Personnel recruitment poses the biggest challenge for German companies in Taiwan, but many of the firms remain optimistic about the Taiwanese economy and their business prospects this year, a survey by the German Trade Office Taipei said yesterday.
More than a third of German companies in Taiwan expect the Taiwanese economy to improve this year, while more than two-thirds of respondents expect to achieve or exceed their business targets, the survey found, after polling 241 firms from May 13 to June 7.
More than 40 percent of the surveyed companies plan to increase spending on research and development this year and over the next two years and 25 percent plan new investments in the next three years, the survey indicated.
“The domestic sales potential, proximity to key customers and presence in the Asian market” are the three main motivations for German investment in Taiwan, trade office executive director Roland Wein said.
German companies in Taiwan are mainly engaged in sales, marketing and services.
Allianz Taiwan Life Insurance Co (安聯人壽) and Robert Bosch Taiwan (博世) are the local units of the German insurance giant and engineering and electronics company respectively.
Despite its improving economic outlook, Taiwan is losing its competitive edge to China in such areas as innovation, business friendliness and government efficiency, Wein cautioned.
The poll showed that 26.4 percent of the surveyed German companies in Taiwan invest more than 5 percent of their revenue in innovation, compared with 35 percent of German companies in China.
Moreover, 48.7 percent of German companies in China plan to increase their innovation budget this year, with the figure climbing to 57.2 percent in 2015. That compares with 44 percent this year for such companies in Taiwan and 51 percent in 2015.
The trend suggests that “competitive pressure on German companies in Taiwan will increase” as German companies in China step up innovation, Wein said.
Worse still, more than 50 percent of respondents said they have difficulty finding and retaining qualified staff, the survey showed.
Robert Bosch Taiwan managing director Bernd Barkey called on authorities to ease restrictions on the entry of skilled foreign workers.
“Some may lose jobs because of the opening, but in the end, Taiwan will emerge from it stronger economically,” Barkey said.
German companies also cite preferential treatment for local companies, protectionism and administrative hurdles as key challenges to business activity, the survey showed.
The Taiwanese government “should take moves to address the issues rather than just talk about change,” Barkey said.
The protection of intellectual property is regarded as a challenge by 31 percent of the companies, an increase of 19 percentage points from the previous year, the survey showed.