Find a new industry to drive the economy

`Taiwan's businesses and its people were the invisible hand behind the nation's economic achievement.'

When talking about Taiwan's economic development, some always bring up the accomplishments of Sun Yun-suan (孫運璿) or K.T. Li (李國鼎). Indeed, both Sun and Li were outstanding technocrats. But the driving force behind Taiwan's economic development was not one or two people only. Rather, it was created through the participation of entrepreneurs large and small, and the people of Taiwan as a whole.

The world economy recovered and expanded after World War II. Taiwan's businesses and its people used the characteristics of an island state to profit from international trade, building many enterprises and employing numerous workers. They were the invisible hand behind the nation's economic achievements. Without them, there would be no "Taiwan miracle."

After the Economic Development Advisory Conference in 2001, the government changed its cross-strait economic and trade policy from "no haste, be patient" to "active opening, effective management." It also changed its approach to items invested in China from a "positive list" to a "negative list" approach. As a result, Taiwanese businesses of all sizes have invested in China over the past six years.

From the business sector's perspective, junior staff sent to China six years ago have already become competent and experienced managers following several years of training. The outflow of such manpower, which should have stayed in Taiwan to contribute to its economic growth, is yet another significant loss -- in addition to those caused by capital and technology outflows.

Economic entities select different goals during different stages of development. The average national income now exceeds US$13,000 per person annually. The nation has left the initial development stage behind and now sits somewhere between a developing and a mature economy.

In future, Taiwan's economic development should pursue not only increasing growth, but also work to raise the quality of life. The government's "two-trillion, two-star" project aims to increase the production value of the domestic semiconductor and the flat-panel display industry to NT$1 trillion (US$32.4 billion) this year, and promote the digital and biotech sectors as two rising-star businesses. While the semiconductor and flat-panel display industries seem to be successful, no obvious results can be seen in the digital and biotech industries.

Finding an industry to drive overall economic development while pursuing economic growth and quality of life is the most urgent task facing the nation today. This will only work if government and business figures cooperate closely, setting the right goals and making every effort to achieve them.

Taiwan is an island. With its flourishing international trade, geographical advantages, and high-quality manpower, it should not be so difficult to perpetuate economic development.

If we can target both the US and EU markets -- where Taiwan made its fortune in the past -- and precisely define a new industry to drive growth while the government and civil sectors cooperate with each other, it should not be hard to stimulate domestic business and boost the economy.

Mike Chang is an accountant.

Translated by Eddy Chang