Taiwan must formulate a plan to draw the maximum benefits from China's large, cheap labor pool while developing methods with which to counter growing competition from its rival, renowned economist said yesterday.
Claude Smadja, an adviser to Accenture and former managing director of the World Economic Forum, said in Taipei yesterday that simply retaining a strong competitive position won't be enough for Taiwan in the coming years.
"One key element related to Taiwan's economic competitiveness relates to the way the evolution with [China] will evolve in the future," Smadja said. "Taiwan's economy needs to be able not only to face the competition created by low cost labor in China, but also to put itself in a position where it will achieve optimum benefits from the kind of economic development which is taking place there."
Smadja said that high value-added, service industries should remain in Taiwan while others that can appropriately leverage their particular business productivity should relocate.
"Given the trend that will create a situation where by the end of the decade around 45 percent of the world's manufacturing capacity will be in China, it will be very difficult and very counterproductive to try and create a rear guard battle toward that front," Smadja said.
Smadja also spoke about the importance of injecting massive amounts of information technology into every level of economic activity, in macroeconomic as well as microeconomic spheres.
"One key aspect of the recession in the US which has not been noticed enough is that it was the first time that productivity continued to increase in a context of an economic slowdown," Smadja said.
He made the comments while speaking at the launch of a service award for industry organized jointly by Accenture and the Chinese-language CommonWealth magazine.
Accenture seeks to recognize outstanding Taiwan businesses in three categories; service excellence, customer satisfaction and loyalty. Registration for the first Service Excellence Award runs from April 23 through July 20.
"It is a service-oriented era, in which speed and flexibility account for business success," said Angel Li (黎小萍), local partner of Accenture. "Our philosophy of service excellence aims at enhancing customer satisfaction and loyalty as well as pursuing more customers that provide higher profit contributions in order to strengthen profitability and operating efficiency."
Only companies based in Taiwan or Taiwan branches of foreign companies that have valid Taiwan business licenses will be valid candidates for the award.
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