Meeting, Incentive, Convention, and Exhibition (MICE) Industry: Analysis & Investment Opportunities Department of Investment Services, Ministry of Economic Affairs Table of Contents I. Global Trends in MICE Industry Development .................... 1 (I) A 21st Century Goldmine................................................................ 1 (II) The Asian MICE Industry Boom ................................................... 2 II. The Status of MICE Industry Development in Taiwan ........ 5 (I) Supply & Demand .......................................................................... 5 (II) An Analysis of Existing Gaps in the Industry Supply Chain, Investment Niches, and Prospective Foreign Investors ................ 7 (III) Major Suppliers in Taiwan ......................................................... 11 III. Optimum Investment Items for Foreign Investors ............. 12 (I) Investment Advantages ................................................................ 12 (II) Investment Niches and Suitable Investment Categories .............. 17 IV. Successful Examples of Cross-Border Strategic Alliances and Foreign Investment in Taiwan ................................................ 19 (I) Uniplan (Germany) ...................................................................... 19 (II) Messe Frankfurt (H.K.) Ltd. Taiwan ............................................ 19 V. Industrial Investment Incentives ............................................ 21 VI. Industry-Academia Collaboration in Taiwan .......................... 25 I. Global Trends in MICE Industry Development The meeting, incentive, convention, and exhibition (MICE) industry—a service industry combining trade, transportation, finance, and travel—has been active in Europe and America for over a century. The MICE industry is characterized by the “Three Highs—high growth potential, high added-values, and highly beneficial innovations”; the “Three Larges—large output, large opportunities for employment, and large industry associations”; and the “Three Advantages—advantage over other industries in human resources, technological know-how, and the efficient utilization of assets.” Today, countries all over the world are putting their best foot forward to develop the MICE industry as a means to enliven national economic development. (I) A 21st Century Goldmine 1. The MICE Industry is Booming International Congress & Convention Association (ICCA) statistics show, that a total of 400,000 conferences and exhibitions are held worldwide every year at the total outlay of US$280 billion. The Global Association of the Exhibition Industry (UFI) points out that as annual MICE industry output value has already reached US$1.16 trillion (including US$400 billion for conferences and US$760 billion for exhibitions), MICE could be counted on to bring enormous economic benefit to the countries and cities that host them. 2. Continuous Expansion of MICE Industry Venues Worldwide In its October 2007 report—“World Map of Exhibition Venues”—UFI notes that in 2006, there were a total of 1,062 exhibition halls around the world with indoor exhibition space exceeding 5,000m2, meaning that there is approximately 27.6 million m2 in total indoor space primarily located in Europe, North America, and Asia. More specifically, exhibition halls in the U.S., Germany, China, Italy, and France assume 58% of the worldwide capacity. Total construction costs for 2007-2010 is estimated at a minimum of US$18.7 trillion for building and expansion. By 2010, the world will have a total of 1,104 exhibition halls with over 5,000 m2 in indoor exhibition space, 1 providing a combined total of approximately 31.1 million m2 in indoor exhibition space. Available Floor Space in Indoor Exhibition Halls Worldwide (2006~2010) Regions Exhibition Space No. of Exhibition Halls 2006 2010 (F) (Million m2) Growth 2006 2010(F) Growth North America 359 370 3% 7.1 7.7 8% Europe 465 477 3% 14.3 16.2 13% Asia 127 143 13% 3.9 4.6 20% Oceania 16 17 6% 0.3 0.3 6% Middle East 32 33 3% 0.6 0.9 38% Africa 25 24 -4% 0.5 0.6 7% Latin America 38 40 5% 0.9 0.9 4% Source: UFI; compiled for the present study, 2008/2 (II) The Pan-Asian MICE Industry Boom As nations around the world are optimistic about MICE industry development, exhibition space will continue to grow in the years ahead. This is particularly evident in Asia, where exhibition space is expected to grow to 4.6 million m2 by 2010—a 20% increase on 2006. UFI points out in its June 2007 report—“The Trade Fair Industry in Asia - 3rd Edition” —that, spurred by the momentum of production relocation to Asia from the rest of the world, the Asian MICE industry made over US$2.4 billion in revenues in 2006. There was a 7.6% growth in the quantity of exhibitions and a 17.4% growth in available floor space. China, Hong Kong, India, Taiwan, and Thailand demonstrated the most remarkable growth in both respects. Analysis of International Exhibitions Held in Asia 2 Anticipated No. of Exhibitions Held Total Floor Space Leased (㎡) Revenues (US$ Million) Country Year-on2006 2005 Year-on- year 2006 2005 Difference year 2006 % Difference China 587 564 4.1% 5,089,000 4,065,000 25.2% 759.8 31.5% Japan 475 473 0.4% 2,174,000 2,273,000 -4.4% 648.1 26.9% India 158 128 23.4% 526,000 462,000 13.9% 128.4 5.3% South Korea 140 139 0.7% 528,000 522,000 1.1% 131.8 5.5% Hong Kong 82 56 46.4% 776,000 501,000 54.9% 323.4 13.4% Thailand 69 57 21.1% 381,000 274,000 39.1% 110.7 4.6% Taiwan 60 58 3.4% 410,000 329,000 24.6% 85.9 3.6% Singapore 59 52 13.5% 202,000 175,000 15.4% 64.0 2.7% The Philippines 59 62 -4.8% 114,000 125,000 -8.8% 18.6 0.8% Malaysia 57 52 9.6% 246,000 166,000 48.2% 70.9 2.9% Vietnam 56 41 36.6% 109,000 62,000 75.8% 28.3 1.2% Indonesia 54 56 -3.6% 170,000 192,000 -11.5% 25.5 1.1% Pakistan 32 17 88.2% 62,000 41,000 51.2% 17.3 0.7% 1,888 1,755 17.4% 2,412.7 100% Total 7.6% 10,787,000 9,187,000 Source: UFI, Business Strategies Group; compiled for the present study, 2008/2 In terms of international conventions, ICCA statistics show that there were a total of 5,838 international conventions held in 2006, 555 more than in 2005; Asian countries are responsible for 17.4% of that total, notably Singapore and Seoul, which ranked 3rd and 7th in the world in terms of the number of conventions held in 2006. There have been 1,000 international conventions held in Asia each year since 2004. While this is still a far cry from the 3,000 conventions annually held in Europe—the world’s largest MICE industry market—Asia did outperform North America in this past decade, and a trend seems to be emerging, whereby MICE industry activity is shifting from Europe and America into Asia. 3 International Meeting Rankings by City (2006) Ranking City No. of Meetings 1 Vienna 147 2 Paris 130 3 Singapore 127 4 Barcelona 103 5 Berlin 91 6 Budapest 86 7 Seoul 85 8 Prague 82 9 Copenhagen 69 10 Lisbon 69 Source: ICCA, 2007/6 4 II. The Status of MICE Industry Development in Taiwan (Ⅰ) Supply & Demand MICE industry development is an important index for evaluating regional prosperity and level of internationalization. As an emerging globalized service industry, MICE is especially valued by national governments for its three highs—high growth potential, high added-value, and highly beneficial innovations; three larges—large output, large opportunities for employment, and large industry associations; and three advantages—the advantage over other industries in human resources, technological know-how, and the efficient utilization of assets. Many cities are even utilizing the MICE industry as a development strategy for the new era. Taiwan’s MICE industry has been around for only a quarter century, and is a much younger industry than its more mature counterparts in Hong Kong, Japan, and Singapore, though not without its own competitive edge. There is no disputing the fact that the MICE industry in Asia is currently experiencing a period of great expansion and growth, and regional competition has only just begun. MICE employs an industry model based on service, emphasizing resource integration, with the objective of developing satellite industries around its main focus—that of meetings and exhibitions. Every US$1 spent on this industry will lead to US$7-10 of peripheral economic benefits. That is why the Taiwanese government has designated the MICE industry as an important service industry for development, and estimate that industry output value will reach US$ 100 million in 2008. In addition, Taiwan is striving to host more international exhibitions, pledging to double the amount of international exhibitions held on the island in 2008 and a 10% increase in international visitors. The government designated 2008 as an “exhibiting activity year,” as the opening of the Taipei World Trade Center Nangang International Exhibition Hall (TWTC Nangang) in 2008 effectively increases the international competitiveness of the local industry. The industry will see further resource integration during 2008, culminating in 2009’s “exhibition expansion year,” when the developmental focus will be on the expansion of industry depth and scope. 5 According to the UFI industry report, the Taiwan External Trade Development Council (TAITRA) is among the top 10 convention organizations in Asia, just behind the China Foreign Trade Guangzhou Exhibition Corporation, Singapore International Convention & Exhibition Centre, and Hong Kong Trade Development Council. In 2006, Taiwan ranked 9th in the region for the number of international conventions held (47), while Taipei ranked 8th among all Asian cities with 29 international conventions held. ICCA statistics further indicate that in 2006, international conventions in Taiwan were joined by a total of 33,589 participants, which is a 46.7% increase on the 22,902 participants in 2005. Statistical data disclosed by Taiwan’s Tourism Bureau (TBROC) indicates that of the 3,716,063 total visitors to Taiwan, 57,800 came for the purpose of attending meetings and conventions. In the area of international exhibitions, UFI’s June 2007 data shows that Taiwan ranked 7th in Asia for sponsoring a total of 60 international exhibitions in 2006. Taiwan also ranked 6th in Asia for the total area leased for exhibitions, which came to 410,000m2, or a 24.6% increase on 2005. With all these advantages in mind, it is imperative that Taiwan do more to develop unique local MICE industry features to increase overall global competitiveness for all domestic industries. As of the end of 2007, there were a total of six exhibition halls in Taiwan for regular exhibitions, providing a total of 58,254m2 in available floor space. The TWTC database also reveals that nearly 100 international exhititions are held annually at the TWTC exhibition halls in Taipei, its 310-day annual occupancy rate virtually unsurpassed. In fact, TWTC exhibition halls are very often overbooked. Opened in March 2008, TWTC Nangang is expected to alleviate this space problem. The Taiwanese government has invested heavily in the MICE industry. A total US$680 million was invested into the construction of large-scale exhibition halls including the TWTC Nangang, TWTC Nangang expansion, and Kaohsiung Exhibition & Convention Center. Upon the completion of these projects, Taiwan will advance from 7th to 5th-place in Asia in terms of the amount of available exhibition floor space, and from 36th to 32nd in the world in terms of the number of international conventions held. 6 Exhibition Halls in Taiwan by 2012 (by Floor Space and Booths) Regions Service Since: Exhibition Halls Available Floor Space (m2) Northern Taipei World Trade Center (TWTC) 1986 Taiwan Exhibition Hall 1 Taipei Show Hall 2 (formerly TWTC 1999 Exhibition Hall 2) TWTC Exhibition Hall 3 2003 TWTC Nangang Exhibition Hall 2008 TWTC Nangang Exhibition Hall 2 2013 (F) Taipei County Exhibiton Hall 1999 Central Taichung World Trade Center 2000 Taiwan Taichung International Conference & 2008 (F) Exhibition Center Southern Kaohsiung Business Exhibition Center 2000 Taiwan Kaohsiung Exhibition & Convention 2011 (F) Center Source: Exhibition hall websites; compiled for the present study, 2008/2 No. of Booths 28,239 1,554 5,543 331 7,481 4,536 47,255 4,235 4,851 365 2,465 2,650 238 250 4,300 500~1,000 7,716 422 N/A 1,500 (II) An Analysis of Existing Gaps in the Industry Supply Chain, Investment Niches, and Prospective Foreign Investors The MICE industry incorporates a wide range of expertise that can be roughly divided into three categories, including exhibition facilities, organizers, and peripheral subcontractors. Putting an international exhibition together requires professionals from a variety of fields, and those professionals are lead by Professional Convention Organizers (PCO) and Professional Exhibition Organizers (PEO). The MICE industry incorporates a wide range of services. Required hardware includes onsite audiovisual equipment accomodating Internet connections, overhead projection, exhibition design and decoration, stage design, audio construction, light efficiency, and simulataneous interpretation. Non-facility-related services include exhibition arrangement, public relations, marketing, planning, advertising media, graphic design, tourism, insurance, and transportation. MICE Industry Supply Chains in Taiwan Convention Venues Exhibition Venues Taipei International Taipei World Trade Center (TWTC) Exhibition Halls 1 & 3, Exhibition Convention Center (TICC), Taipei Show Hall 2, TWTC Nangang Exhibition Hall, Taipei Halls Civil Service Development County Exhibiton Hall, Institute, National Taiwan Taichung World Trade Center, Kaohsiung Business Exhibition Center 7 University Hospita l (NTUH) International Convention Center, GIS Convention Center, National Taiwan Science Education Center Professional Convention Professional Exhibition Organizers (PEO) Organizers (PCO) Elite, GIS, K&A, API, International International WILLY, Intercon , IECMC , Professional Exhibition Round Table, We Plan, Exhibitions Agents Achieving Professional TAITRA, Taiwan ACE Forum, Conference Organizer, TCM Foreign Domestic-sale Organizers Exhibitions CMP Asia, Top Link, Textile Chieh Feng, Messe KJE, KTS, Federation, WES Expo Frankfurt, Chia Yi Exhibition TEEMA, Taipei Co., KAIGO, SEMI International, Organizers Computer Golden Seal Economic Association, Daily News, TPCA, Taiepi United Daily Book Fair New, ttnet.net, Foundation, Trans Electric PIDA, Chan Co. Chao Exhibition Hall, New Era International Inc. Notable Public Relations, Decoration, Utilities, and Transportation Firms; Travel Agencies Peripheral- Foreign Firms Local Firms Industry Uniplan, Olily Exhibition The Gleaner Inc., Hsing Li An, Sun Pro Int’l Travel Service, Firms Design, Sta Translation China Economic News Service, SSXC International Audio-Visual Co., Congress Rental, etc. Source: Compiled for the present study, 2008/2 The Taiwanese MICE industry has the advantage of having a number of venues that can accommodate events hosting under 500 participants, including the Taipei International Convention Center (TICC), GIS Convention Center, TWTC exhibition halls, and Kaohsiung Business Exhibition Center. In contrast, the gap in the industrial supply chain is limited space for exhibitions, a problem that the opening of the TWTC Nangang will help to remedy. The low floor space concentration remains an issue. Compared with other Asian countries, which have 80,000-100,000m2 of concentrated 8 available floor space, the local industry is lacking (TWTC exhibition halls have approx. 26,000m2, and TWTC Nangang has approx. 45,000m2). Secondly, of the nearly 100 professional and consumer exhibitions held at the TWTC each year, 20 international shows are hosted by TAITRA—this inability of local PEOs to put on international exhibitions is another weak point in the industry. The third gap is in international competitiveness. While other countries invest heavily to attract buyers to their domestic markets, Taiwanese companies are spurred by the lack of exhibition space on the island to participate in foreign exhibitions, as the scale of domestic exhibtions is limited. Fourthly, development is unequal between the northern and southern parts of the island. Exhibiters like to join exhibitions in Taipei because there is a lack of proper exhibition space down south. As exhibitions in Taiwan begin to transform into a service-lead industry, the market stands to profit from know-how from European and American exhibition companies, as well as collaboration with government and associations for the immediate development of new shows. As there are very few foreign compaies involved in the local market, there is still a room for peripheral industries such as the public relations, interpretation, decoration, utilities, transportation, and travel agency industries to flourish alongside. As for complimentary facilities, there is currently an insufficient number of hotel rooms and venues that can accommodate international meetings of over 500. The tourism and MICE industries can reap mutual benefits from the establishment of international convention centers and hotels in scenic locations. In order to promote MICE industry competitiveness and trade collaborations between Taiwan and Korea, KINTEX chairman Mr. In-Shik Kim signed a cooperation agreement with TAITRA in March 2008. KINTEX is the biggest exhibition center in Korea and a joint public and private venture. Opened in April 2005, KINTEX resolved the lack of exhibition space in Seoul, and greatly enhanced the Korean MICE industry’s level of internationalization. Taiwan can learn from the experience of others to develop its own domestic MICE industry. 9 In addition, foreign firms CMP Asia, Messe Frankfurt, and SEMI have set up offices in Taiwan to recruit exhibitors for international exhibitions. Potential industry suppliers include Uniplan and Olily of Germany, and well as STAR translation. Uniplan has an outstanding international reputation and 40-years of experience in display design and construction. Olily is expert at combining innovative construction and materials with exhibition design to create a practical aesthetic. 10 (III) Major Suppliers in Taiwan The MOEA wants to expand the domestic exhibition market and promote the international status of the local MICE industry through the integration of private investments and government resources. They also wish to establish local exhibition and convention companies that can compete with existing international firms. Many internationally-renowned exhibition firms have subsidiaries in Taiwan. Taiwanese exhibitors have always attended overseas exhibitions in the past, but we now hope that said subsidiaries will not only invite their vendors or buyers to visit the island, but also benefit the local economy by increasing employment opportunities. Taiwanese PEOs can currently be divided into three categories—exhibition companies, associations, and government. TAITRA, TEMA, Chan Chao Exhibition Hall, and New Era International Inc. are all local firms in charge of professional international exhibitions. ACE Forum, Wes Expo Co., and Kaigo are international exhibition agents. United Daily News and Trans Electric Co. are responsible for domestic-sales exhibitions. In Taiwan, the first and largest private professional exhibition company is Chan Chao Exhibition. It not only holds foreign and domestic international exhibitions and conventions, but also publishes an industry magazine. In addition, they are responsible for promoting world-renowned exhibitions and building digital exhibitions via the Internet. The next largest, TAITRA, is an organization under the MOEA that promotes Taiwanese MICE industry growth by holding 20-plus international exhibitions annually. 11 III. Optimum Investment Items for Foreign Investors (I) 1. Investment Advantages Key Government Support In the area of marketing for international exhibition hosting rights, the government has spared no effort in upgrading high-potential exhibition halls. In addition, the government offers generous subsidies to international exhibition organizers who sponsor exhibitions in Taiwan. During the 2005-2007 period alone, the government dealt out approximately US$2.6 million in subsidies to as many as 250 foreign exhibition organizers. To date, the government has successfully won hosting rights for many significant events, including the World Games, Deaflympic Games, WASBE, and IDA Taipei Congress, to be held in Taiwan. Large-scale International Conventions and Events to be held in Taiwan (2009-2012) Duration Activity titles City 2009.07.16-.26 World Games Kaohsiung City 2009.09.05-15 Deaflympic Games Taipei City 2009 The 3rd IWA-ASPIRE Conference & Exhibition Taipei City 2010 Asia Pacific Orthopaedic Association (APOA), XVI Congress Taipei City 2010.11.06- Taipei Internationl Gardening and Horticulture Exposition Taipei City 2011 World Band Music Convention (WASBE) Chiayi City 2011 Taiwan Crafts Expo Undetermined 2011 IDA Taipei Congress Taipei City 2011 The Asia and Oceania Federation of Obstetrics and Taipei City 2011.04.25 Gynaecology (AOFOG), XXII Congress 2011 Global Circuit Board Association Convention 2012 Federation of the International Societies for Pediatric Taipei City Gastroenterology, Hepatology and Nutrition (FISPGHAN), IV World Congress Source: Compiled for the present study, 2008/2 12 Taipei City 2. Expert Taipei Exhibitions Featuring International Competitive Rdge Thanks to elaborate efforts on the part of TAITRA—a long-time sponsor of international professional exhibitions, Taiwan currently hosts 10 globally competitive exhibitions, including Computex Taipei, the Taipei International Cycle Show, and Taipei Int'l Auto/Motorcycle Parts & Accessories Show—ranked top three in the world in their categories; the Taipei International Electronics Autumn Show, Taipei International Machine Tool Show, and Taipei Int'l Plastics & Rubber Industry Show—all ranked top three in Asia. These MICE industry events translate into tremendous economic benefit for peripheral industries. Take the world-renowned Computex Taipei for instance. Since its inception, Computex Taipei has expanded by leaps and bounds. Held at the TWTC Nangang this year, it hosted 1,500 industry heavyweights and lured over 35,000 expert international buyers and many purchase orders to the island, greatly benefiting the local ICT industry. Ten Competitive Professional International Exhibitions in Taipei International 2007 Exhibition Computex Taipei Taipei International Machine Tool Show (TIMTOS) Ranking No. of No. of Foreign No. of Local Booths Buyers Visitors Global Asia 2,926 33,027 96,624 2 1 2,778 4,180 71,140 6 3 2,301 4,214 39,197 3 1 2,299 3,939 41,710 2 1 2,058 4,185 67,318 -- 1 Taipei Int'l Auto Parts & Accessories Show (AMPA) (a joint exhibition with the Taipei International Automobile Electronics Show) Taipei International Cycle Show Taipei International Electronics Autumn Show (Renamed the “Taipei International Electronics Show” in 2008) 13 Taipei Int'l Plastics & Rubber Industry Show (Held every other year) Taipei International Book Exhibition 2,028 2,242 (2006) (2006) 2,009 (2005) 11,582 -- 3 -- 1 20,821 -- 2 1,831 Approx. (Professionals) 320,000 TPCA Show 1,612 Taipei Int'l Food Show 1,583 2,992 29,074 -- 2 1,560 1,943 11,323 -- 2 Taipei International Sporting Goods Show Source: TAITRA, 2008/2 3. World Leader in Industry Cluster Development As the government puts forth its maximum effort for the promotion of the “two innovations—technological innovation, brand innovation” and “two highs—High technology-concentration, high added-value” strategies, Taiwan’s industry clusters will continue to grow more competitive. In both 2007 and 2008, Taiwan was ranked No. 1 in the world by the World Economic Forum (WEF) in terms of industrial cluster development, making it a role model for the entire world. In addition to brilliant performance in the hi-tech industry, Taiwan has also successfully developed local clusters of indigenous cultures, crafts, aesthetics, and other such conventional industries, including the digital contents and ceramic clusters in Taipei; the CD-ROMs, automobile, and glass clusters in Hsinchu; the bicycles, precision machinery and musical instrument clusters in Taichung; socks and bicycle clusters at Changhua; and TFT-LCD, IC, and sweaters clusters in Tainan. In addition to remarkable exhibition halls, high-caliber human resources, and professional facilities, teamwork and development efforts from affiliated industries are also a key to successful MICE industry development. Taiwan has long been praiseworthy for its brilliant performance in the communications industry. In other fields including machine tools, bicycles, auto parts, sporting goods, and plastic processing machinery & equipment, Taiwan’s performance has been equally remarkable. To Taiwan, “industry” has become an important tool for boosting the momentum of MICE industry growth. 14 “Industry” Providest Momentum to boost MICE Industry Growth in Taiwan Source: TAITRA, 2008/2 4. Abundant Human Resources for the Service Industry Taiwan is well-known for its highly educated populace, turning out more than 50,000 new masters degree and Ph.D. recipients each year, which is vital to its information & communications, optoelectronics, semiconductors, and medical care industries that win local hosting rights for numerous international conventions each year. In order to facilitate MICE industry personnnel needs, the MOEA Department of Commerce (DOC) has introduced the “High-caliber Service Professionals and Experts Accreditation Project” as a means to support the nurturing of such personnel. In addition to providing education & training programs for such professionals, the DOC has tried hard to match the right professionals to the right trades, giving MICE industry human resources the maximum level of upgrading and utilization. 15 5. Abundant Cultural and Tourism Resources A survey conducted by the Tourism Bureau (TBROC), Ministry of Transportation & Communications (MOTC) aimed at foreign visitors to Taiwan showed that “fine foods,” “scenic attractions,” and “friendly people” are the key to attracting foreign visitors. Night markets, Taipei 101, and the National Palace Museum are rated as the island’s foremost attractions. Government tourism policy implementation and tourism promotions are currently in full swing, and the total number of visitors to Taiwan is expected to reach five million in 2008. 6. Optimal Location in Asia’s Transportation Hub Taiwan is located at the hub of the East Asian and Pacific regions, where all major cities in the Asia-Pacific Region can be reached by air in an average of 2 hours and 55 minutes. Taipei has the advantage of close proximity to these major cities, and enjoys excellent access to both domestic and foreign destinations. You can reach 56 major cities worldwide through international routes, and domestic routes are operated by no less than three airlines. In adddition, since service began on the Taiwan High Speed Rail in 2007, inter-city travel has become extremely convenient, making a daily commute between the northern capital of Taipei and the southern city of Kaohsiung possible. 16 (II) Investment Niches and Optimal Investment Items The race to grasp exhibition related equipment and facilities by leading Asian countries in recent years has lead to cutthroat industry competition. While Taiwan’s MICE industry has only existed for a quarter century, it is the proud owner of such leading brand names as Computex Taipei, TIMTOS, AMPA, Taipei Cycle, Taitronics, and Taipei Book Exhibition (TIBE). In future, the government will continue to support the construction of new exhibition halls for an ever stronger MICE industry. OptimalForeign Investment Opportunities Categories Investment Items Facilities Commercial Building Design International Convention Centers Shopping Malls Hotels MICE Organizers Meeting & Conference Organizers Exhibition Organizers Peripheral Firms Public Relations Consultants Translation Services Media Travel Agencies Transportation Industry Decoration & Design Source: Compiled for the present study, 2008/2 In terms of hardware, commercial building design, international convention centers, shopping malls, and hotels all make good investments for foreigners. Riding the wave of the industry boom, we should be holding bigger exhibitions in better convention centers. MICE industry success depends on both available facilities and expertise, and this makes both public facilities at hotels and marketing specialists important assets. Taipei City currently lacks adequate hotel rooms (with approx. 12,000 hotel rooms in total) and venues to accommodate large-scale international conventions of over 500. The government is advised to boost constructions of international convention centers and world-class hotels while taking advantage of local 17 scenic charms so that the tourism and MICE industries will closely complement each other for their mutual benefit. After winning the World Trade Centers Association (WTCA) Best Practice title, the TICC is hoping to diversify their function from “provider” to “organizer.” Of the nearly 100 professional and consumers-oriented exhibitions held each year at the TWTC, over 20 international exhibitions are hosted by TAITRA, as private organizers in Taiwan tend to lack the competence to sponsor international exhibitions. As exhibitions in Taiwan are being gradually transformed into a service-oriented industry, the market stands to profit from know-how from European and American exhibition companies, as well as from collaboration with government or association for the immediate development of new exhibitions. Peripheral industries are the real winners when it comes to local exhibitions and conventions. In addition to buyers and other visitors, international conventions bring in tickets and hotel sales, as well as consumer and professional knowledge. In terms of peripheral support industries, public relations consulting companies, translation firms, media, decoration, utility services, transportation, and travel agencies all make for good investments. At present, most Taiwanese enterprises fall into the small-and-medium enterprises category and there are not many foreign enterprises involoved in the MICE industry. As MICE in Taiwan is privy to many industry advantages, such as plentiful high-grade human resources and ithe island’s location at the heart of the Asia-Pacific region, peripheral industries are expected to thrive alongisde the MICE industry as it continues to strengthen. In addition, Taiwan’s information and communications, electronic components, semiconductor, conventional machinery, and textile industries hold an immutable global position in their respective industries, and their infinite development potential, in combination with local tourism resources, makes for perfect conditions for foreign investment in the development of an international MICE industry. 18 IV. Successful Examples of Cross-Border Strategic Alliances and Foreign Investment in Taiwan (I) Uniplan (Germany) Uniplan was established in Germany in 1960. Headquartered in Cologne, Uniplan operates numerous branches in Paris (France), Basel (Switzerland), Budapest (Hungary), Shanghai, Beijing, Hong Kong, and Taipei. Uniplan primarily offers expert services in planning exhibition and public relations events, exhibition display planning and design, visual image design, as well as museum planning and design. In 1982, the Uniplan Group established Uniplan Taiwan in Taipei. In order to provide its clients with integrated marketing services, Uniplan then established Intercon Convention Management and Indeed Marketing Communications to meet client needs for exhibition curators, brand planning, strategy analysis, innovative design, project management, and on-site services. Uniplan currently organizes more than 100 exhibitions and conventions worldwide. Uniplan employs 80 full-time professionals in Taiwan. Long-term clients include key enterprises and government institutions such as Far EasTone Telecommunications, Gigabyte, EVA Air, China Motors Group (CMC), Unilever Taiwan, the TBROC, Taiwan Visitors Association, TAITRA, Taiwan Textile Federation, Taiwan Association of Machinery Industry (TAMI), and Taipei Electrical and Electronic Manufacturers’ Association (TEEMA). (II) Messe Frankfurt (H.K.) Ltd. Taiwan Germany is the most successful country in the world in terms of MICE industry development, and Messe Frankfurt Ltd., with a EUR400 million turnover in 2006, is the world’s second largest industry company after Hanover-based Duetsche Exhibition Corporation. Of the 17,000-plus exhibitors in Frankfurt-based exhibitions in 2005, four of its ten top exhibitor-origin area are in Asia; among them, China ranked 2nd, India and Taiwan 3rd, and Hong Kong 8th. A key to Messe Frankfurt’s continuous growth is the revenues earned by its overseas subsidiaries. Messe Frankfurt’s total turnover in Asia in 2006 was approximately EUR50 million, which accounted for 19 nearly half of its total overseas turnover. Its brand names in Asia include Automechanika, Ambiente, Heimtextil, Interstoff, ISH, Techtextile, Beautyworld, Light + Building, Musikmesse, Prolight + Sound, and Paperworld. Since its establishment in 1994, Messe Frankfurt (H.K.) Ltd. Taiwan has been responsible for attracting Taiwan-based firms to participate in European exhibitions. In 2006, more than 1,000 Taiwanese companies participated in exhibitions in Frankfurt. 20 V. Industry Investment Incentives In view of its global development poential, the Executive Yuan has designated the MICE industry as a focal point in the “Challenge 2008 National Development Plan,” and approved the “MICE Industry Development Project” on July 8th, 2004. The “Executive Yuan Tourism Development & Promotion Committee MICE Task Force” was established in November 2004, and is currently working on integrating government resources. As the supervisor of MICE industry development, the MOEA established the “MICE Industry Development Promotion Task Force” as a single service-window to map out MICE industry operating mechanisms, nurture industry development, attract international MICE industry shows to the island, and elevate the international competitiveness of Taiwan’s MICE industry. Government Policies for MICE Industry Promotion Year.month 2002.05 Highlights The Executive Yuan highlighted the MICE industry as a focus for its “Challenge 2008 National Development Projects.” 2004.07 The Executive Yuan approved the “MICE Industry Development Project” as a key project for national development, to be implemented during 2005~2008. 2004.11 The “Executive Yuan Tourism Development & Promotion Committee MICE Task Force” was established for the coordination and integration of agency resources. 2004.11 As a part of the “Guidelines and Action Projects for Service Development,” the government made the “ MICE Industry Development Project” a flagship project for tourism, sports, and recreational services. 2006.05 A single service-window was established for the “MOEA MICE Industry Development Promotion Task Force” to establish MICE industry operating mechanisms. 2007 The MOEA plans approximately US$18 million in investments for MICE promotions ~2008 and marketing. An estimated 30,000 local firms are expected to benefit from this plan, which will attract 800,000 visitors to domestic exhibitions and 22,000 foreign buyers to do business in Taiwan, thus creating a trade throughput of up to US$1.6 billion, with US$123 million in fringe benefits for peripheral industries. 2008~ Scheduled to begin construction in November 2008, the Kaohsiung Exhibition & Convention Center is expected to commence operation in 2011. 21 Build up TWTC Nangang as a second-generation exhibition facility. Source: Organized for the present study, 2008/2 In a bid to facilitate the rapid development of the MICE industry, the Taiwanese government offers a variety of investment incentive measures, including tax incentives, R&D subsidies, low-interest loans, personnel training and meeting & exhibition assistance, as well as flexible immigration entry mechanisms for participants, to assist MICE industry players and attract foreign investments. 22 Government Industrial Investment Incentives Item Tax Preference ※Statute for Contacts Promoting Private Public Construction Commission, Participation in Public Construction Executive Yuan http://ppp.pcc.gov.tw/pcc_site E-mail: bot@pcc.gov.tw Tel: +886-(0)2-8789-7500 ※Regulations Governing Application of Taxation Agency, Ministry of Profit-seeking Enterprise Income Tax finance, R.O.C. Exemption to Private Institutions http://www.dot.gov.tw Participating in Public Construction E-mail: b0@mail.mof.gov.tw Projects Subsidy Tel: +886-(0)2-23228421 ※Principles Governing Subsidies for MICE Program Office, DOC Meetings and Exhibitions Held in http://www.meettaiwan.com Taiwan E-mail: mpo@meettaiwan.tw Tel: +886-(0)2-2392-0788#106 ※Commercial R&D Incentive Scheme Department of Commerce, MOEA http://gcis.nat.gov.tw E-mail: docmail@moea.gov.tw Tel: +886-(0)2-412-1166 ※Principles Governing Trade Expansion Bureau of Foreign Trade, MOEA Subsidies http://cweb.trade.gov.tw E-mail: boft@trade.gov.tw Tel: +886-(0)2-2351-0271 ※Regulations Governing Tax Tourism Bureau, R.O.C. (Taiwan) Deductions for International Tourism http://www.taiwan.net.tw Promotions Related Investments by E-mail: tbroc@tbroc.gov.tw Tourism Industry Firms in Tel: +886-(0)2-2349-1500 Conjunction with Government Policy ※Guidance Measures for International Tourism Promotions and Marketing Efforts on Organizations the Part and of Private Profit-seeking Enterprise 23 ※Implementation International Rules for Research, Development and Convention Related Evaluation Commission, Incentives in Kaohsiung City Kaohsiung City Government http://rdec.kcg.gov.tw E-mail: kcgrdec@kcg.gov.tw Tel: +886-(0)7-331-3942 Personnel ※International Experts Recruitment Department of Investment Training Services, MOEA http://hirecruit.nat.gov.tw E-mail: hirecruit@taitra.org.tw Tel: +886-(0)2-2370-9687 ※Military Training Service Application Military Training Project Office http://rondi.mnd.gov.tw E-mail:mndsys@iii.org.tw Tel:+886-2-2736-8088#3414 ※R&D Substitute Service R & D Substitute Service Program Office, Ministry of t he Interior http://rdss.nca.gov.tw E-mail: rdss@mail.nca.gov.tw Tel: +886-(0)2-2736-6066#206 ※Meeting and Convention Service Taiwan External Trade Personnel Nurturing and Certification Development Council Plan ※Meeting http://mice.iti.org.tw and Convention Service E-mail: stcheng@taitra.org.tw Professional Certification Exam Entry Mechanism ※Operational Procedures Tel: +886-(0)2-27255200#2570 for the MICE Program Office, Mechanism Allowing Flexible Entry http://www.meettaiwan.com by Foreign Nationals (Including PRC E-mail: mpo@meettaiwan.tw Nationals) Participating in Tel: +886-(0)2-2392-0788 International Conventions in Taiwan Source: Compiled for the present study, 2007/12 24 DOC VI. Industry-Academia Collaboration in Taiwan The MOEA planned to invest approximately US$18 million into MICE industry promotions and marketing in 2007 and 2008, with the aims to implement 12 related measure such as providing impetus for industry development in central and southern Taiwan, the nurturing and certification of meeting and exhibition professionals, as well as the stimulation of export trade growth to further elevate Taiwan’s international standing with reference to the MICE industry. An estimated 30,000 local firms are expected to benefit from this plan, which will attract some 800,000 visitors to domestic exhibitions and 22,000 foreign buyers to do business in Taiwan, thus creating a trade throughput of up to US$1.6 billion, with US$123 million in fringe benefits for peripheral industries. Taiwan is actively promoting MICE industry development through the integration of its government organizations, and corporate and industry associations. MICE Collaborating Promotional Institutions in Taiwan Institution Website Council for Economic Planning and Development www.cepd.gov.tw Department of Commerce gcis.nat.gov.tw Department of Investment Services www.dois.moea.gov.tw Bureau of Foreign Trade www.trade.gov.tw Meeting Exhibitions Events Travel www.meettaiwan.com Tourism Bureau www.taiwan.net.tw Research, Development and Evaluation Commission, rdec.kcg.gov.tw Kaohsiung City Government Taiwan External Trade Development Council www.taiwantrade.com.tw Taipei Exhibition & Convention Association www.texco.org.tw Taiwan Convention & Exhibition Association www.taiwanconvention.org.tw I-Lan International Convention & Exhibitions Association www.icea.org.tw Tainan Convention & Exhibition Development Association www.tceda.org.tw Kaoshiung Convention & Exhibition Association www.kcea.org.tw China Productivity Center cpc.tw Taiwan Institute of Econonic Research www.tier.org.tw 25 Source: Compiled for the present study, 2007/12 26