How Taiwan Lost Its Roar And Its Young Talents | Insight | CNA Insider

Summary

This transcript explores Taiwan's economic struggles, highlighting its rise as an economic powerhouse in the 1970s and 1980s but subsequent decline in the 1990s. Faced with rising competition from China, stagnant wages, high living costs, and a brain drain, Taiwan is grappling with diminished global competitiveness. Despite efforts to innovate, many young professionals are leaving for better job opportunities abroad, particularly in China. The transcript also touches on the challenges the government faces in revitalizing the economy, especially in the IT sector and the service industry, while trying to keep talent from fleeing to foreign markets.

Takeaways

• 😀 Taiwan's economic growth slowed significantly after the 1990s, coinciding with China's rise as a manufacturing hub.
• 😀 Taiwan, once the second fastest growing economy in Asia after Japan, now faces stagnation and challenges to its competitive edge.
• 😀 The Four Asian Tigers (Singapore, Hong Kong, Taiwan, South Korea) saw rapid growth in the 1970s, but Taiwan's economy has struggled in recent years.
• 😀 Taiwan faces significant challenges in the form of high living costs, stagnant wages, and rising youth unemployment.
• 😀 President Tsai Ing-wen's administration is under pressure to fulfill its election pledges amid local elections approaching.
• 😀 Taiwan's reliance on the IT sector and services is not sustainable in the long run, especially as China develops its competitive edge in these areas.
• 😀 Taiwan has struggled to establish its own global brands, unlike South Korea, which has succeeded in creating international names in technology.
• 😀 Brain drain is a major issue for Taiwan, with young, talented workers moving abroad for better opportunities, particularly to China and Singapore.
• 😀 Despite efforts to reinvent itself, Taiwan continues to lose skilled workers to China, where wages are higher and living costs are lower.
• 😀 Taiwanese workers like Jamie, who moved to Singapore for work, cite low wages and a lack of job opportunities at home as key reasons for leaving Taiwan.

Q & A

What is the significance of the Four Asian Tigers, and how did Taiwan fit into this group?

The Four Asian Tigers—Singapore, Hong Kong, Taiwan, and South Korea—were notable for their rapid economic growth and industrialization between the 1960s and 1990s. Taiwan, during this period, achieved consistently high growth rates and became one of the fastest-growing economies in Asia, particularly in the 1970s, second only to Japan.

What factors contributed to Taiwan's economic slowdown after the 1990s?

Taiwan's economic slowdown in the late 1990s was primarily due to rising competition from China, which provided cheaper manufacturing alternatives. Additionally, Taiwan struggled with its dependence on the IT and service sectors, which could not maintain the same level of growth as China and other neighboring economies.

How has the rise of China affected Taiwan's competitive advantage?

China's rise as an economic powerhouse has diminished Taiwan's competitive advantage, particularly in manufacturing. China offers a cheaper labor force and has developed its own manufacturing capabilities, making it a more attractive option for global companies, which has led to a loss of business opportunities for Taiwan.

What is Taiwan's main challenge in terms of its workforce and economic structure?

Taiwan's main challenge lies in its reliance on the IT and service sectors, which are not sustainable in the long run. The economy faces stagnant wages, productivity slowdowns, and a skills mismatch, which has led to young professionals seeking better opportunities abroad.

What impact has the brain drain had on Taiwan's economy?

The brain drain has significantly impacted Taiwan's economy by depleting its talent pool. Many young, skilled professionals are moving abroad, especially to China, where they can find better pay and job opportunities. This outflow of talent has exacerbated Taiwan's economic stagnation and reduced its innovation capacity.

Why are young professionals, like the Taiwanese sales director in Singapore, leaving Taiwan?

Young professionals are leaving Taiwan due to stagnant wages, limited job opportunities, and a lack of dynamic, internationally oriented roles. As the sales director mentions, the job market in Taiwan is primarily focused on domestic needs, while opportunities abroad, particularly in China and Singapore, offer higher wages and more career prospects.

What does Taiwan need to do to address its economic challenges and retain its talent?

Taiwan needs to diversify its economy beyond the IT and service sectors, creating new industries that offer sustainable growth and global competitiveness. Additionally, the government should implement policies that incentivize job creation, improve wage growth, and create opportunities that can attract and retain young professionals.

What role does China play in attracting Taiwanese professionals, and how does it affect Taiwan's economy?

China plays a significant role in attracting Taiwanese professionals by offering higher wages, better job opportunities, and a lower cost of living compared to Taiwan. This has led to a brain drain, as many talented individuals leave Taiwan for China, further hindering Taiwan's economic recovery and growth.

How does Taiwan's inability to establish leading global brands affect its economy?

Taiwan's inability to establish its own globally recognized brands has left the economy vulnerable to competition, particularly from South Korea, which has successfully built strong global brands. Without these global players, Taiwan struggles to maintain its economic edge and faces challenges in sustaining long-term growth.

What specific policies could Taiwan adopt to stimulate economic growth and prevent further brain drain?

Taiwan could adopt policies that focus on diversifying its economy, investing in new industries such as green technology or advanced manufacturing, and improving the business environment to foster innovation. Additionally, policies that focus on improving wages, reducing the cost of living, and creating a more vibrant job market for young professionals could help stem the brain drain and retain talent.