Mon, Sep 02, 2019 - Page 6 News List

EDITORIAL: Non-tech sectors need good policy

Economic data show that Taiwan’s economy and stock markets are stronger than those of its regional peers, but closer scrutiny reveals that economic development has been concentrated among a few high-tech industries, especially electronics, communications and semiconductors. Favorable government policies over the years have attracted greater investment and more talent to these industries, resulting in a gap between them and other local industries.

Some industries, many of them outside the technology manufacturing sector, are struggling to survive as they face structural impediments. They lack the same favorable standing with the government to ease times of painful growth. These industries are the ones that urgently need to be transformed, because they employ most of the nation’s population and would disrupt society if they failed to stay afloat.

These circumstances should prompt the government to shift policies to support ailing industries. For example, some resources could be directed from high-tech industries to ones that are stagnant or showing sluggish growth, so that even if companies and employees are decreasing, average productivity in the industries is not declining. Upgrading the technology of non-tech industries might help them sustain growth and keep them developing at the same rate as their high-tech peers.

Over the past 20 years, the government has failed to encourage sufficient research and development in manufacturing, the service sector and agriculture-related sectors. Some of the affected companies have stayed in Taiwan and done their best to develop brands and diversified product portfolios, but not all have succeeded in moving up the value chain.

The excessive concentration of resources on high-tech industries has made Taiwan vulnerable to changes in the global economic climate and, despite the government’s efforts, allowed export levels to fall behind those of its major trading partners.

Last week, Minister of Economic Affairs Shen Jong-chin’s (沈榮津) tour of sock production in Chang-hua County’s Shetou Township (社頭) was a good example of what the government can do to help local industry.

Sock manufacturing has faced increasing competition from rivals in emerging markets, such as China, with export value falling from US$118.91 million in 2008 to US$73.79 million last year, the Chinese-language Liberty Times (sister paper of the Taipei Times) reported. While the number of sock manufacturers in Changhua County has declined by about 20 percent over the past 10 years, producers still hope to expand, but face perennial problems such as insufficient capital to increase capacity, a lack of available land for new facilities and a growing talent gap. They also face new challenges, such as false certificates of origin on Chinese products prompted by ongoing US-China trade tensions.

The trade dispute between the US and China provides an opportunity for Taiwan’s high-tech industries and its non-tech industries, but to capitalize on it, the government needs to help weaker industries upgrade equipment and secure access to crucial funds.

The government could also provide education for workers in weaker industries to boost their competitiveness in terms of industry research, product design, production management, online marketing and talent cultivation.

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