Toward a Circular Economy: An Analysis of Innovation in Taiwanese Small- and Medium-Sized Enterprises

  • Shiang-Ruei HsuEmail author
  • Guo-Liang Chen
  • Tsai-Chi Kuo


According to the Global Competitiveness Report 2011–2012 published by the World Economic Forum, the economic development of Taiwan has been strongly supported by two pillars: innovation and quality. Taiwanese small- and medium-sized enterprises (SMEs) are renowned for their prowess in technological innovations. Moreover, the Asian Development Bank stated that the technological innovation is the most critical productivity driver in Taiwanese economic growth and estimated a boost of over 50% by the year 2030. The backbone of Taiwan’s competitiveness relies heavily on its flexible and fast-adaptive SMEs. The number of SMEs has reached a record level and accounted for 97.69% of all enterprises in Taiwan. As a result, innovation is not only a key factor in Taiwan’s future economic growth but also the determinant of success in all SMEs.

Facing the ever-changing global sustainability trends, Taiwanese government has established a high priority in revitalizing the economy and industry. Driven by innovation, research, and eco-design, circular economy is one of the key aspects of innovative industries. Hence, the ability to utilize eco-design of product and/or services as an essential carrier and integrate with circular economy concept to encourage collaboration of innovative capabilities among SMEs will be the challenges and opportunities SMEs will face in the wave of the global circular economy transformation.

In the current situation, we are in dire need to understand the interrelation between technological innovations in Taiwanese SMEs and the circular economy movements. By means of secondary data analysis of SMEs and their innovative products and/or services and in-depth case interview, the study is to interpret the relationship between innovation and circular economies and to shape the current regulation and strategies for a better adaptive environment for Taiwanese SMEs to flourish into the circular economic future.

The Taiwan SME Innovative Research Award is bestowed to innovative products, techniques, processes, and services. Between 2009 and 2016, there were 237 SME innovative awardees. By means of analyzing the awarded projects with business models of circular economy, the conclusion of this study would advise the industry to adapt cross-sector collaboration in order to divert from linear economy to circular economy, propose the authority to amend regulations embracing new business models under the circular economy, and suggest the education sector to develop technological innovation-related courses nurturing circular economy-ready professionals.


Eco-design Circular economy SMEs Innovation Taiwan 


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© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Plastics Industry Development CenterTaichungTaiwan
  2. 2.Small and Medium Enterprise Administration, Ministry of Economic AffairsTaipeiTaiwan
  3. 3.Department of Industrial and Systems EngineeringChung Yuan Christian UniversityTaiyuanTaiwan

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