Analysts predict bright future for high-tech sector

Taiwan is expected to maintain its leading role as a high-tech provider while the rise of emerging economies reshape the world's economic map, analysts said yesterday.

"Taiwan is an economy that would be well-positioned as high-tech provider in the global economy," Yuwa Hedrick Wong (王月魂), a Singapore-based economist of MasterCard International, said on the sidelines of a forum on the emerging economies of so-called BRIC countries -- Brazil, Russia, India and China -- held by the Taipei-based Business Weekly yesterday.

Amid the changes in the global economy, Taiwan should promote a knowledge-driven industry by improving manpower skills and upgrading research institutions to world-class levels to take advantage of upcoming opportunities, he said.

"After all, Taiwan is not the only high-tech provider in the global economy," Wong said.

After Goldman Sachs released a report titled "Dreaming with BRICs: The Path to 2050" in October 2003, the magazine has been running a series of features on the BRIC countries that has sparked considerable discussion in Taiwan.

The combined GDP of the four developing countries is expected to soar to more than US$40 trillion by 2040, overtaking the G6 (the US, Japan, the UK, Germany, France and Italy), the Goldman Sachs report predicted on the basis of assumptions of stable macro-economic environments and ideal policy quality.

The rise of the emerging economies could reshuffle the relative economic contributions of countries around the globe during the next 45 years, according to the report.

China is expected to overtake the US as the world's largest economy, up from sixth place last year, with GDP of US$44.45 trillion in 2050, the report said.

Meanwhile, India is expected to climb to third place, from last year's 11th place, with GDP of US$27.8 trillion by 2050. Brazil is predicted to be in fifth place, up from 13th, with GDP of US$6.07 trillion, while Russia would be ranked sixth, up from 16th place, with GDP of US$5.87 trillion in 2050, according to the report.

Of the G6 countries, only the US and Japan are expected to stay in the top six, it said.

Taiwan should seize the opportunity offered by the global economic shakeup and leverage the skilled manpower in China, India and Russia, as well as the improving consumption capabilities of their mass markets, said David Lin (林行憲), chief executive officer of Lite-On Group (光寶集團), who participated as one of the panelists yesterday.

Nonetheless, while the nation could profit from the BRIC countries' emergence, it may just as well experience the opposite effect.

Increasing demand in these developing countries, fuelled by their economic take-off, could drive up consumer prices, Wong said.

As a commodity importer, Taiwan could be faced with significantly higher production costs in the coming years, he warned.