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An investigation of the potential for enhancing innovation within the TWMMI Due to political, economic, social and technological changes, traditional manufacturers of the TWMMI are facing a fight for survival. An effective strategy is urgently required to help manufacturers to tum these threats into opportunities. One strategy is increasing scope in order to compete with international rivals through creativity, combined with increasing productivity through technology in order to create competitive advantage. This study investigates how SMEs within the TWMMI can improve their competitive advantage. It examines the impact on company performance of creativity and ICT based manufacturing technology. A semi-structured questionnaire with open-ended and closed-ended questions was designed based on a SWOT assessment and literature review to find a positive correlation between creativity and ICT based manufacturing technology and improved business performance. Thus the questionnaire investigates how the TWMMI are dealing with the fact that they are no longer competing effectively in the woodworking machinery market as identified in the SWOT and whether they have implemented any strategic solutions, which are classified in the literature review to solve the problem. From interviews with 30 respondent companies and 18 international customers conducted, results show that: (1) Companies that implement of a high level of creative function achieve a greater level of creative success. (2) It is not always the case that implementing a higher level ofFMS combined with ICT is necessary to gain a greater level of improved business performance. Competitive advantage can be gained through outsourcing manufacturing of component parts to suppliers. (3) The implementation of a higher level of creative function combined with some level ofFMS and ICT or outsourcing may allow the TWMMI to achieve a greater level of improved business performance The strategy recommended to follow includes individual companies co-operating together by investing capital in research and development promoting creativity. Furthermore, promotion of innovation in creativity and ICT based manufacturing technology is also required along with strategic promotion of creative skills in education and society to facilitate creativity in the business environment within Taiwan as a whole.