The annual Asia-Pacific Small Business Survey conducted by CPA Australia reveals a significant V-shaped rebound in confidence in Taiwan’s economy amongst small businesses. 58 per cent anticipate the local economy to grow this year, up from 39 per cent in last year’s survey. This is also the highest result for Taiwan since it was included in this regional survey in 2018.
An improving domestic economy is likely to have contributed to a boost in small business confidence. Nearly two-thirds (63 per cent) of Taiwanese small businesses expect to grow in 2024, up considerably from 48 per cent in last survey.
Mr Elic Lam FCPA (Aust.) Honorary Taiwan Adviser at CPA Australia commented: “Trade is a pillar industry for Taiwan’s economy. With international trade gradually improving, small businesses in Taiwan have resumed exporting after a difficult period brought on by the pandemic.”
Over half (56 per cent) of the surveyed businesses expected their sales to overseas markets will increase this year.
“There has been a rapid increase in global demand for high-tech products, particularly semiconductor. This creates opportunities for big and small Taiwanese enterprises as they play an indispensable part in the technology supply chain, ranging from R&D to manufacturing, and logistics.”
Improving business conditions is driving demand for labour. Last year, 31 per cent of small businesses surveyed said they increased the number of their staff. This is the highest result for Taiwan since being included in the survey. This trend is expected to continue, with 41 per cent planning to expand their headcount this year, also surpassing the previous survey record.
“Hiring more employees last year was one of the proactive actions many small businesses undertook as they experienced signs of recovery. Only when small businesses are confident in the future and the environment is predictable, are they willing to employ new staff and increase their focus on innovation.
“Facing a competitive employment market, employers should consider strategies to retain good staff to address talent shortages and use technology to control increasing staff costs.”
While small business confidence is picking up, concerns over increasing costs have also risen. Last year, 31 per cent of respondents nominated cost control as the key beneficial driver to their businesses. While increasing costs (32 per cent) was identified as the top business challenge. The costs considered most detrimental to business were staff costs (33 per cent), followed by materials (29 per cent) and rent (22 per cent).
Lam said, “Small businesses can adopt various measures to navigate the challenges posed by cost pressures, such as embracing innovation, streamlining operations to enhance efficiency or leveraging digital tools to alleviate labour constraints.”
A record-breaking 62 per cent of surveyed businesses sought external funds in 2023. The most popular reason was to use that funding to fuel business growth. Banks were the primary source of that capital. This momentum is expected to carry forward into 2024, as three-quarters of the respondents indicated they will or may seek external funds this year.
There has been a notable improvement in access to finance. Last year, 57 per cent of respondents indicated that seeking external finance was easy or very easy, up from 30 per cent in the previous survey. This year, half of the respondents anticipated the continuation of this state.
Lam noted that compared to other surveyed markets, Taiwanese respondents were less willing to seek advice from external consultants. He suggested, “Taiwanese small businesses should more actively seek advice from professionals to help them in expanding their digital transformation and improve financial performance, such as advice for managing financing costs and optimising cash flow.”
Last year, 21 per cent of surveyed businesses sought professional advice from accountants and 24 per cent sought from banks and finance companies.
The survey also highlights unprecedented levels of innovation and adoption of digital tools by Taiwan’s small businesses. Seventy-six per cent of surveyed businesses indicate they intend to innovate in 2024, the highest result for Taiwan. Additionally, among the businesses surveyed, 59 per cent reported that over 10 per cent of their revenue was generated through online sales last year, while 57 per cent acknowledged receiving over 10 per cent of their revenue through digital payment methods.
“The profound shift in consumer behaviour towards online platforms, spurred by the pandemic, has been pivotal in driving the uptake of digital tools by small business. With this shift evident in many other markets, Taiwanese small businesses should continue to leverage Government support schemes such as ‘Increasing the competitiveness of small and medium-sized enterprises’ to strengthen their digital capabilities to trade online abroad.”
CPA Australia surveyed 4,222 small business owners or managers across 11 Asia-Pacific markets across Australia, Mainland China, and Malaysia, including 311 respondents from Taiwan.
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About CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 173,000 members in over 100 countries and regions, including more than 22,200 members in Greater China. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
