Taiwan is stepping up efforts to attract budding tech talent from around the world as it seeks to cast itself as a hub for tech start-ups.
From next month, a team of venture capitalists and government officials will be on the lookout for start-ups within Taiwan's shores and beyond to get them to set up shop in Taiwan's "Asian Silicon Valley" in northern Taoyuan city.
To sweeten the deal, the government is dangling a NT$10 billion (S$439 million) carrot to co-invest in up to 100 firms with the potential to expand their market reach over the next seven years.
The aim is to get companies to establish their research and development centres in Taoyuan, where they can hothouse and groom more tech creators and, in time, build a thriving tech scene.
The government hopes that this will also spawn spin-offs to deepen Taiwan's tech capability in artificial intelligence, big data analytics, augmented reality and the Internet of Things (IoT), which involves connecting objects by allowing them to collect and share data.
S'pore firms keen to tap market
Hoping to cash in on an under-served market, Singapore's e-commerce cashback platform, Shopback, launched its portal in Taiwan in August.
Since then, transactions have doubled month on month, reaching $217,000 last month.
Said Shopback co-founder Joel Leong: "There are a lot of opportunities here as consumers are a lot more savvy when it comes to online shopping."
Shopback, which has more than 500 merchants, including popular shopping and travel sites Groupon, Lazada and Agoda, is only the second website in Taiwan to allow customers to get back a percentage of their purchase money each time they use it to make a transaction.
Mr Leong, 29, is now based in Taipei to build an operations team, comprising local engineers and frontline staff. Set up in 2014, Shopback has also expanded into Malaysia, Indonesia and Thailand.
But, with nearly a third of Taiwan's consumers shopping online, Shopback is among many Singapore start-ups like online marketplace apps Carousell and Shopee that have set up shop on the island, seeking a slice of its captive market.
According to a Nielsen report, the island's e-commerce market exceeded U$34 billion (S$47 billion) in market size last year and is expected to grow by 10 to 20 per cent annually in the next five years.
In comparison, the Singapore's e-commerce market was valued at about US$1 billion last year, while South-east Asia was valued at US$5.5 billion, according to a recent report by Singapore's investment company Temasek Holdings and Google.
Mr Leong said Taiwan's friendly business environment has made it easier for his firm to establish its presence. "The companies seem to be very open-minded and are very willing to give foreign companies like ours a chance and work with us... That is the important hurdle to cross."
The plan is to increase Taiwan's global IoT market share from 3.8 per cent to 5 per cent by 2025, with a production value of between NT$4.6 trillion and NT$9.5 trillion, according to the National Development Council.
The council's Deputy Minister Kung Ming-hsin told The Sunday Times: "We already have the hardware and are building the infrastructure. What we need now is to create an ecosystem in which the best talent and expertise can impart their knowledge and skill sets to others."
Project "Asian Silicon Valley", which was approved by the Executive Yuan last month, is aimed at transforming Taiwan into a more innovative digital economy, he added.
The plan was a key plank in President Tsai Ing-wen's election platform to support Taiwan's industrial transformation and help domestic firms tweak their business models in an evolving global market.
It is also part of her "New Southbound Policy" as the government goes knocking on the doors of South-east Asian countries, India, Australia and New Zealand to do business to make the island less dependent on China.
Professor Kung said the evaluation team is eyeing start-ups and talent from not only the Silicon Valley in the United States but also the region. But he concedes that Taiwan is facing stiff competition from other tech-savvy countries such as Singapore, South Korea and Japan.
Singapore's start-up environment, for instance, was ranked 10th in the world last year, according to a report by US business analytics company Compass.
The Singapore Government also turned a former flatted factory into the country's biggest innovation hub - Block 71 - which is now home to 250 start-ups.
Despite the challenges, Prof Kung is optimistic that Taiwan can become the region's innovation hub.
It was recently ranked 10th in innovation and has one of the world's largest population of software and hardware engineers, who are responsible for producing parts for gadgets and equipment by global brands like Apple, Microsoft and electric car company Tesla.
Another plus is Taiwan's location. "We are about four hours away from anywhere in Asia, making us the natural hub between the US and Asia," said Prof Kung.
While Taiwanese technopreneurs cheer the government's latest move, they say it will take more than just money to jump-start the tech scene here.
Mr Brandon Chiang, a co-founder of one of Taiwan's biggest start-up incubator and accelerator AppsWorks Ventures, said: "Putting in money is a good start but for a 'Silicon Valley' to take off, you need to build strong community relationships in which start-ups have good mentors to guide them along and give them access to the market so they can be successful."
Singapore start-up Shopback, which launched its retail cashback portal here in August, does not rule out seeking new funds in Taiwan for future expansion.
Its co-founder, Mr Joel Leong, said: "So long as the terms are right and it will help to create a more robust and vibrant environment where start-ups like us can also benefit and learn."