Proceedings of 3rd Global Business and Finance Research Conference
9 - 10 October 2014, Howard Civil Service International House, Taipei, Taiwan ISBN: 978-1-922069-61-0
Innovative Foreign SME Operations in Taiwan and China
Stuart Orr
Representatives of Australian SMEs operating in China and Taiwan were
interviewed in 2013 to answer the research question, "how does the role of
innovation differ in its contribution to the success of Australian SMEs in China
and Taiwan". The project examined the relationship between innovation and
success and between innovation and other factors which influence business
success in these markets, such as networks. The interview protocol was
developed using variables identified in the Australian Government White Paper
"Australia in the Asian Century" and an interview protocol previously developed
by the researchers for examining the operations of Australian companies
operating in China.
Product and service innovations were found to provide less benefit in China, than
Australia, for both retail and commercial customers. Small levels of innovation
provided a competitive advantage, however, large levels created a disadvantage;
customers were generally risk adverse and not attracted to highly innovative
products.
Success for innovative Australian SME’s in China required the innovation to be
kept in the Australian operations, incorporated into the product or service so that
it wasn't apparent, or an alternative innovation developed for the Chinese market.
By contrast, Australian SME’s gained competitive advantage in Taiwan from all
their innovations. Most participants focused their Taiwanese operations on global
markets, however, as Taiwan's local markets were relatively small.
Barriers to implementing innovations in China included workforce skill levels,
losing staff once they had been trained and difficulty in protecting IP. Universities
and suppliers provided good support for adopting innovation in Taiwan. The
Taiwanese workforce were found to be skilled, engaged easily with innovation
and loyal to employers. IP was not difficult to protect. This allowed the transfer of
more business practices from Australia to the Taiwanese operations than to
Chinese operations.
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Prof. Stuart Orr, Deakin Graduate School of Business, Deakin University, Victoria, Australia.