President Ma Ying-jeo’s (馬英九) nomination of outgoing Google executive and technology veteran Simon Chang (張善政) as minister-without-portfolio last week raised the hope that a much-needed overhaul of the nation’s high-tech industry is near, as pressure mounts from primary global rival South Korea.
Chang’s resume makes his appointment persuasive. Chang, 57, was head of Google’s Asia-Pacific Hardware Operations, and before that he worked at the National Science Council and was a vice president at local PC firm Acer. With close links to Taiwan’s high-tech circle, Chang can argue for the government to take a more effective approach to benefit high-tech firms and make concrete suggestions to help reshape the industry.
However, Chang cannot restructure an entire industry on his own. All government agencies will have to work together to drive growth, Chang has said.
His remarks reflect the sad truth that for a long time, a critical problem has been the government’s poor efficiency and inability to formulate or carry out adequate policies, which has led to the failure to upgrade the nation’s high-tech sector. Chang said he wants to bridge the gap between the government and local technology companies.
Chang’s concern is genuine. Over a long period of time, the lack of government stimulus programs and financial incentives has meant that Taiwanese companies have been relying on cost cuts to squeeze ever slimmer profits out of the manufacturing process. Because of their small scale and their predominant focus on manufacturing rather than development, they cannot afford the massive research and development outlays of their global rivals. However, the exclusively cost-cutting approach is not enough for them to survive intensifying competition in everything from from chip manufacturing to the PC brand sector.
Taiwan’s shaky DRAM industry is a perfect example. Lacking timely government capital injections and the advanced technologies available to competitors, Taiwanese companies are scaling back production in a fight for survival. They now only play a marginal role in the world’s DRAM industry after their market share shrank to less than 7 percent at the end of last year from 10 percent at its beginning.
There are successful Taiwanese companies that still shine on the global stage. Hon Hai Technology Group and Taiwan Semiconductor Manufacturing Co are two of them. However, both companies’ chairmen — Terry Gou (郭台銘) of Hon Hai and TSMC’s Morris Chang (張忠謀) — complain that the government has given them little help in growing their companies.
Now, as minister-without-portfolio, Chang wants the government to have a greater say in the development of cloud-computing technology, to make the nation a leading production center. The government should play a central role in developing applications of cloud-computing technology in the medical and education sectors in order to encourage more firms to participate in this industry, he said.
It is good that the government wants to help, but it has to help in the right manner. This is the old fashioned and inappropriate way — identify a promising new industry with stellar growth prospects and then simply encourage firms to join the game.
The government should learn from history. The nation’s debt-ridden DRAM and LCD sectors are the unsuccessful cases. Too many companies entered these “promising” industries after being encouraged to by the government, which only led to oversupply and a price collapse.
The government should listen more, if Chang wants to do his job better. Taiwanese corporate executives have been calling for a pro-business environment that can safeguard their investments and for effective policies that can help boost their competitiveness against global rivals. With or without Chang, these things can be achieved — if the government listens.
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
Ursula K. le Guin in The Ones Who Walked Away from Omelas proposed a thought experiment of a utopian city whose existence depended on one child held captive in a dungeon. When taken to extremes, Le Guin suggests, utilitarian logic violates some of our deepest moral intuitions. Even the greatest social goods — peace, harmony and prosperity — are not worth the sacrifice of an innocent person. Former president Chen Shui-bian (陳水扁), since leaving office, has lived an odyssey that has brought him to lows like Le Guin’s dungeon. From late 2008 to 2015 he was imprisoned, much of this
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and