Despite worldwide recognition of Taiwan's excellence in manufacturing, no Taiwanese brands are listed on global branding consultancy Interbrand Inc.'s list of the world's Top 100 brands.
For a decade, Taiwan's manufacturers have struggled with the need to move up the manufacturing value chain by improving research and development and establishing recognizable brands.
In early 2006, Taiwan's Ministry of Economic Affairs began coordinating a program to raise brand awareness nationwide and assist companies in branding strategy and promotion.
The goal of the program is to have two native Taiwan brands in Interbrand's Top 100 list by 2011, and have five brands with a value of at least US$1 billion. Taiwan's most recognizable brand, Acer, has a brand value of about US$800 million according to Interbrand.
In a recent briefing paper, the government outlined eight major initiatives:
* Establish a venture capital firm to invest in branding initiatives.
* Improve the legal and regulatory framework for brands.
* Establish a brand valuation system.
* Establish personnel education and training.
* Publicize Taiwan specialty products and brands.
* Raise the entire population's awareness of branding.
* Establish a branding communications portal.
* Improve opportunities for branding consulting and assistance for Taiwanese companies.
Plastics News spoke with Jeremy Y. Shen, director of trade development for the Bureau of Foreign Trade under the Ministry of Economic Affairs, about the branding program.
Q: Why did the government start this branding initiative?
Shen: Manufacturing moved to other countries, especially mainland China. In the past we made a lot of effort in R&D, and now we found that R&D is not enough, so now we are making efforts on branding channels, or helping our businessmen if they want to put efforts [on branding].
Q: What can the government do for small and medium enterprises?
Shen: That's the purpose for setting up a VC fund. Funds composed of government and private-sector money. We hope the private sector will take [a bigger] part. Right now, the fund includes 51 percent private funds and 49 percent government funds, and has T$2 billion (US$62.4 million). Acer Group's Stanley Shih took part in organizing the private-sector part. He retired from Acer and started an asset management company. He put in T$200 million (US$6.2 million), about 10 percent of the total, of his own money.
Q: What's the health of the manufacturing industry like now?
Shen: Judging from trade volumes these days, we are not booming compared to our past record. We are still growing. In 2005, our trade volume equaled 8.5 percent of our gross national product, but in 2004 it was over 21 percent - so not as high as we expected, but on the world average it's high. We are a very trade- dependent economy, so it's difficult for us if we grow less than world trade.
Q: What are the best industries for Taiwan to develop brands in?
Shen: It has to be something that is unique to the country. Tea and orchids came up as possibilities. We have some candidate industries, but not one particular industry we are pushing. We want the market or company to decide.
Q: Do companies see the benefit of brand awareness?
Shen: A lot of companies develop their brand through technology, so they do more promotion. Some companies have not recognized that their product should be branded to give it a higher value.
We're trying to offer some incentives to business circles to recognize branding themselves as a way to move forward. It's a philosophy and an open debate.