As a nation, Taiwan has a strong competitive advantage from its industrial clusters and small and medium enterprises (SMEs). However, the behaviour of entrepreneurs within these SMEs are yet to be studied extensively. This case study of the Paiho company, the world’s number one producer of touch fasteners, is used to explore Taiwan’s entrepreneurship in SMEs. Paiho surpassed its Western rivals by improving imported production equipment in order to develop technical innovations very cheaply. Moreover, the founder develops effective strategy combining his good record of cooperation and sharing and reduces transaction costs between Paiho and its supply network. These two factors have made Paiho the world’s number one producer of touch fasteners. More research is needed to understand the key factors of Taiwan’s economic growth power.
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