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CEO says change is good

During his recent visit, Intel president Craig Barrett told reporters Taiwan should not fear the exodus of high-tech manufacturing to China.

The growth in design, product creation and other knowledge-based industries here should not only offset the loss of manufacturing, it also shows Taiwan is moving up the commercial food chain.

"I think what's happening between Taiwan and the mainland is ... very similar to what happened between the United States and Taiwan over the last decade or two -- manufacturing moves to a lower cost environment," Barrett said.

Many people in Taiwan fear what they perceive as an exodus of the nation's manufacturing sector to China.

From petrochemicals to computer motherboards and even the coveted notebook computer industry, companies throughout Taiwan are announcing the intent to build factories in China to tap into lower labor costs and enticing investment incentives offered by Beijing.

Just last week, two of Taiwan's leading industrialists, Taiwan Semiconductor Manufacturing Corp's (台積電) chairman Morris Chang (張忠謀) and Formosa Plastics Group (台塑企業集團) founder and chairman, Wang Yung-ching (王永康) both chided the government on its failure to open trade and investment links with China.

Formosa Plastics, Taiwan's leading petrochemical company, even announced plans to invest US$100 million to build a PVC (polyvinyl chloride) manufacturing plant in China's Zhejiang province. The company listed improved infrastructure, cheaper labor, and easier access to the local market as key reasons for the move.

"But I don't think that's a crisis here in Taiwan," said Barrett. "Design is moving out of the United States to Taiwan ... so you're replacing [manufacturing] here in Taiwan with [design and product creation], a higher value added step in the food chain."

He did, however, warn Taiwan to be prepared to "operate at a higher level of value creation" now. Taiwan needs employees that can handle a different level of creation, "not just manufacturing.

To grow such employees, the Intel CEO and former Stanford University professor joined an education forum which included Taiwan's Minister of Education, Ovid Tzeng (曾志朗).

he group discussed how best to prepare children for the "new economy" and how to avoid a digital divide between those with information technology skills and those without.

Barrett also said during his talk that "It's easy to be able to teach people to read in a rote fashion, easy to teach people to do mathematics in a rote fashion.

"But to be able to analyze data and make conclusions on the data, to critically think, I feel, is the target most of us have in the education of young children."

The Minister of Education expanded by saying, "We have seen that in Taiwan, education has not changed that much ... a thousand years ago, Confucius did it the way we do today. The educational program for our youngsters should help them develop their own personalities, their own choices, and to make sure they have the ability to create, to be innovative in the future. It is important that they are educated so they can fit into the industry of the future.

"We need to improve our education system to push our young-sters toward more independent, creative thinking."

The education symposium moderator, Charles Kao (高希均), added that "We tend to think or generally tend to agree that in Taiwan somehow our education system produces the best disciplined students, but they are not that creative. But in the United States, the opposite seems to be true."

"I do think that [the US] has one of the best higher education systems and I do agree that we have one of the worst lower education systems," Barrett said.

"If you take our youngsters in primary school, the longer they stay in our primary school system, the worse they perform relative to their international counterparts, which is a damning thing to say about any system -- that is the longer you are in the system the worse you perform."
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