Now is a good time for the government to work out overall economic strategies for Taiwan's industries at a time when most local businesses have been hit by an economic slump, a prominent leader of the local small business community said yesterday.
Day Sheng-tong (
"As long as Taiwan's environment is good enough, local small businesses will be able to take off again," he said.
Talking about the economic slowdown which has pushed many Taiwan traditional and high-tech businesses to relocate to China, Day attributed the situation to a booming stock market over the past five years. High profits taken out of the local bourse have lured over 3 million families to invest in the market, resulting in a "marginalization of industries" in the country, he said.
The craze for speculating in the stock market has made people forget how Taiwan managed to stand up on its own two feet in the past, Day said. But he stressed optimistically that "Taiwan's future is bright as long as the government works out a long-haul economic development strategy."
Looking back, Day said the exodus of small and medium-sized businesses to China was the result of inadequate government policies which viewed small businesses -- once the locomotive of the economy -- as "sunset industries" in an attempt to better promote high-tech industries. But many Taiwan-based high-tech firms are also undecided as to whether or not they should move to China, he said.
Echoing the opinion of the renowned strategist Michael E. Porter, who visited Taiwan last month, Day said that Taiwan companies have paid too much attention to seeking ways to lower their production costs, which have in turn made them ignore the importance of hammering out strategies for their businesses.
As to the high-profile Economic Development Advisory Conference (經發會), Day said the most import task for the conference is to draw up "strategies" rather than "tactics," and called for broad vision to achieve the objective.
In the face of fierce competition from China and its cheap labor force, Day called it "unfair competition" and urged the government and local businesses to re-assess Taiwan's position and to travel their own paths.
Regarding the question of how to save the small business sector, Day proposed a rating system be set up by the government to help companies deal with banks in case of a loan request based on their personnel quality, research and development abilities, credibility and earnings.
In addition, he contended that the government should ease restrictions on bank loans to small businesses. "Taiwan's small businesses are tenacious and flexible, and they will manage to stand on their feet again if the government is capable of creating a financially loose climate for them."
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