An examination of the statistics presented in the White Paper on Small and Medium Enterprises in Taiwan over the years shows that the number of SMEs in Taiwan has grown continuously, with the total number of SMEs rising from 701,839 in 1983 to 1,226,095 in 2005. During this period, the share of all enterprises in Taiwan accounted for by SMEs remained roughly the same, fluctuating within the narrow band of 96.49% – 98.67%. By 2005, total annual sales revenue for all SMEs in Taiwan exceeded NT$10 trillion, with nearly 30% of overall sales revenue being provid by SMEs. The SMEs share of total employment has remained relatively stable, fluctuating within the 77% -80% band. The number of people employed by Taiwan’s SMEs had 7,640,000 in 2005. SMEs have not only played a very important role in Taiwan’s economy, whether in terms of the number of enterprises, annual sales or the number of people employed, they have also made a significant contribution to Taiwan’s economic development through the creation of value-added, job creation, boosting the government’s tax revenue, helping to smooth out regional economic inequality, fostering the growth of the entrepreneurial spirit, and contributing to the development of an effective division of labor within individual industries. SMEs account for over 40% of the gross product value (i.e., value-added) of Taiwanese industry as a whole. This is a higher percentage than the SMEs’ share of total sales, indicating that SMEs are better than large enterprises at creating value-added. While the SMEs’ export share has tended to fall, these exports have tended to create total production value 2.5 times higher than the value of exports themselves; the multiplier effect is particularly pronounced in the case of the manufacturing sector. The period 1987-2005 saw a net increase of almost 1.38 million in the number of employed persons working in SMEs in Taiwan; most of the increased empolyment in SMEs was in the commercial sector
