The incubation of innovative businesses and R&D have been the driving forces and a reserve of energy behind the nation's overall industrial development, while development of knowledge and its effective application have also been the main drivers of sustained growth for the nation and society. Therefore, how to shape an ideal environment for the sustainable operation of small and medium enterprises while strengthening and fostering an advisory mechanism, establishing an innovation-oriented development model for industry and supporting this with a mechanism designed to transform knowledge and creativity into competitiveness and financial power should be the key themes for policy regarding small and medium enterprises.

　　 Taiwan's incubation center has an 11-year history. It went through startup and planning stages, rapid growth, a strengthening phase, and a period for the construction of a business-startup platform in the course of development to become today's well-integrated advisory system. The incubation center combines the knowledge and R&D capabilities of the government, academia, research institutions and the private sector to provide an environment and ideal package of measures to develop the capacity for creation of innovative knowledge and competitive advantages and apply knowledge and innovation to boost the effectiveness of corporate operation. The incubation center has provided a key boost for small and medium enterprises in transformation and has been a facilitator promoting interaction between small and medium enterprises and local industries, and this is a position and role that has been growing in importance.

　　By the end of 2006, 95 incubation centers were established nationwide and 2,500 businesses have been developed. The value of investment in the incubated companies exceeds NT$40 billion, and 35 of these businesses have successfully listed on Taiwan's stock markets. To further improve the capabilities and quality of the incubation centers, the “Incubation Center Knowledge Service Environment Construction Project” was started in 2006. This program established two incubation support centers, which effectively provided mechanisms for integration of resources of incubation centers nationwide as well as the gradual entry and application of knowledge management, establishing an environment for knowledge sharing and moreover extending the efficiency of this consultation service, leading to the formation of industrial clusters. From another aspect, in the process of implementing knowledge management, businesses have learned how to transform into knowledge-based enterprises, and through the accumulation and integration of knowledge, businesses have created new values, driving the overall potential of small and medium enterprises!

　　An incubation center spurs differentiation as a natural result of a regional environment, the type of business and the available resources. The contents of “The Introduction to Incubation Centers” includes and covers the individual strengths and specializations of incubation centers everywhere in the nation as well as the market position and an introduction of related resources that will help foster exchange between the incubation centers and businesses and corporations. Looking forward to future directions for the development of incubation, we will first construct a support system to promote regional incubation systems and develop in the direction of helping businesses internationalize as part of an ideal backup for incubating companies' sustainable development. Secondly, we will build individual incubation centers' development characteristics and clearly position them to gradually become more professional and use their platforms effectively, combining the advantages of various industries and inter-disciplinary exchanges to inspire innovation and establish Taiwan as a unique breeding ground for entrepreneurialism.

Director General
Small and Medium Enterprise Administration
Ministry of Economic Affairs
May 2007