in Asia, regard India as an outsourcing base.
EXPANDED INTRA-ASIA TRADE (Pg. 6)
SME leaders are positive about increased prospects for intra-Asia trade in 2007, with 74% of respondents stating their anticipation for increased trade between their country and the rest of the region. Eighty percent of Taiwan's SME leaders foresee good trade growth between Taiwan and Intra-Asia, which is an even higher ratio than the average of the 12 Asian countries.
CROSS REGIONAL ALLIANCES KEY TO TRADE OPPORTUNITIES (Pg. 6)
Cross regional trade is also witnessing growth, with the Middle East, in particular, viewed by Singapore (81%) and Malaysia (79%) as the country with greatest prospects for trade growth in 2007. The Middle East is also regarded by 54% of all respondents as the second largest market presenting growth potential in 2007, compared to 43% in 2006. Eighty percent of Taiwan's SME leaders foresee good trade growth between Taiwan and Intra-Asia. In contrast, a lower percent foresee good trade growth between Taiwan and the Middle East, which is an even lower ration than the other Asian countries.
BRIGHTEST JOB PROSPECTS IN ASIA IN YEARS (Pg. 5)
The positive job outlook for 2007 bodes favorably for employees, with over 89% of respondents across all countries expecting to maintain, if not increase, the size of their workforce. The greatest increase is expected in India (79%). Even in mature markets such as Hong Kong and Japan, 34% of respondents anticipate workforce growth. Compared with the research results of 2006, 5% more of Taiwan's SMEs expect to increase their workforce this year.
UPS, which celebrates its 100th anniversary in 2007, is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at www.ups.com.
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