Innovation has always been Acer's major driving force, and at Aspire Park innovation is a way of life.
Visiting Acer's Product Value Lab in the 172-hectare Aspire Park in Lungtan, Taoyuan County is like visiting a countryside holiday resort. Complete with a swimming pool, gym, cafe, shops, and residential areas, the premises not only have large areas of greenery and a nature conservation area, it even has its own clinic and fire department. "Who says a laboratory has to be in a crowded urban area or corner of a noisy factory?" says lab chief technology officer RC Chang. "And who says it can't be in a park-like environment where it's only a few minutes' walk in fresh air from home to work?"
Aspire Park is Taiwan's first multi-functional industrial park to be single-handedly developed by the private sector. Inaugurated in 2002, it was originally a housing project for Acer employees started 15 years ago, then re-planned to its current layout in the mid 1990s. During the planning, Acer invited professionals from inside and outside of the computer industry, along with those connected to the arts, to brainstorm Aspire Park's design and layout, to create a living environment that would stimulate the minds and creative souls of those who live within it. The final blueprint of the park, in addition to equipping all the housing units with ADSL (Asymmeric Digital Subscriber Line) and fiber optic cables, also included a research complex, an industrial zone, and a training and conference center.
The development of the park is to be completed in three years, and total investment is expected to reach NT$200 billion (US$5.9 billion). Despite Acer's massive investment in the project, its aim is not simply to increase corporate profits but to provide an environment that will nurture all Taiwan's future generations of researchers and innovators. In addition to Acer's, some of the other research teams that have already started operation in the park's Aspire Research Complex include K-Best Technology Inc., a manufacturer of microwave transmitters, receivers, and transceivers; Canon's semiconductor business unit, and National Chiao Tung University's Digital Creation Industry Development Center. Manufacturers like AU Optronics Corp., the world's third largest manufacturer of TFT-LCDs, have also started operations in the park's industrial zone. As Acer Chairman and CEO Stan Shih said at the park's official groundbreaking ceremony, Acer is only a gardener, and the fruit must be shared by all.
Shih has been a gardener of innovation ever since he and several friends pooled together NT$1 million (US$25,000 then) and established a company called Multitech International Corp. in 1976 to harness Taiwan's microcomputer and microprocessor-based technology. With a staff of 11, Multitech was really a tiny operation in the industry, but it had a strong R&D team because of the founders' engineering background. Within three years of its establishment, the company designed Taiwan's first mass-produced computer for export; given another three, it came up with the MicroProfessor-II, Taiwan's first 8-bit computer; then in another four, it ran ahead of IBM with 32-bit PCs.
With financial assistance from a local entrepreneur, Multitech started its manufacturing operation in the Hsinchu Science-based Industrial Park in 1981. For several years, the company operated as an original-design-manufacturing contractor whose products were sold under other brands. It was not until 1987, when Multitech became Acer, that its products started to be marketed under its own brand and grew extensively in the following years into the world's eighth largest PC brand.
Its rapid expansion into global markets did not slow down Acer's efforts in R&D and innovation. In 1991, for example, introduced its "chip up" technology--the world's first 386-to-486 single-chip solution that allowed easy upgrading of the CPU with a faster processor, subsequently licensing the technology to dozens of other companies, including Intel. Then in 1994, it introduced the world's first dual Intel Pentium PC. These innovated products, as well as the Acer brand, were becoming known to the international market and have brought the company many domestic and international awards. Acer, for example, has been voted Reader's Digest Gold Computer SuperBrand in Asia for six consecutive years since 1999.
Throughout the years, Acer's innovations covered not only products but also other aspects such as management retail channels. AcerLand, for example, Taiwan's first and largest franchised computer retail chain, was founded in 1985. Conflicts, however, emerged between the enterprise's manufacturing and branding businesses, when Acer's own products were competing with those it built under contract for others like IBM or Dell. The solution was to split into two companies: Acer, a brand company that focuses on globally marketing its brand-name products and e-business solutions; and Wistron Corp., an independent design and IT manufacturing company that was originally Acer's design and manufacturing business unit. This way, while Wistron can still make many Acer machines, Acer can freely order hardware from Wistron's rivals to improve the competitiveness of Acer products.
The restructure turned out to have a profound influence on the company's R&D heritage adopted since the establishment of Multitech. "The consensus then was that Wistron would need the support of a strong R&D team for design and manufacture, but a branding company could probably do without the team," RC Chang explains. "The verdict was that Wistron got all the original Acer R&D staff, and Acer got none." The result was that Acer was without R&D or innovation staffers for more than a year after the split in 2001.
The downside of the move soon became apparent. "Without our own innovation capability, there's a possibility that we end up selling whatever the suppliers can provide instead of selling the products we believe to be the best value for the customers," Chang says. "What's even more risky is that without our own R&D, we won't even be able to tell our suppliers about what the best-value products should be."
Chang further explains that the types of innovations a brand company is seeking are different from those of a manufacturer. As a manufacturer, the innovation may be more "technology-centric," meaning building smaller, lighter, and more powerful machines, or improving the "food chain" to establish a more efficient assembly, management, and marketing system thus generating more profits. But as a branding company, Acer's innovations need to be more "customer-centric." So in early 2002, Acer started a new innovation team in Aspire Park.
Capital was not a problem. Acer listed a five-year, NT$1 billion (US$29.5 million) budget for the new team. But finding the "human capital," specifically entry-level researchers, was more challenging. As Acer sees it, the human resources making innovations have always been Acer's major concern. Even when Acer was still Multitech, Shih founded a microprocessor training center where some 3,000 engineers were trained in the fundamentals of microprocessor-based design, laying the foundation for the island's information technology industry. But it seems that things have changed a little. "For senior researchers, we provide them with our company vision, and they're willing to give up a little and come to help accomplish that vision," says Chang, who organized the team. "But entry-level young researchers usually care more about finding a job near home than sharing a vision."
The problem of Aspire Park's location, a 50-minute drive from Taipei, was solved thanks to the national defense substitute conscription system, which allows conscripts to choose four years of substitutive conscription according to their interest or specialty in private companies in designated industries instead of serving the regular military conscription. Acer held campus promotions and successfully recruited enough people.
The new innovation team has about 60 researchers. Believing that the company's competitive edge lies in services and innovation, the team has two units to work on products and services. "Our mission here is to break the barriers between people and technology by developing products and services that truly answer to customers' needs and wants," says Chang. "And while creating added value for our customers, we want to minimize any added costs."
Meanwhile, the services innovation unit has come up with MegaMicro e-Enabling Services, which is based on Stan Shih's idea of mega e-infrastructure and micro e-services. "We find many of Taiwan's small- and medium-sized enterprises [SMEs] have invested in servers but can't afford an MIA [mobile information agent] to manage the server," Chang says. "It's a shame that these servers are used as PCs, so Acer offers to provide the services to enable them to do what they're designed to do."
Acer's MegaMicro e-Enabling Services are similar to the ones pioneered by IBM, but Acer's scheme is different from IBM's in that it sets up all e-business infrastructure in its e-Enabling Data Center in the Aspire Park and sells popular applications such as remote e-mail, web hosting, and secure Internet access for a minimum monthly fee. And while IBM focuses on selling tailor-made solutions to large corporations, Acer targets SMEs as well as some home users.
The product innovation unit has also had good results. The latest Acer laptops, for example, are equipped with an "eKey" that enables users to access frequently used functions conveniently. The team has also developed a solution that can increase laptop run-time by 20 to 25 percent. Chang explains that every manufacturer wants its product to have longer run-time, and that the way forward is the hardware--using either more powerful batteries or less powerful processors. All the same, Acer chose to invest in rewriting the software for more efficient power management. "More powerful batteries increase cost, less powerful processors are unacceptable to customers," he says. "An innovated software, on the other hand, can get things done without the disadvantages." This new software, the ePower Management as Acer names it, has also been applied to Acer's latest laptop models.
Starting out as a company formed by engineers and becoming Taiwan's first brand name in the IT industry, Acer has always recognized that even a small innovation can create business. Many think that the most successful part of Acer's philosophy was that instead of thinking of making money, it was primarily driven by innovation, and the desire to make Taiwan a brand name known not for cheap original-equipment-manufacturing output but for innovative and desirable products.
"Building a brand is a challenge, and innovation plus talent are the key," Shih said, to foreign media earlier this year. "Society doesn't need me to duplicate what is already available. If people would like to have a new radio, you should give them something they don't already have." It is a point he has made repeatedly, and perhaps most memorably in the title of his 1996 bestseller, Me-Too Is Not My Style.