Sat, Oct 25, 2014 page13

• Friendlier foreign policy needed: expert

  WARM WECLCOME: The nation must address government efficiency, the rule of law and environmental policy to become more competitive, Harvard’s Michael Porter said

  • Staff writer, with CNA
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  Taiwan needs to adopt friendlier policies and regulations to make it cheaper and easier for foreign companies to conduct business, US professor Michael Porter, a leading authority on corporate strategy, said in Taipei yesterday.

  Over the past decade, Taiwan has outperformed its competitors in the region, such as South Korea, but must do more to improve government efficiency and the rule of law to build a sounder business environment, Porter said.

  Such efforts could help attract foreign investment in small and medium-sized enterprises, thus making the nation more open to new ideas, more connected to the world and more competitive, Porter said during his third visit to the country.

  Porter, a Bishop William Lawrence University professor at Harvard Business School, is a six-time winner of the McKinsey Award for the best Harvard Business Review article of the year and the developer of the famous “Five Forces” framework that is used to analyze the level of competition within an industry and business strategy development.

  Porter said the government should help build industry clusters and cited the example of Massachusetts Life Sciences Center in the US, where close interactions among research centers, venture capitalists and academic institutions have achieved noteable developments in life sciences.

  As Taiwan has an aging population, the government should encourage greater participation in the workforce by women and immigrants, he said.

  The nation should also work on its environmental policies because that is the foundation for sustainable business, he said.

  Besides taking a more proactive role in conducting business with China, Taiwan needs to work more closely with regional partners, Porter said.

  While exploring the Chinese market is important, integration into the regional economy, into blocs such as ASEAN is also vital, he said.

  At a separate seminar in Taipei yesterday, Philippine Department of Trade and Industry (DTI) Secretary Gregory Domingo said his nation has seen strong economic growth of about 7 percent over the past two years, and Taiwanese businesspeople should take advantage of the Philippines’ rapid economic growth and invest there.

  With the ASEAN Economic Community (AEC), a single regional common market of ASEAN nations, set to come into effect next year, the Philippines can serve as a good base for Taiwanese companies to enter the ASEAN market, he said.

  “We are the closest neighbor [to Taiwan] in Southeast Asia, and we have a good workforce,” he said at a seminar on investing in the Philippines organized by the Manila Economic and Cultural Office, the Philippines’ representative office in Taiwan.

  Philippine DTI Undersecretary Ponciano Manalo told more than 250 representatives of various Taiwanese companies attending the seminar that investors were 100 percent exempt from corporate income tax for up to eight years, and when the tax holiday expires, a 5 percent concessional tax rate on gross income takes effect.

  In addition, investors in economic zones are allowed duty-free importation of raw materials, capital equipment, machinery and spare parts, Manalo said.

  While high-level trade officials from the Philippines pitched the investment opportunities, saying that rapid economic growth was one of the attractive factors, New Kinpo Group (新金寶集團) chief executive officer Simon Shen (沈軾榮) and Taihan Precision Technology Co (台翰精密科技) chairman Steve Yang (楊劍平) highlighted higher electricity costs as one of the challenges of investing in the Philippines.
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