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Get the full version of the" 2021 Key Report on Taiwan's Innovation and Incubation Industry."
Get the full version of the" 2021 Key Report on Taiwan's Innovation and Incubation Industry."
There are many different ways for companies to interact with new start-ups. From three perspectives: cost of participation, cost of expenditure and risk of investment, international events involving Corporate Startup Engagement (CSE) can be simply divided into eight models. The first is about the Events, where you can interact with start-up entrepreneurs or students through seminars, hackathons, start-up competitions and sponsored start-up forums. For example, P&G has been looking for co-founding partners since 2018 through the P&G Ventures Innovation Challenge.
The second is about providing support services such as legal advice, finance and accounting, and marketing channels for start-ups with internal resources or linked resources. For example, Macy's has been assisting women, LGBTQs and military-initiated start-ups to enhance their supply chain management and brand management programs through The Workshop at Macy's since 2011. To date, 125 new start-ups have graduated from The Workshop at Macy's, such as Lamlk, Alex Woo and Verona.
The third is about offering free or discounted enterprise products and services to start-ups through Startup Programs, which help companies find start-ups that have the potential to become key partners or large customers. The most classic case is that AWS has been expanding its cloud ecosystem since 2013 by offering new and innovative services through AWS Activate. There are also companies that open up their offices or laboratories to newcomers through 'Co-Working Space' to enhance the interaction between companies and newcomers.
In addition to cooperating with external start-ups, some companies or organizations encourage employees to use company resources to start businesses, and then spin off from the parent company to become "Spins Off" after the business grows strong. For example, the University of Pittsburgh Medical Center established UPMC Enterprises Investment Biomedical innovation and spin-off company. There are also a number of companies and organisations that offer three to six month mentoring programmes through the Accelerator. This type of programme is aimed at new start-up teams that have already established a product, helping them to access sales channels, capital and contacts. These include, for example, the Microsoft New Venture Accelerator and PwC's Scale-up Business Growth Accelerator.
Last but not least, it is about the riskiest CSE activities, which include 'M&A' and 'Investment' activities. The former involves buying new and innovative products and services with large sums of money through mergers or acquisitions and integrating the team into the business. The latter involves the rapid acquisition of venture capital shares by means of loans, debt, limited partnerships, corporate ventures, private equity funds, etc.
In any case, the various CSE models are designed to achieve the three milestones of 'validating innovation', 'building reputation' and 'deep integration'. In the trend-testing phase, the focus is on brainstorming, understanding future trends and exploring potential business opportunities through proof-of-concept (POC) projects and new start-ups. In the reputation building phase, it is about fostering new innovations to create a positive image of supporting them and giving back to the local community. In the deep integration phase, it is about further investing in or acquiring POC products and services and teams that are achieving good results, and turning external innovation into internal innovation.
The COVID-19 pandemic has led to a booming digital economy. In order to quickly respond to this trend and grasp the business opportunities brought about by the "New Normal", various industries are actively engaged in the pace of digital transformation. Some companies have already invested in digital transformation through the CSE model, with the most aggressive investments being made in six industries: information and communications, traditional manufacturing, medical services, retail and catering, financial services and media and entertainment.
1st: The ICT industry expects to accelerate the establishment of decentralized manufacturing through digital technology in order to enhance the resilience of the supply chain. At the same time, the ICT industry is also looking for a second growth curve by developing innovative smart industries through technologies such as AIoT and 5G. For example, in 2016, Mighty Electronics cut out the team dedicated to new start-up orders from the original business unit and established the IoT hardware accelerator, Mighty Net, which has helped a total of 174 new start-ups pass POC validation by the end of 2020, with an actual order conversion rate of around 30%. With the growing awareness of the brand, Mighty Net will receive a total of 60 orders for the production of new innovations in 2020. Its annual revenue will reach NT$130 million and it will officially turn a profit in 2020.
2nd: The traditional manufacturing industry, which is highly labor-intensive, is looking to reduce the demand for manpower through automation and smart technologies, while at the same time ensuring that smart factories meet green production standards. For example, King Yuan Fu Packaging Co., Ltd., Asia's largest plastic packaging manufacturer, has established a new brand of plastic food containers made from rPET (recycled polyethylene terephthalate) in 2018, hoping that innovation will be accelerated through external collaboration. "The NTU Corporate Accelerator X King Yuan Fu Vertical Accelerator, to be established in 2020, aims to reshape the corporate culture of King Yuan Fu Packaging Co., Ltd. into a Benefit Corporation (B Corp) that embraces both corporate responsibility and social responsibility.
3rd: Due to the imbalance in the healthcare/patient ratio and the low-exposure trend, the healthcare services industry is developing its own or collaborating with "new startups". Specific applications include the use of AI-assisted physician diagnostic systems for clinical process optimization, the introduction of hospital process automation systems to enhance healthcare capacity, and the integration of telemedicine and community care services to enhance care for the silver-haired population. For example, after visiting UC Berkeley and Stanford University, Taipei Medical University introduced the concept of a new venture accelerator to the University. In July 2020, the TMU Biomed Accelerator was established under the Office of Business Development at Taipei Medical University, which focuses on new innovations in the areas of "digital health", "AI healthcare", and "medical devices", and works with partners in the biomedical innovation ecosystem (e.g. BE Accelerator under BE Health Ventures) to help commercialize research results on new start-ups and link them to the international market chain.
4th: The rampant COVID-19 pandemic has accelerated the efforts of retail and catering operators to strengthen their delivery and e-commerce platforms, create full-channel services with marketing technology, and create low-exposure experience services through unmanned technology. For example, PChome and Chunghwa Telecom have jointly set up a venture capital fund, "Chunghwa NetHome One", with a joint investment of NT$400 million. The fund will be managed and evaluated by Cornerstone Ventures, a joint venture between the two parties, targeting "early stage" technology start-ups in the fields of e-commerce, online finance, on-demand services, smart healthcare, Big Data and AI technology. It is hoped that the resources of Chunghwa Telecom and PChome will be made available in the form of a "platform venture" to provide a platform for new start-ups to flourish.
5th: Financial service providers are using cross-sectoral integration and digital technology to create a digital lifestyle, implement inclusive financing, and enhance information security. For example, Digital, Data & Technology (DDT) at Cathay Financial Holdings Co., Ltd. actively pooled the Group's resources to develop a digital data ecosystem, and set up a Technology Innovation Group in 2019, which would systematically integrate the Group's internal needs, expand the scale of cooperation with new startups, and launched the Cathay Financial Innovation Lab that invited new start-ups from around the world, with the aim of accelerating the implementation and introduction of new start-ups to achieve financial innovation.
6th: The media and entertainment industry can be divided into three areas: media, education and entertainment, including the development of niche audiences, the use of digital technology to create virtual exhibitions, the creation of virtual and real integrated online learning services, and the enhancement of consumer experience through online travel agent (OTA) services. Since 2008, United Daily News Group has launched a digital transformation plan, integrating the Group's resources to develop diversified businesses in e-commerce, cultural and creative industries, education, entertainment and travel. In 2020, United Daily News Group and the Taidah Entrepreneurship Center (TEC) of the National Taiwan University have partnered to establish the UDN Vertical Accelerator and provide "External Start-ups Consulting" services to accelerate collaboration with new ventures and to quickly expand or find new business models.