Mon, Aug 22, 2011 page12

• INTERVIEW: Stan Shih discusses Taiwanese business

  Taiwanese tech guru Stan Shih, 67, the founder of Acer Group, focused on the lucrative, but risky, business of building a Taiwanese global computer brand. Since retiring, Shih has chaired venture capital firm iD SoftCapital Inc. On Tuesday he sat down with a group of reporters, including ‘Taipei Times’ staff reporter Jason Tan, to share his thoughts on how local tech firms could better prepare for ‘patent wars.’

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  Taipei Times (TT): Taiwanese tech companies have recently found themselves engaging in what have been called “patent wars,” and their business operations could be undermined if they fail to handle related lawsuits properly. How should Taiwanese firms tackle those challenges? [Editor’s note: HTC Corp (宏達電), the world’s No. 5 smartphone brand, is being sued by Apple Inc for allegedly violating its patents. HTC may face an injunction and cannot sell its smartphones in the US if it loses the lawsuit.]

  Stan Shih (施振榮): If you ask whether Taiwanese enterprises will be affected by the rising New Taiwan dollars or weakening US economy, then the answer is an emphatic “Yes.” These external factors will be a blow to Taiwanese firms, but I think they should “welcome” the challenge.

  Challenges are part and parcel of life, and tackling them is what adds meaning to life. We have to stay positive and think about how we should stand up to those predicaments we encounter in life. Taiwanese firms have to be “physically fit” to compete in the world of business. Nowadays, competition in the market is “dynamic,” meaning you simply can’t tell what tactics your rivals might engage in to defeat you.

  However, if you are fit and agile, then you can work out solutions to resolve the issues.

  The history of Taiwanese firms in patent acquisition is much shorter [than their European and US peers,] and therefore we have not invested many resources in this area.

  Patents are accumulated over the years and if you look at what we have accomplished so far, Taiwan is actually securing far more patents than it used to.

  TT: The government-funded Taiwan Medtech Fund was recently set up as a venture capital firm investing in the biotech industry. The fund has commissioned the venture capital firm that you chair — iD SoftCapital Inc (智融集團) — as a consultant. What is iD SoftCapital’s role in that relationship?

  Shih: Venture capitalists don’t compete with each other, we cooperate. iD SoftCapital has branches in the US and Taiwan and we will consider investing with Taiwan MedTech Fund whenever we see a reasonable opportunity to do so. We hope to bring those technologies to Taiwan — not only for manufacturing, but also research and development as well as commercialization.

  There is a huge market here in Asia, and Taiwan could be the hub to make things happen. These products may eventually end up being produced in China, but Taiwan will enjoy a lead in biotechnology and sell those products to the Chinese market.

  I retired when I was 60, so I am no longer in charge of Acer Group’s day-to-day operations. There are far too many trends to watch out for and I now have the time to manage my venture capital firm. We are investing in biotech, electric vehicles and even the arts. We need to reflect on our past experiences and pave the way for the future based on those experiences.

  TT: One of Acer Group’s spin offs, BenQ (明基), is running hospitals in Nanjing and Suzhou, China. What is your take on the biotech and medical care industries? How could Taiwan position itself to take advantage of these trends?

  Shih: I have recently thought a lot about Taiwanese virtues. In a nutshell, I would say that they are to be found in how much we contribute to the world. Taiwan’s achievement in ICT [information and communications technology] is a fact and the success of many US firms would not have been possible without us.

  Unfortunately, few people knew about our contribution. For instance, it is not widely known that Taiwanese companies play a key role in the production of Apple’s gadgets.

  [Taiwanese firms such as Hon Hai Group (鴻海集團), Quanta Computer Inc (廣達電腦) and Wintek Corp (勝華) either supply -components to or assemble iPads, iPods or iPhones.]

  After ICT, Taiwan needs to find its next core strength — and biotech could be it. We need to find new competitiveness and leverage it with our existing strengths, then Taiwan will have a bigger influence in the world.

  China has been paying attention to the healthcare industry and judging from the size of its population, the market potential is huge.

  At the end of the day, head count matters in medical care. It is not just about medical equipment, Taiwan has experience in healthcare services and it would be faster to apply our experience to China rather than China introducing approaches used in the US and Europe.

  With warming cross-strait ties after the signing of the Economic Cooperation Framework Agreement (ECFA), Taiwan and China could forge a Chinese-language medicare brandname and contribute to global healthcare.

  When there is a huge market, there is always the possibility of innovation and with innovation comes a worldwide brandname. Biotech offers us the perfect opportunity to enhance our core competence.
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