Sparking the Cultural and Creative Industries with Partnership and Collaboration

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(1)國立臺灣師範大學管理學院國際企業管理雙碩士學位學程碩士論文 Double Degree Program for International Master of Business Administration College of Management National Taiwan Normal University Master Thesis. Sparking the Cultural and Creative Industries with Partnership and Collaboration. 高燕傑 Jeffrey Y. Kao. 指導教授: 沈永正博士 Advisor: Yung-Cheng Shen, Ph.D.. 中華民國 107 年 8 月 August 2018.

(2) ACKNOWLEDGEMENT. Many thanks to the chair for my thesis, Dr. Yung-Cheng Shen, who agreed to take me on as a student and make necessary arrangements amidst his incredibly busy schedule. Additional thanks to the committee members from various educational institutions, Dr. ShinChung Shao and Dr. Yihsiu Chen, who volunteered their valuable time to endorse this thesis. I must also graciously thank the dean of the College of Management, Dr. De-Wai Chou, for his guidance along this one-year MBA journey. Thank you additionally to all the NTNU and USC professors for sharing their knowledge, expertise, and experience. I would also be remiss if I did not thank the great Cheng-Yi Wu for assisting with any needs and sending gentle reminders along the way. Moreover, I’m indebted to my boss and CEO at TotalBrand+TotalDesign, Jane Wu, who has aided me in providing resources and supplemental information based on her vast experience. Lastly, I’m eternally grateful to my parents for supporting me unquestioningly along this detour back into the business world..

(3) ABSTRACT The cultural and creative industries often consist of a small percentage of a nation’s GDP but are steadily growing in size and importance, as countries begin to see these industries as representative of their specific cultural and creative traits. One such country is Taiwan, who is learning to leverage its talents to promote local products but also grow its global recognition while increasing exports. Even though many governmental and financial support mechanisms are in place, they are limited; thus, partnership and collaboration both within the industries and across other industries are critical for companies and organizations to expand their business. This paper will explore how these concepts have played out in specific business cases to understand how they can be models for other companies’ future growth.. Keywords: cultural, creative, Taiwan, partnership, collaboration. iv.

(4) TABLE OF CONTENTS. ABSTRACT ........................................................................................................iv TABLE OF CONTENTS ..................................................................................... v LIST OF TABLES ..............................................................................................vi CHAPTER I. INTRODUCTION TO THE CULTURAL AND CREATIVE. INDUSTRIES ............................................................................................ 1 CHAPTER II. LITERATURE REVIEW ........................................................... 2. The State of Taiwan’s Cultural and Creative Industries ................................................2 Specifics of Taiwan’s Cultural and Creative Industries ................................................5. C HAPTER III. MOTIVATION/RESEARCH METHODOLOGY .................. 7. CHAPTER IV PARTNERSHIP AND COLLABORATION IN ACTION ...... 9 Case Study: Liuli Gongfang...........................................................................................9 Case Study: Essence Idea Studio .................................................................................10 Case Study: TotalBrand+TotalDesign with HYC........................................................11. CHAPTER V CONCLUSION ........................................................................ 14 REFERENCES ................................................................................................... 15 APPENDIX A: LAW FOR THE DEVELOPMENT OF THE CULTURAL AND CREATIVE INDUSTRIES ........................................................... 17 APPENDIX B: INDUSTRY SUBSECTORS AND GOVERNMENT MINISTRIES .......................................................................................... 23. v.

(5) LIST OF TABLES. Table 2.1: Annual Business Growth ..........................................................................................3 Table 2.2: Annual Export Growth .............................................................................................3. vi.

(6) CHAPTER I. INTRODUCTION TO THE CULTURAL AND CREATIVE INDUSTRIES. “You can’t use up creativity. The more you use, the more you have.” Acclaimed American poet and writer Maya Angelou pointed to the infinite nature of creativity, in how it powers itself and fosters new ideas, as long as the agents of action persist at it. This is the heart of the “cultural and creative industries,” which UNESCO (United Nations Educational, Scientific and Cultural Organization), part of the most essential global intergovernmental organization, defines as “sectors of organised activity whose principal purpose is the production or reproduction, promotion, distribution and/or commercialisation of goods, services and activities of a cultural, artistic or heritage-related nature.” Producing art is important in itself from an aesthetic standpoint but a human still needs to belong to an industry to make money to survive! Cultural and creative industries worldwide generate a total of USD 2.25 billion in revenues and 29.5 million jobs worldwide, with revenues exceeding those of the telecom services industries and even surpassing India’s GDP of USD 1.9 billion. It is a driver of the digital economy, as it provides the goods for sale, for example, through television and movie sales on digital platforms. These industries also boost cities’ attractiveness, as new developments, such as museums and urban developments, may help a city create a new brand image and draw tourists (EY, 2015).. 1.

(7) CHAPTER II LITERATURE REVIEW While the UNESCO web site does not currently have a current classification of what sectors cultural and creative industries consist, EY’s report delineates 11 sectors: advertising, architecture, books, gaming, music, movies, newspapers and magazines, performing arts, radio, TV, and visual arts. The report also states that the top revenue-driving sectors are television, visual arts, and newspapers and magazines. Across the five defined market regions of Asia-Pacific, Europe, North America, Latin America, and Africa and the Middle East, the Asia-Pacific is the largest market, generating USD 743 million of revenue (33% of global revenue) and 12.7 million jobs (43% of worldwide jobs).. The State of Taiwan’s Cultural and Creative Industries This research will focus on Taiwan, one of the countries within the burgeoning AsiaPacific market. Taiwan’s cultural and creative industries are defined as “those industries that have their origins in innovation or cultural accretion, and which have the potential to create wealth or create jobs through the production and utilization of intellectual property, and which can help to enhance the living environment for society as a whole” (Small and Medium Enterprise Administration [SMEA], 2004). Thus, these industries are inherently defined as having a positive influence on society both economically and environmentally. Unfortunately, literature in English on Taiwan’s cultural and creative industries’ early development is not readily available; yet in tandem with China’s establishment of the industries in the current millennium, Taiwan’s data is more accessible. In Taiwan’s Ministry of Culture’s latest annual report on the cultural and creative industries in year 2016, the total number of industry companies was 63,339, a growth of 0.72% over the previous year, generating total sales revenue of TWD 807.25 billion, 88.53% domestic and 11.47% overseas. This revenue contributed 4.72% of the nation’s total nominal GDP, while industry employment comprised 2.25% of Taiwan’s total employment. While these numbers are not large, a U.K. study noted in the report proposes that “the overall economic contribution of Cultural and Creative Industries is 2.64 times of their direct production value…the total number of jobs generated is thus 2.44 times that of the actual employment within the industries themselves.” The report also shows that most companies (84.58%) are considered micro-enterprises, producing less than TWD 5 million. This indicates that many are considered SMEs (Small and Medium Enterprises) and may require assistance from Taiwan’s. 2.

(8) Small and Medium Enterprise Administration in order to succeed. Furthermore, 30.05% have been in existence for 5 years or less, meaning that they are relatively young and need support mechanisms to continue to exist and grow. The cultural and creative industries in Taiwan, as of late, are experiencing a slowdown with 0.46% revenue growth in 2015 and 3.42% decline in 2016, indicating that more government backing is necessary. The Taiwanese government uses the U.K.’s industries as a global benchmark, stating that it has “the most highly developed cultural and creative industry of any country in the world” (Ministry of Culture, 2017b), and South Korea as a regional benchmark for its developmental ambitions and impact on Taiwanese industry. The annual growth data from these countries has a one-year lag, only including data from 2011-2015, as opposed to 2016. Since each country also has a different currency, growth rate percentages are used as a point of comparison.. Table 2.1. Annual Business Growth 2011 Taiwan U.K. 6.46% Korea 13.16%. 2012 -2.91% 5.24% 5.19%. 2013 2.54% 6.64% 4.51%. 2014 2.29% 4.80% 4.10%. 2015 0.46% 7.01% 5.83%. 2016 -3.42% N/A N/A. 5-year CAGR 1.01% 4.71% 4.91%. The data shows that Taiwan’s growth is slower than each of the benchmark countries’; even in 2015, as Taiwan’s growth only slowed to 0.46% over 2014, the other benchmark countries experienced even more rapid growth. The 5-year CAGR (Compound Annual Growth Rate) for Taiwan from 2011-2016 is only 1.01%, as opposed to 4.71% in the U.K. and 4.91% in South Korea. This also indicates that Taiwan has opportunity for growth and can look to these benchmark countries as models for promotion of the cultural and creative industries.. Table 2.2.. Annual Export Growth 2012 Taiwan -25.96% U.K. 11.32% Korea 7.19%. 2013 -8.59% 3.47% 6.76%. 2014 5.53% 10.94% 7.12%. 2015 -0.50% 7.19% 7.35%. 2011-2015 CAGR 1.01% 8.18% 7.11%. 3.

(9) In terms of annual export growth, Taiwan is learning from its past and beginning to export more of its goods again, with a positive CAGR of 1.01% from the period of 2011 to 2015, while the U.K. and Korea both have positive annual export growth at 8.18% and 7.11% CAGR over the same time period. Most interesting to note is the negative export growth experienced in years 2012 and 2013, which may be attributed to the European economic crisis leading to less demand of Taiwanese exports. Nevertheless, if Taiwan is to become a key export power in the Asia-Pacific region, Korea may be an example to follow.. Note. Adapted from “2017 Cultural and Creative Industries Development Annual Report,” by Ministry of Culture. 2017. Retrieved from https://stat.moc.gov.tw/Research.aspx?type=5.. 4.

(10) Specifics of Taiwan’s Cultural and Creative Industries Administration The supervision for these industries is mainly divided between two ministries within the Executive Yuan (executive branch of Taiwan), the Ministry of Economic Affairs and Ministry of Culture, depending on the specific segment. Of specific note is that the Small and Medium Enterprise Administration is housed within the Ministry of Economic Affairs, which means that many businesses in the cultural and creative industries will need to cooperate and deal with multiple governmental bodies for funding and support. Each ministry has its own specific policies and grants, the latter of which companies must adhere to strict guidelines and criteria in order to receive funding.. Regulations From the Ministry of Culture’s website, there are a host of initiatives and regulations that support the cultural and creative industries, including the “Law for the Development of the Cultural and Creative Industries” in 2010 (Appendix A), “Strengthening Investment in Cultural and Creative Industries Trust and Investment Management Plan” in 2011, which uses “a private-public cooperative administered company to implement source-case development, investment estimates, investment examination, post-investment management and other business services,” as well as bank funding and ministry-subsidized loans. As part of the “Law for the Development of the Cultural and Creative Industries,” the Ministry of Culture had originally planned to develop a “Cultural and Creative Industries Development Research Institute” to address the needs of the industries, but, as of March 3 of this year, will instead develop the “Cultural Content Institute” to address issues of collaboration between the government and private sectors as well as between industries, so that the cultural and creative industries can work more effectively with manufacturing, technology, and science industries. A total of TWD 6 billion is earmarked for this endeavor under the new “Cultural Content Investment Project,” by the National Development Fund, while the Ministry of Culture has already earmarked another TWD 4 billion under the existing “Cultural and Creative Investment Program,” totaling TWD 10 billion to revitalize the cultural and creative industries. The goal is to encourage economic growth, especially through exports, so as to create external awareness of Taiwan’s cultural characteristics.. 5.

(11) Promotion Spaces Examples of locations where cultural and creative industries have promotion space as a manifestation of these policies are Taiwan’s “Cultural and Creative Parks,” which are “Taiwan's answers to Los Angeles' Third Street Promenade and Shanghai's Tianzhifang,” with their “provision of exhibition spaces, creative store fronts, rehearsal rooms, performance venues, workshops, and indoor theaters” (Ministry of Culture). These five national-level parks are Huashan (northern Taiwan), Taichung (central Taiwan), Hualien (eastern Taiwan), Chiayi (western Taiwan), and Tainan (southern Taiwan).. Subsectors The fifteen subsectors of the cultural and creative industries, as defined by the government, include: 1) Visual arts 2) Music and performing arts 3) Cultural asset applications and performance/exhibition facilities 4) Handicrafts 5) Film 6) Broadcasting/television 7) Publishing 8) Popular music and cultural content 9) Advertising 10) Product design 11) Visual communication design 12) Branding and fashion design 13) Architectural design 14) Creative lifestyle 15) Digital content. 6.

(12) CHAPTER III MOTIVATION/ RESEARCH METHODOLOGY The author’s interest in the cultural and creative industries in Taiwan stems from his current employment at a brand design and consultancy firm, TotalBrand+TotalDesign, supervising English copywriting and translation duties. His work experience encompasses over two years as of publication date. Through his experience at this company, he has seen the company’s collaboration with other companies from various industries, including manufacturing, hospitality, and even fashion, and wants to more deeply explore what processes and resources TotalBrand+TotalDesign employs for successful partnership. Thus, this paper will investigate the concepts of “partnership” and “collaboration” in the cultural and creative industries, specifically in Taiwan. As small- and medium-sized companies in this sphere pursue growth in size and revenue, pursuing projects with other companies will increase experience and enhance visibility. Consequently, this requires “partnership,” which refers to having two or more parties sharing management responsibilities and profits in business operations. “Collaboration,” however, is a more difficult concept to define, with varying ideas as to what it really means. However, the definition provided by former SVP of Cisco, Carlos Dominguez, is quite comprehensive: “Collaboration is highly diversified teams working together inside and outside a company with the purpose to create value by improving innovation, customer relationships and efficiency while leveraging technology for effective interactions in the virtual and physical space” (2011). His definition focuses on the resulting value that arises from collaboration, including one key concept that is often highlighted this day and age, that of innovation. In understanding how cultural and creative industries in Taiwan function, the author will look at both quantitative and qualitative data. Quantitative data will be governmentprovided data on the growth and revenue produced by the cultural and creative industries in Taiwan. The author will use also use government-provided qualitative data to understand how the government funds companies as well as gives them opportunities to showcase their work. Specific examples from the real world will also supplement the qualitative data. These examples include Liuli Gongfang, a homegrown artistic glassware company that has expanded quickly into the international stage through its collaborative efforts, bringing Taiwan’s name into public view. Furthermore, he will interview industry participants and. 7.

(13) business owners to see how collaboration is fundamental to goal realization. Questions will include the nature and scope of the business, current collaborative projects, and future plans for growth and development. This will include efforts between small business owner Andre Chen’s design studio and specific marketing channels, as well as those between the researcher’s firm, TotalBrand+Total Design, and HYC (Hsin Yong Chien, Ltd.), with the goal to comprehend how firms utilize resources for successful results.. 8.

(14) CHAPTER IV PARTNERSHIP AND COLLABORATION IN ACTION Case Study: Liuli Gongfang An example of a Taiwanese company that has experienced international fame is Liuli Gongfang, Taiwan’s only producer of contemporary artistic glassware. Co-founded in 1987 in Tamsui by former actress Loretta Hui-shan Yang and director Chang Yi, who themselves crossed over the film industry into this sector of handicrafts, their goal was to revive the ancient Chinese art of glassmaking through the French lost-wax casting technique (also known as pâte-de-verre or cire-perdue). Their success stems from four factors: production, marketing, human resources and strategies. This paper will focus specifically on the factors of marketing and strategies for study. The above two factors are about collaboration. In regards to marketing, not only did Liuli Gongfang brand themselves as “artistic glassware,” present themselves as distinctly “Chinese,” and only produce in limited editions so as to create a sense of exclusivity about their products, they also chose to place their products in different distribution channels worldwide, so they could export almost immediately and thus create global recognition. While its first exhibition was in 1990 in the local Eslite art gallery, Liuli, soon after in 1992, had its first international exhibition at the Mitsukoshi Art Gallery in Tokyo’s Ginza district and has now expanded to 70 galleries across the world. It also owes its success to being seen as works of art, as museums and exhibitions have acquired and displayed their glassware; Liuli’s work has further had the honor of being gifts given to world leaders and to guests at the Academy Awards and Grammy Awards, thus bridging the gap between handicrafts and the film and music industries. These honors have resulted in Taiwanese glassware having a name for itself on the international stage. Liuli’s cross-industry collaboration does not stop at its marketing channels but also includes its successful expansion into architecture, interior design, and lifestyle products. Liuli was intelligent in understanding that glassware needs to have proper placement to be a marketable product and combines well with other elements; thus, collaboration with other businesses and industries was instrumental for future development. In 2001, it went international again and opened the TMSK Restaurant in Shanghai’s Xintiandi shopping center, using glassware for all of its interior furnishings and featuring a glass lotus pond, glass lamps, and a glass-embellished dome (SMEA, 2004). Due to its success, Taipei now 9.

(15) also has its own restaurant, modeled after the original design. This demonstrates that working with other unforeseen industries is critical to future success both external and internal to a business’ own home country.. Case Study: Essence Idea Studio Andre Chen is a Taiwan native and graduate of the Parsons School of Design in New York City. He set up his design studio and workspace, Essence Idea Studio, in 2013 and subsequently established his own brand of home décor and lifestyle products, DeLightful Time Home Décor, in 2014. Since then he has collaborated with museums and retail stores to both market his products as well as, more importantly, produce products for their sales channels that reflect current needs and demands. One important business he has partnered with is Eslite, whose founder, Robert Wu, is touted by the Ministry of Culture as a “cultural maestro” for its impact on the culture of reading in Taiwan (Ministry of Culture, 2017a); CNN has also highlighted its impact on culture and creativity, in addition to its lifestyle products, as one of the world’s best department stores (Wong, 2017). Chen indicated that Eslite has a very strict filtering process in selecting products for sale in requiring potential partners to first submit proposals that are then reviewed by an internal committee, who subsequently approves the “best” products for their marketing channels (personal communication, September 24, 2018). This demonstrates that Eslite concerns themselves with not just quantity but quality. Chen also points out that collaboration in producing for the consumer market changes rapidly according to demands. While his business began with designing dinnerware and home furnishing sets, he has more recently partnered with other businesses to produce items such as umbrellas and jewelry. While products such as these are commonly found, demands from partners for his studio to produce new designs also indicate that the marketplace can support more development and inventive products. This shows the definition of collaboration requiring successful innovation of products and improvement of customer relationships. In the future, Chen suggests that in-store marketing channels are not the only place for design companies such as his to sell his products. As expected, he believes that online platforms are the future and finding the appropriate partners in overseas markets such as China will allow businesses in Taiwan like his to expand and influence the creative environment with new ideas.. 10.

(16) Case Study: TotalBrand+TotalDesign with HYC. TotalBrand+TotalDesign Company Profile TotalBrand+TotalDesign was founded in Taipei in 1988 by Jane Wu as a brand consultancy firm that manages all aspects of branding for its clients, from researching and establishing a brand identity, to designing materials that reflect this new identity. As a comprehensive services firm, its client list includes companies and organizations from both the private sector, such as Giant and ASE Group, and the government sector, including the Industrial Development Bureau of the Ministry of Economic Affairs and National Palace Museum. TotalBrand+TotalDesign distinguishes itself from other design firms not only from the quality of its design work but also in its innovative brand management practices. It works with organizations to develop its strategies, which, surprisingly, are often unclear or not explicitly stated. This may include elements such as the organization’s mission, vision, and core values, which are the roots and foundation for a company to branch off upwards towards future growth.. HYC Company Profile Hsin Yung Chien Co., Ltd. (HYC) was established in 1964 in Nantou as a manufacturer of rubber conveyor belts, growing to become Taiwan’s largest producer and consequently naming its top product as “King.” Since 2009, it has expanded its product line to include “Sileet,” a high-polymer material used in products such as solar panels, and “Newsheet,” a composite material for products such as watch straps and automotive interior parts. Its expansion goals are to use its newer product lines to supply companies with foundational material to develop their own products while using environmentally friendly and safe processes.. Support Mechanisms To support design firms such as TotalBrand+TotalDesign from producing exceptional work, some of whom represent Taiwan on a global level using the moniker MIT (Made in Taiwan), the Taiwan government established the not-for-profit Taiwan Design Center (TDC) in 2003. Its integrated design services platform also helps companies to develop their brands, add value, and prepare them for exhibition and international exchanges. It not only uses. 11.

(17) Songshan Cultural and Creative Park as a base for exhibition but also is responsible for both the Taiwan Design Expo and Creative Expo Taiwan. The former is an annual design exhibition in Taiwan funded by the Ministry of Economic Affairs that seeks host submissions from local governments and then collaborates with local designers to display their unique works to the public. The latter is conversely sponsored by the Ministry of Culture but speaks to specific themes in the design world, with this year’s theme being “Design Thinking/Thinking Design”; it “bridges the gaps between production, sales and distribution” and speaks to current trends and values to increase Taiwanese design competitiveness and position itself as an important player in the global market (Taiwan Design Center). The government also provides various funding mechanisms that organizations may apply for, depending on their industry and specific needs. The majority of the programs for the cultural and creative industries are sponsored by the Industrial Development Bureau of the Ministry of Economic Affairs; for brand development, the only one is called “Branding Taiwan.” This program targets Taiwanese organizations, who manage and own a brand, that are interested in expanding globally and are considered members of an industry supervised by the Ministry of Economic Affairs. To encourage organizations that have been thinking globally, they must have clients/sales areas/substantial presence in two areas outside of Taiwan or brand revenue of at least 20% of their total revenue. If awarded, the program consists of a maximum TWD 1,500,000, of which a recipient must pay for at least 50%, leading to a maximum sponsorship of TWD 750,000. Applicants apply between March and April of the current year and are notified in May; they have until December to complete their action plans (SMEA, 2004).. Method of Collaboration HYC first contacted TotalBrand to refresh its brand image and further develop its identity and strategy. TotalBrand, having experience in grant applications and as part of their comprehensive services, as well as being noted as one of the campaign’s key advisory firms, assisted HYC in applying for the Branding Taiwan plan and was accepted. Much of this success may partly be due to HYC’s reputation as the leading manufacturer of rubber conveyor belts, according to TotalBrand+Total Design CEO Jane Wu (personal communication, August 8, 2018). Thus, additional government-supported funding was available for the partnership between the two companies.. 12.

(18) When TotalBrand collaborates with new clients, it uses a “Consensus-Building Camp,” which is a two- to three-day gathering of key company employees to first discover their thoughts about and experience in the company, then move to discuss, plan, and agree on the company’s future strategies, so that the employees have personal ownership in their company’s development. Activities include an icebreaker, where employees write their nicknames and years of experience, and workshops, where they discuss specific words and concepts and vote on the most relevant ones for the company, thus understand employees’ most essential values. As a result of this “camp,” TotalBrand was able to more thoroughly understand the history of HYC and develop an action plan for its client. More critically, TotalBrand was able to assist HYC in establishing core values as well as solidifying its vision, mission, target customers, and positioning statement, the last two of which were split between its “King” and “NewSheet” products, to provide specific focus by product line. Having these in place allows HYC to have future direction and will position HYC more as a global company. Their collaboration required the typical face-to-face meetings, phone calls, and follow-up e-mails. Wu and Planning Manager Darren Chou worked directly with HYC to develop its brand identity, while designers assigned to the project worked on specific logos and graphics. They first developed a report based on the results of the consensus camp and then finally delivered a handbook that included all of these elements of the refreshed brand identity. This handbook focuses on the meaning behind their brand logo, which even includes the color palette and font. As a positive outcome of their collaboration, TotalBrand is currently helping HYC partner with other supplier firms to develop new products not yet released to market. As of publication, one such product is still not copyrighted and still in the branding phase. Yet this case study clearly shows that companies from the design industry can even work closely with the manufacturing industry in a successful partnership, for not only the present but the future.. 13.

(19) CHAPTER V. CONCLUSION. Taiwan’s cultural and creative industries are slowly emerging on the global stage. As companies and organizations from these industries continue to collaborate across subsectors and other industries, they will be able to innovate and create new products. The whole is greater than the sum of its parts; thus, successful collaboration will create a synergistic effect. As the capital city of Taipei was most recently recognized in 2016 as a “World Design Capital” for its creative progress and capitalized on its theme of “Adaptive City – Design in Motion” in hosting numerous events, it also identified that it has limited resources in terms of space and funding. This is a concern across the entire nation, as anyone engaged in the cultural and creative industries cannot dwell on what little they may have but must compete and strive for excellence against others. One issue that Taiwan thus faces in developing its industries is access to capital. With low GDP growth in recent years, as compared to double-digit growth in the 1960s and 70s, and a stagnant wage level, individuals and organizations fight over pieces from a small pie. In the funding handbook provided by the Ministry of Economic Affairs, only 22 programs were available for organizations in the cultural and creative industries to apply for. Programs are competitive, with only 63,339 total businesses, as of 2016. In addition, Taiwan is geographically and politically isolated. Being an island nation makes it difficult for cultural exchanges to occur unless traveling by air, which may incur additional costs for both inbound and outbound travelers. One cannot also deny the political influence of China, as it has forced other nations to refuse Taiwan a place at the international diplomacy table, for example, in the United Nations, and this thus limits participation and opportunities for Taiwan to be recognized and subsequently interact with other countries. However, Chen and Liuli both show that expanding into other distribution and promotional channels is key for global success, while the TotalBrand and HYC partnership shows that collaboration across disparate industries is possible for a company to reinvent its brand image and update product offerings. Thus, members of the cultural and creative industries should not merely strive to create and innovate on their own but must also look to synergistic relationships to grow their companies and stretch their creative minds. These case studies show that businesses must look both outward and inward in future endeavors to prosper.. 14.

(20) References Branding Taiwan. Retrieved from https://www.branding-taiwan.tw/about/intro Creative Industries. Retrieved from http://www.unesco.org/new/en/santiago/culture/creativeindustries/ DeLightful Time Home Decor. (2014, December 12). In Facebook [Business page]. Retrieved from https://www.facebook.com/deLightfulTime/ Dominguez, C. (2011, February 9). Collaboration: what does it really mean? [Blog post]. Retrieved from https://blogs.cisco.com/news/collaboration-what-does-it-really-mean Essence Idea Studio. (2013, January 1). In Facebook [Business page]. Retrieved from https://www.facebook.com/EssenceIdeaStudio/ EY. (2015, December). Cultural times: the first global map of cultural and creative industries. Retrieved from https://www.ey.com/Publication/.../ey-cultural-times-2015/.../eycultural-times-2015.pdf HYC. Retrieved from https://www.hyc-king.com/en/index/index.html Law for the Development of the Cultural and Creative Industries. Retrieved from http://law.moc.gov.tw/law/EngLawContent.aspx?lan=E&id=8 Ch Liu, P. (2015, December 14). Cultural and creative businesses thriving in Taiwan. Taiwan Business Topics. Retrieved from https://topics.amcham.com.tw/2015/12/cultural-andcreative-businesses-thriving-in-taiwan/ Liuli Gongfang. Retrieved from http://www.liuli.com/en-us/introduction.aspx Ministry of Culture. Retrieved from http://english.moc.gov.tw/ _____. (2017, July 25). “Bookstore Founder | Robert Ching-yu Wu.” Retrieved from https://english.moc.gov.tw/information_224_77005.html _____. 2017 Cultural and Creative Industries Development Annual Report. Retrieved from https://stat.moc.gov.tw/Research.aspx?type=5 Ministry of Economic Affairs. (2018, January). Functional category programs joint briefing and MIT quality products exhibition. Paper presented in Taiwan. Ministry of Foreign Affairs. (2018, March 8). MOC commits US$341.6 million to promoting Taiwan’s cultural and creative industry. Retrieved from https://taiwantoday.tw/news.php?unit=6&post=130585 Small and Medium Enterprise Administration. (2004, September). White paper on small and medium enterprises in Taiwan, 2004. Retrieved from https://www.moeasmea.gov.tw/ct.asp?xItem=353&ctNode=307&mp=2. 15.

(21) Taiwan Design Center. Retrieved from http://www.tdc.org.tw/?lang=en TotalBrand+TotalDesign. Retrieved from http://www.totaldesign.com.tw/ Wong, M.H. (2017, April 6). The best classic department stores around the world. CNN. Retrieved from https://edition.cnn.com/travel/article/best-departmentstores/index.html. 16.

(22) APPENDIX A: LAW FOR THE DEVELOPMENT OF THE CULTURAL AND CREATIVE INDUSTRIES Chapter 1 General Principle Article 1 This Act is enacted to foster the development of Cultural and Creative Industries, to establish a social environment with abundant culture and creativity, to utilize the technology and create researches and developments, to strengthen talent cultivation of the Cultural and Creative Industries, and to actively exploit the domestic and overseas market. The development of Cultural and Creative Industries shall proceed pursuant to the provisions in this Act. If there exists more favorable provisions than the content of this Act, the said provisions shall apply. Article 2 To promote the Cultural and Creative Industries, the Government shall strengthen artistic creation and cultural preservation, reinforce the combination of culture and technology, emphasize on a balance development between cities, counties and regions, value local characteristics, elevate the citizens’ capacity for cultural appreciation, and enhance the popularity of cultural art so to comply with the international trends. Article 3 The “Cultural and Creative Industries” referred to in this Act means the following industries that originate from creativity or accumulation of culture which through the formation and application of intellectual properties, possess potential capacities to create wealth and job opportunities, enhance the citizens’ capacity for arts, and elevate the citizens’ living environment: 1. Visual art industry 2. Music and performance art industry 3. Cultural assets application and exhibition and performance facility industry 4. Handicrafts industry 5. Film industry 6. Radio and television broadcast industry 7. Publication industry 8. Advertisement industry 9. Product design industry 10. Visual communication design industry 11. Designer fashion industry 12. Architecture design industry 13. Digital content industry 14. Creativity living industry 15. Popular music and cultural content industry 16. Other industries as designated by the central Competent Authority. The content and scope of the industries in the preceding paragraph are to be stipulated by the central Competent Authority in consultation with the central relevant competent authorities. Article 4 The “Cultural and Creative Enterprise” referred to in this Act means a legal entity, partnership, sole proprietorship or individual engaging in Cultural and Creative Industries. Article 5 The “Competent Authority” referred to in this Act refers to the Council for Cultural Affairs of the Executive Yuan in the central government, the municipality government in municipalities, and county government in counties. 17.

(23) Article 6 The central Competent Authority shall formulate a development policy for Cultural and Creative Industries and review and revise the policy every four years for the Executive Yuan’ approval so as to be the policy basis to promote the development of Cultural and Creative Industries. The central Competent Authority shall, in conjunction with the central authority in charge of the end enterprise concerned, establish a statistical scheme on the Cultural and Creative Industries and publish annual report on Cultural and Creative Industries every year. Article 7 To promote the development of the cultural and creative industry, the Government shall contribute to establish the Cultural and Creative Industry Development and Research Institute. The establishment rule thereof is to be stipulated otherwise. Article 8 The Government shall endeavor to develop Cultural and Creative Industries, and secure the relevant and necessary funds. Article 9 Certain portion of the National Development Fund shall be withdrawn to invest in Cultural and Creative Industries. The regulations governing the review and approval of the investment in the preceding paragraph, withdrawal scheme, achievement index and the relevant matters are to be stipulated by the central Competent Authority in conjunction with the authority in charge of the end enterprise concerned. Article 10 The Government shall promote the concept that cultural creativity is valuable fully exploit and utilize cultural and creative assets, and further implement the related policies. When the economic utility of the expenditures spent by the Government on tangible or intangible cultural and creative assets exceeds two years, the amount of that expenditure shall be earmarked as an expense budget of capital items. Each central authority in charge of the end enterprise concerned shall stipulate varieties of incentive or measures of assistance to support public and private companies along with Cultural and Creative Enterprises, and to convert creative works and cultural and creative assets to actual production or application. Article 11 To nurture cultural and creative enterprise talents, the Government shall fully exploit and exercise the human resource of cultural creativities, integrate varieties of teaching and research resource, and encourage Cultural and Creative Industries to proceed with cooperation on research and talent cultivation between industries, government and academia. The Government may assist local governments, colleges and Cultural and Creative Enterprises to enrich cultural and creative talents, encourage the establishment of relevant developmental facility in respect of Cultural and Creative Industries, establish related courses, or proceed with creative experiments, creations, exhibitions and performances. Chapter 2 Assistance, Reward and Subsidy scheme Article 12 The Competent Authority and the central authority in charge of the end enterprise concerned may provide Cultural and Creative Enterprises with suitable assistances, rewards or subsidies in respect of: 1. Formation of legal entity and relevant tax statement registration 2. Creation or research and development of products or services. 18.

(24) 3. Entrepreneurship and incubation 4. Improvements on agency system in the Cultural and Creative Industry 5. Circulation and application of intangible assets 6. Upgrade of operation and management capacity 7. Application of information technology 8. Cultivation of professional talents and recruitment of international talents 9. Enhancement of investment and commercial participants 10. Collaborative cooperation of enterprises 11. Expansion of markets 12. International cooperation and communication 13. Participation in domestic and overseas competition 14. Industry cluster 15. Utilization of public real estates 16. Collection of industry and market information 17. Promotion and dissemination of fine cultural and creative products or services 18. Protection and application of intellectual property rights 19. Assistance of reviving cultural and creative products and services 20. Other promotional matters on enhancing the development of Cultural and Creative Industries. The regulations regarding the subject, qualification, application scope, application procedure, review standard, revocation, abolishment of subsidy and other relevant matters of the assistances, rewards or subsidies indicated in the preceding paragraph are to be stipulated by the central authorities in charge of end enterprises concerned. Article 13 To elevate the citizens’ capacity for art and cultivate the popularities of cultural and creative activities, the Government shall provide schools which are below the senior high school level with artistic and cultural creativity appreciation courses and arrange for relevant educational activities. Article 14 To promote the consumption habits relating to arts and invigorate the Cultural and Creative Industries, the central Competent Authority may earmark budgets to subsidize students viewing and appreciation of artistic and cultural exhibition and performance, and issue and distribute tickets to artistic and cultural experience events. The target of the aforementioned subsidy and ticket distribution and the implementation regulations thereof are to be stipulated by the central Competent Authority. Article 15 The Government shall encourage the Cultural and Creative Enterprises to provide original products or services at favorable prices so to develop domestic Cultural and Creative Industries, and the price difference between the original price and the favored one are to be subsidized by the central Competent Authority. The identification and subsidy regulations regarding the original products or services scope in the preceding paragraph are to be stipulated by the central Competent Authority. Article 16 The central authorities in charge of the end enterprises concerned may reward or subsidy the public to provide suitable space, set up each kind of creation, incubation and exhibition and performance facility for usage by the Cultural and Creative Enterprises. The reward or subsidy regulations in the preceding paragraph are to be stipulated by the central authorities in charge of the end enterprises concerned. Article 17 When the Government procures cultural and creative products or services via the. 19.

(25) method of public selection, the creativity and arts of the cultural and creative products or services may be included as part of the evaluation factors. Article 18 The competent authorities in charge of the stations or the relevant facilities of public transportation systems shall preserve certain percentage of advertisement space at the said stations or on the relevant facilities as priority space for cultural and creative products or services. The advertisement space shall be offered at a favorable price. The percentage and usage fee thereof are to be stipulated by the Competent Authority. Article 19 The central Competent Authority shall coordinate with the related governmental departments, financial institutions, and credit guarantee institutions to establish an investment, loan, and credit guarantee scheme for the Cultural and Creative Enterprises, and shall provide favorable measures to induce the infusion of private funds to support those Cultural and Creative Enterprises in various operational stages to acquire their needed funds. The Government shall encourage business enterprises to invest in Cultural and Creative Industries so to facilitate the cross-field communication in the areas of operation strategy and management experience. Article 20 To encourage Cultural and Creative Enterprises to establish their own brands and actively cultivate the international markets, the central relevant competent authorities in charge of end enterprises concerned may coordinate with each of their overseas offices to assist the Cultural and Creative Enterprises in establishing international brand image, attending reputable international exhibitions and performances, competitions, expositions, cultural arts festivals, etc., expanding the related international markets, and promoting sales. Article 21 To foster the development of Cultural and Creative Industries, the Government may provide public cultural and creative assets that are under the custody and management of the Government, and such assets may include books, historical documentations, preserved cultural and historical relics or video and radio information, by leasing, authorizing or through other measures so long as it does not violate the relevant regulations on intellectual property right. The management authority that provides the public cultural and creative assets in accordance with the preceding paragraph shall create an inventory list on assets that are being provided to the public, and shall publicize the said inventory information in a suitable manner. The management authority may preserve a portion of the benefits gained through its compliance with the first paragraph and spend it on management maintenance, technology research and development, and talent cultivation. Such expenditures are exempted from the restriction set forth in Article 7 of National Property Act and local government regulations on public property management. If public cultural and creative assets are utilized for non-profit purpose, the management authority may provide the user with favorable prices. The regulations or municipal rules regarding the lease, authorization, benefit preservation and other relevant matters of public cultural and creative assets are to be stipulated by the central authorities in charge of the end enterprises concerned, municipality or county(city) competent authorities. Article 22 To assist in securing locations for cultivating and supporting artistic creators and their exhibition and performance, and when the required real estate is publicly owned but not for public use, such real estate may be directly leased by the management authority in charge after the approval of the relevant competent authorities in charge of the end enterprises concerned. Such lease is to be exempted from the restriction stipulated in Article 42. 20.

(26) of National Property Act and local government regulations on leasing methods of public property management. Article 23 For a pledge on copyright originated from the Cultural and Creative Industries, the establishment, transfer, alteration, extinguishment or disposition restriction on that pledge may be registered with the copyright competent authority. If the pledge is not registered, such pledge will not be a valid defense against any bonfires third party. The foregoing provision will not apply if the pledge is extinguished by reason of a merger, or is extinguished by the extinguishment of the copyright or the guaranteed credit right. Any person may apply to review the preceding content registered. The registration regulation in the preceding first paragraph and the review regulation in the preceding second paragraph are to be stipulated by the Competent Authority under the Copyright Act. The copyright competent authority may appoint private institutions or groups to deal with the matters stipulated in the preceding first and second paragraphs. Article 24 If a copyright user uses its best effort but fails to obtain a valid authorization from the copyright owner due to either the identity or the location of the copyright owner being unknown, the user shall clarify the reason for its failure to obtain such valid authorization to the copyright competent authority. After the completion of an investigation conducted by the copyright competent authority and if as a result of the investigation the user has obtained the permission and authorization from the copyright competent authority, the user may utilize the work within the permitted scope if it has withdrawn the amount needed for usage remuneration. The copyright competent authority shall pronounce the authorization permission in the preceding paragraph with suitable method and publish it on the government report. The usage remuneration amount in the first paragraph shall be commensurate with the freely negotiated amount of reasonable and payable usage remuneration for a general work. A replica of cultural and creative products which is made by obtaining the authorization and permission in accordance with the first paragraph shall indicate the permission date, number and the qualification and scope of the permissible usage issued by the copyright competent authority. The regulations regarding the application of permission and calculation method of usage remuneration in the first paragraph and other matters which shall be complied with are to be stipulated by the Competent Authority under the Copyright Act. After obtaining the permitted authorization based on the first paragraph, if any inaccuracy on the application is found, the copyright competent authority shall revoke the permission. After obtaining the permitted authorization based on the first paragraph, if the user fails to utilize the work incompliance with the methods permitted by the copyright competent authority, the copyright competent authority shall rescind the permission. Article 25 The Government shall support in the establishment of cultural and creative villages, and shall as a priority assist core creative and independent workers to situate in the said villages. The Government shall, through the clustering effect by involving different groups, further promote the development of Cultural and Creative Enterprises. Chapter 3 Tax Incentives Article 26 If a profit-seeking enterprise contributes and donates for the reasons stipulated in the following and in an amount that is below NTD 10,000,000 or ten percent of the amount of its income, such contribution and donation may be considered as expenses or losses of the. 21.

(27) year of payment that are exempted from the restriction in Sub-paragraph 2 of Article 36 of Income Tax Act: 1. Purchasing products or services originated by domestic Cultural and Creative Enterprises, and donating to the students or minority groups through schools, departments or other groups. 2. Cultural and creative activities held in distant regions. 3. Donating Cultural and Creative Enterprises to establish an incubation center. 4. Other matters identified by the central Competent Authority The implementation regulations in the preceding paragraph will be stipulated by the central Competent Authority and the central authorities in charge of the end enterprises concerned. Article 27 To enhance the creativity of Cultural and Creative Industries, companies may deduct or exempt from the payable tax by reason of their investment expense in research and development of cultural creativity and talent cultivation in accordance with relevant tax acts or other regulations. Article 28 If the machinery and equipment imported from abroad by a cultural and creative enterprise for its own use are not currently manufactured by local manufacturers as specifically verified by the Ministry of Economic Affairs, they shall be exempted from import duties. Chapter 4 Appended Provisions Article 29 The enforcement rules of this Act are to be stipulated by the central Competent Authority. Article 30 The effective date of this Act is to be stipulated by the Executive Yuan otherwise.. 22.

(28) APPENDIX B: INDUSTRY SUBSECTORS AND GOVERNMENT MINISTRIES. 23.

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