Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities. In keeping with this trend, some large government-owned banks and industrial firms are being privatized. Exports have provided the primary impetus for industrialization. The trade surplus is substantial, and foreign reserves are the world’s third largest. Agriculture contributes less than 2% to GDP, down from 32% in 1952. Taiwan is a major investor throughout Southeast Asia. China has overtaken the US to become Taiwan’s largest export market. Because of its conservative financial approach and its entrepreneurial strengths, Taiwan suffered little compared with many of its neighbors from the Asian financial crisis in 1998. Growing economic ties with China are a dominant long-term factor, e.g., exports to China of parts and equipment for the assembly of goods for export to developed countries. Entrepreneurship in Taiwan is ranked 4.3% total entrepreneurship activity.

The spirit of entrepreneurship is growing in Taiwan. Taiwan’s economic development since World War 11 has been fueled by over one million small and medium sized enterprises, which resulted in Taiwan’s inclusion as one of the four East Asian Tiger economies. Most small scale start-ups are funded by family and friends and managed as family businesses. Qualified human resources are readily available in a nation where the literacy rate is over 99.5%. The Taiwanese government actively supports the development of small and medium sized high-tech enterprises by publicly funding incubator centers in partnership with institutions of higher education.