HEADLINE writers are great perpetuators of stereotypes. When heralding the
arrival this month in Australia of the first high technology trade delegation
from Taiwan, the computer section of The Australian trumpeted:
Taiwan IT giants plunder local multimedia expertise. IT giant I can accept.
Plunderers? I think not and certainly not when the IT links being forged between
Taiwan and Australia are examined.
Taiwan is indisputably an information technology giant. In 1995, the island
exported around A$25 billion worth of IT products. That makes Taiwan the
world鈥檚 third largest producer of information products, ranking behind only the
US and Japan.
Whereas Japan and Korea have giant companies, the overwhelming majority of
Taiwanese IT firms are pygmies鈥攕mall, family-owned outfits employing fewer
than 100 people. In fact, the average number of employees at the 16 companies
represented on the Taiwanese trade delegation to Australia was just 28. They
included Eten, Formac, Ritek, Wave-Team and Art.9 Entertainment. Not exactly
household names.
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Nor indeed are the names of their Australian counterparts鈥擜tomic Media,
ICE T Multimedia, mmpowered communications and Visual Purple, for example. These
were among some 30 firms which demonstrated their wares to the delegation at mini
expos organised by Austrade and the Australian Interactive Multimedia Industry
Association in Sydney and Melbourne.
The aim of the Taiwanese mission was to investigate Australia鈥檚 much-vaunted
prowess in multimedia. A hard term to define with any degree of precision,
multimedia still means for the most part CD-ROM based software.
The Taiwanese are well aware of the popularity of CD-ROMs. The island鈥檚 firms
expect that in 1996 they will produce 10 million CD-ROM drives for personal
computers. That makes these peripherals by far their fastest growing product
category.
At the same time, the Taiwanese also know better than anyone that survival in
the PC business is becoming increasingly difficult. Profit margins in
hardware鈥攚hich accounts for over 90 per cent of Taiwan鈥檚 IT
revenues鈥攁re already razor thin and getting thinner. That is why the
island鈥檚 firms are shifting their focus to multimedia software, especially
CD-ROM, which seems to offer greener pastures.
The problem, according to delegation leader Lydia Han, is that while Taiwan
has plenty of manpower in technical skills, it is short of creators and project
managers. The island currently imports more software than it exports. There are
also cultural barriers to success, says Joseph Chow of Art.9 Entertainment.
鈥淚t鈥檚 hard for a Taiwan-educated designer to design games that are enjoyable for
a Westerner,鈥� he says. Moreover, developing new multimedia titles takes a long
time.
鈥淲e are eager to look for software developers,鈥� says Chow, 鈥渁nd you have many
talented developers here.鈥� Another area of interest is training. Schools like
the Royal Melbourne Institute of Technology offer a wide range of courses in
multimedia skills such as animation, graphic design, programming and video
production.
Art.9 Entertainment is a newly-formed subsidiary of Umax, a leading maker of
optical scanners which is aggressively expanding into the software business. In
addition to capital investment, Umax can offer something else that Australian
developers desperately need鈥攕trong sales and distribution channels to
Asian markets.
And not just to Asian markets, either. When PC maker Acer began selling its
Aspire line of home computers in Australia last year, the company threw in a
dozen locally-produced CD-ROMs with each machine. The retail value of these
titles, according to John Thomas of Dataworks, the company which publishes them,
was around A$24 million.
Among Taiwanese firms, Acer is the exception that proves the rule. Now the
world鈥檚 sixth largest maker of PCs, with 1995 sales of over A$6 billion,
Acer has become a bona fide giant. As such, the company is eager to sell its
equipment to Australia鈥檚 largest IT user, the federal government. But in order
to win government procurement contracts, Acer has been obliged, like other
multinationals, to demonstrate its commitment to Australia by investing in local
firms.
Over the past couple of years, the Taiwanese firm has pumped A$1.7
million into Electra, a small Brisbane-based start-up. The company makes
personal computer based software for diagnosing control circuitry on cars with
electronic fuel injected engines. Known as Electrajet, the package enables even
mechanics at small garages to cope with the complexity of tuning and repairing
modern cars.
The Acer investment has helped to push Electra鈥檚 software from R&D to
commercialisation. 鈥淭he significance of the tie-up,鈥� says Electra manager Peter
Winnan, 鈥渋s that Acer is a very large company in the Asian market. They鈥檝e got a
lot of respect and a lot of infrastructure.鈥� The Australians hope to be able to
take advantage of that infrastructure鈥攊n particular, the Acer group鈥檚
manufacturing facilities and its worldwide network of 260 sales offices.
Involvement with Acer means that products will go international.
Acer鈥檚 sponsorship of Australian software extends beyond tokensim. Last
November, company founder and chairman Stan Shih came to Australia to open the
Acer Multimedia Centre in Brisbane. The new centre is intended to function as an
incubator for local innovators.
鈥淭here are a lot of clever ideas in Australia,鈥� says Richard Wong,
general manager of ACER Software in Australia, 鈥渂ut they鈥檙e just good ideas,
that鈥檚 all.鈥� Acer is providing premises, facilities and seed capital to help
turn ideas into products. To qualify for support, all an inventor has to do is
come up with an idea that is deemed to have commercial potential.
Wong, an Australian citizen, says that three or four projects are currently
underway at the Brisbane centre, and several others are being evaluated. With
all due respect to the headline writers, if this is plundering, then Australia
can do with a lot more of it.