Over-regulation hinders upgrading

By Chang Ching-ter 張錦特  / 

Tue, Oct 16, 2012 - Page 8

You cannot run a first-class university without first-class teachers, and you cannot have a first-class country without top-notch civil servants. Most people probably appreciate that a nation’s standard of living can only keep improving if its industries are constantly upgraded, but many of those who have the power to make policy decisions tend to set things going in the wrong direction.

What has gone wrong with Taiwan?

Industrial upgrading is highly dependent on the availability of talented people, so let us consider some reasons why Taiwanese industry has failed to upgrade itself.

The first problem is that not enough value is placed on talented people, and they are not given the kind of jobs in which they could put their talents to the best use. For example, the government made a regulation to the effect that salaries paid to senior personnel in semi-governmental research bodies cannot be higher than those of government ministers. How can research institutions retain talented personnel when they are subject to such a regulation?

If any institution pays a slightly higher salary to anyone working in any particular post, those people get labeled as “fat cats,” no matter how great a contribution they make. It is no wonder, then, that outstanding talents go elsewhere.

Eager foreign governments have set up departments that work similarly to the headhunters of the business world. They seek to attract first-class talent from around the world by offering the best salaries, benefits and help with finding accommodation and setting themselves up.

However, no such department exists in Taiwan. To make matters worse, there are all kinds of limitations that make it very inconvenient for talented people to come and work in Taiwan.

You cannot run a first-class country without first-class civil servants. Salaries paid to civil servants in Taiwan compare poorly with the other “Asian tiger” economies. Although many people register to take the senior and junior civil service entry examinations each year, few of the applicants are graduates of top public institutions.

The reason is quite simple: civil servants’ salaries are not high enough to attract people of this caliber to join the civil service.

Furthermore, populism is on the rise, with politicians and commentators often making a big fuss about things like the 18 percent preferential interest rate on civil servants’ pensions and the size of their year-end relief payments. Judging from all the fuss, you would not have thought that those conditions were all set out in contracts signed between the government and civil servants many years ago.

This was the system that attracted them to take the entry exams to join the civil service and serve the country throughout their working lives. Now that these civil servants have retired, people are complaining that the system is unfair. If anything is unfair, it is the criticisms now being leveled against our retired civil servants. If civil servants’ salaries are dragged down by this kind of populism, we will soon see Taiwan turned into a third-rate country.

The second point is that the government keeps forbidding universities to increase their fees. If universities do not have enough financial resources, how can they hope to attract world-class teachers to work for them?

Without first-rate universities, how can Taiwan attract first-rate students to come and study here, and hopefully to stay here after graduation and help Taiwan to upgrade its industries, science and technology?

There is a way out of this situation. To begin with, the government could continue not allowing state-run universities to increase their fees, but allow select, high-achieving private colleges to set their own fees. That should not have too great an impact. If these colleges raise their fees, but fail to deliver a commensurate improvement in teaching, students will naturally choose not to study there.

Only by allowing this kind of benign competition can Taiwan hope to ever have top universities like Harvard and Stanford.

Another problem is the policy of not differentiating between teachers and civil servants. At present, 70 percent of doctorate holders are stuck on campus, which is a great waste of human resources.

The Ministry of Education is always sending out letters saying that colleges and teachers are or are not allowed to do this, that or the other thing. It manages teachers as if they were civil servants, but there is really no need for this. Civil servants have powers that leave them open to being bribed, should they be so inclined, but teachers have no administrative powers, so it should not be necessary to impose so many controls on them.

It would be better to let teachers do their research more freely, so that industrial upgrading can fully benefit from collaboration between business and academia.

The ministry might respond that it gets technical and vocational schools to collaborate with industry. However, colleges set targets for teachers to follow, forcing teachers to spend all their time trying to meet these instead of focusing on their teaching. It is even quite commonplace for teachers to pay out of their own pockets to set up bogus industry-academic collaboration projects, just so that they can keep their jobs.

How did a set of well-intentioned measures end up like this?

Standards for collaboration between industry and academia should be categorized. It is easy for engineering departments to find partners for projects, but it is not so easy for business management, humanities and other departments to do so.

Whoever set up the system did so in a simplistic way that only takes into account the quantity of projects and the sums of money involved. The right way to go about it would be to set different indices for assessing achievements in different fields.

The more controls and assessments the ministry imposes, the more pressure there is on universities to all develop in the same way instead of having their own characteristics. This uniform approach gets in the way of fostering outstanding talent in various fields.

These are just some of the reasons why Taiwan’s industry has failed to upgrade.

Chang Ching-ter is director of Chang Gung University’s Graduate Institute of Business and Management.

Translated by Julian Clegg