Demand Conditions

Porter (1990), the more demanding the customers in an economy, the greater the need for companies in that economy to become more innovative while improving their competitiveness and quality. Therefore demand is at the root of national advantage. So innovation and improvements will occur when pressure is placed on producers by buyers to innovate. When domestic buyer’s needs become more sophisticated, this provides a window to the more advanced needs of other buyers which finally create economies of scale.

Within Ireland however the domestic buying market is small therefore creating economies of scale benefits becomes more difficult as aggressive investment holds little incentive. Therefore it is safe to assume that Irish firms are unlikely to develop products with only the domestic market in mind more realistically firms will develop products with not only Ireland but also the UK and other parts of Europe in consideration also.

Irish people also have a tendency to not complain about the quality of products, which can lead to decreased pressure on producers to improve products or quality as the feedback is limited.

The Taiwanese domestic market is small but component manufacturers are still very competitive with each other to vie for big overseas contracts. Taiwan has the added advantage however of its close proximity to China, which gives them the market potential of 1.2 billion Chinese customers as well as other parts of Asia. Taiwanese customers are sophisticated and are very vocal about the quality of their products, they tend to make it known if they feel the product is substandard or not good value for money.

4.2.1 How Society Influences demand and Creates Entrepreneurs Culture and education can foster a spirit of enterprise and strengthen the motivation and capacity of entrepreneurs and potential entrepreneurs. Society not only influences the demand in a society by the level of their involvement but on the other side of the coin they also determine the level of entrepreneurship and innovation that the society partakes in. The environment in which one lives reflects the likelihood of entrepreneurial activity taking place. Entrepreneurs are more likely to emerge if the culture is supportive and encouraging of entrepreneurs and supported by a strong economy with buoyant consumer demand.

Taiwan has developed its entrepreneurial culture from an attitude of hard work and self improvement. Simple entrepreneurship in Taiwan dates back many generations with many people starting their own business, this is where we get the name “Laoban” which directly translated means entrepreneur-owner. Most of Taiwan’s original entrepreneurs were independent and relied on personal networks and relationships for business purposes. These personal networks with a social focus suited the “guanxi” or relationship orientated business approach. Taiwan’s economy is mainly export orientated and these small networks still play a role today as a lot of entrepreneurial activity is still done using this process. Many Taiwanese still have the mentality that nothing beats being your own boss as being your own boss is something to be proud of in Chinese societies, which still stimulates many of the smaller ventures that are operating today. Taiwan has one of the highest concentrations of companies in the world with about 1.2 million registered companies according to Taiwan’s ministry of Economic Affairs. Taiwan’s entrepreneurial culture is very vibrant with many of the more traditional entrepreneurial ventures including illegal roadside stalls. These makeshift stalls can be a good training ground for young budding entrepreneurs or a way to hone their entrepreneurial skills.

Mr. Ryan Wu vice-president of 1111 Job Bank, has identified two groups that are the most likely to start their own ventures, the first is young people below 28 years old and the second is people above 40 who are looking to make a mid-career switch.

There is a healthy spirit of risk-taking and optimism, which are crucial elements of entrepreneurship and with the increased investment in education many are becoming more highly educated entrepreneurs.

In Taiwan the general manager is registered as the responsible person and they are then personally and criminally liable for the actions of the company. This is different from most western societies. The general manager can then be responsible if the company is engaged in fraud and in extreme cases be jailed. The environment in Taiwan however is conducive to operating a company and the costs are generally low as compared to other countries with the regulations being quite clear. To start a company the minimum investment required for a company limited by shares is NT$1 million, and for a limited company it is NT$500,000. Tax issues are also reasonably clear with companies having to pay 25% tax on the profit made every year and a 5% sales tax every two months.³⁹

Ireland’s culture towards entrepreneurship has improved in the last few years as can be seen with the increased abilities and confidence in the entrepreneurs. More people have become aware of other successful entrepreneurs, which in turn has brought about interest in entrepreneurship as a career choice.

Irish society has become more diversified over the past few years with a significant amount of inward migration and nationals returning. There are five main regions of origin for non-Irish nationals living in Ireland including; UK, EU Countries, Asia, African, non-EU European countries and the US.⁴⁰ This influx has been a major contributor to the broadening of cultural diversity in Ireland and in some ways has spurred entrepreneurial spirit.

Ireland might not be quite as entrepreneurial as Taiwan, in Ireland the culture is a little more conservative, with 39% of adults displaying a ‘high fear of failure’ towards starting their own business. Starting a new business represents a good career choice according to

39 Taipei Times, Take the Plunge: How to become an entrepreneur, Aug 15, 2005, Page 11, http://www.taipeitimes.com/News/biz/archives/2005/08/15/2003267856

40 National Consultative Committee on Racism and Interculturalism (NCCRI), Barriers facing ethnic minority entrepreneurs in Ireland, Submission to the EMERGE Equal Project,

http://www.nccri.ie/submissions/05JunEmerge.pdf

66% of adults, while 85% of adults consider that there is a high degree of status associated with successful entrepreneurship.⁴¹ Within Ireland there is a positive supportive attitude towards entrepreneurship with an increasing number of role models as more government policies and successful entrepreneurs emerge. The fact that the economy is quite strong is also a factor in encouraging a positive attitude towards starting a business. The media and a growing population allows society to positively strive towards entrepreneurship. However some of the areas of concerns include a lack of access to early stage finance, the small domestic market, the rising costs and their impact on competitiveness, and regulatory issues.

One of the main differences between Ireland and Taiwan is that entrepreneurship in Ireland is less need based than Taiwan. Many of Taiwan’s small SMEs emerge from sheer necessity or from a gap in the market where as in Ireland entrepreneurship is a little less loose. Ireland is less innovative than Taiwan and business ideas are mostly based on existing technology and existing local markets.

41 Entrepreneurship in Ireland in 2004, An Overview,