Mon, May 16, 2011 - Page 8 News List

EDITORIAL: A lack of vision is hurting our firms

Former Acer chief executive and president Gianfranco Lanci’s recent remarks about Taiwan’s brain drain, software engineers specifically, has sparked a sharp debate about the link between the nation’s brain drain and the globalization of local technology companies.

Lanci, in a recent interview with the Wall Street Journal’s “All Things Technology” blog, defended his departure by saying that he was pushing Acer to become a “mobile-focused and more global” company through increased investment, including boosting the number of engineers from 400 to 1,000. He also said the professionals Acer needed were not available in Taiwan.

It is unthinkable that a world-class company such as Acer could develop products with only 400 engineers. Taiwanese companies do need to invest more in engineers to improve their weakness in software and hardware integration, overhauling the old mindset of cutting costs to squeeze profits though manufacturing unwieldy gadgets, or offering replicas of popular devices such as Apple’s iPad.

However, his point that Taiwan lacks the qualified personnel to bring software and hardware components together to make a remarkable electronic device is questionable.

The success of local smartphone brand HTC Corp is an example. HTC manufactures its phones mostly in factories in Taiwan and, as of March 31, a quarter of its total 8,948 employees were involved in research and development (R&D).

However, it is also true that technology companies can never hire enough R&D talent. HTC plans to add 1,000 more this year from Taiwan, which also indicates that the country’s personnel pool has not dried up. Even multinational companies like US microprocessor maker AMD promoted its locally hired Andy Tseng (曾銘仁) to global vice president.

A company can have countless engineers and still not create products that wow the public. With strong technological skills, local firms are squeezing as many features into one single product as possible, but often ignoring which functions help users better manage their daily lives. They do not realize that sometimes less is more.

Take Internet star Facebook, a company that does not have a large R&D component, but had attracted investors’ attention even before it went public.

What Taiwanese electronics companies lack is a deeper understanding of what consumers want. Corporate executives may be inspired by watching the blockbuster film The Social Network, which tells how Facebook founder Mark Zuckerberg built the social network empire — originally to cater to college students’ need to connect with their friends.

Short of vision, some Taiwanese firms are becoming copycats. Playing it safe, these companies are following their global rivals’ steps by selling similar products, but at lower prices. This is a practice they are satisfied with it as long, as they do not lose money.

Numerous industry analysts expect a number of iPad-like products to be released onto the market later this year, as they try to compete with Apple’s 80 percent grip on the global tablet market.

It goes without saying that Taiwanese electronics companies have to remodel their business strategies. The prevailing approach of making fast money should be overturned. This is something that every corporate executive should be thinking about.

When Intel and Microsoft lost their dominance to the new mobile world, there was a need for their local partners to revamp their outdated business models. It takes money and courage to embrace the new world, but if Taiwanese firms do not do it now, they will soon lose their competitive edge in the ever intensifying mobile Internet market.

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