Taiwan’s Potential in Southeast Asia
According to Jamie Lin, “If you missed the China boat, then Southeast Asia is your salvation.” Lin, the founder of Appworks, Taiwan’s earliest and most established startup accelerator program, with a fund of USD 150m, foresees Taiwan potentially making a shift from “Greater China” to “Greater Southeast Asia”.
Lin was one of the panelists at a discussion on VC investment into Southeast Asia during the opening portion of a Demo Day for MOX, the Mobile Only Accelerator. He was joined on stage by the Head of Southeast Asia Investments at Susquehanna International Group, Richard Hsu. The discussion was moderated by William Bao Bean, SOSV partner and MOX founder. The event was held at FutureWard Central in Taipei on Aug 21, 2018.
The entire discussion was captured in the video above. Here are a few highlights:
How many distinct markets are there in Southeast Asia?
Hsu and Lin: At least five or six, maybe more, depending on your business.
What’s working in favor of Southeast Asia?
Rich Hsu: Demographic trends will be against China over the next two decades, especially with a rising median age due to the one child policy. Southeast Asia has a median age of 28 years old and with a young workforce promises continued growth.
The newspaper numbers for GDP growth in Southeast Asia are generally stated at 5–6% per year, but that statistic is adjusted for inflation, so if you look at changes in prices and wages (the nominal growth rate), growth is actually more like 10–12% per year.
What is Taiwan’s position in Southeast Asian markets?
Jamie Lin: Taiwan is possibly shifting from a “Greater China” identity to a position in “Greater SE Asia.” Here are several reasons:
- Taiwan’s growing digital relationship with southeast Asia.
- Due to Taiwan’s great supply of engineers, Google, Microsoft, IBM all in the last year set up AI development centers in Taiwan. Google especially is blocked in its market access to China, so its ambitions will point elsewhere in the region.
- Taiwan as a great place for “mid-cap listings” (IPOs for companies with mid-level market capitalization), as opposed to “high cap listings” favored on the Hong Kong stock exchange.
Where does Taiwan need to improve?
Richard Hsu: Taiwan needs to be more aggressive internationally and take more risks. This is one of the main things preventing it from becoming a regional leader.