In the past 30 years, globalization has given way to an international division of labor, with developing countries focusing on export manufacturing, while developed countries in Europe and the US concentrate on internationalizing service industries to drive economic growth.
The competitive advantages of these countries can readily be seen in the global financial market. For example, Taiwan has attracted a lot of global interest with its technology industry. The US is the home of leading digital service companies, such as Meta Platforms (Facebook), Alphabet (Google) and Microsoft. The country holds a virtual oligopoly of the global market for consumer digital services and is the biggest winner of the network effect. Meanwhile, Germany, Japan and South Korea export not only manufacturing products, but also services, which serve as twin engines of economic growth.
Acer founder Stan Shih (施振榮) has time and again called on Taiwan to promote the internationalization of its service industry, believing that a thousand-fold more opportunities lie in the international market, as the service industry occupies a major role in the industrial structure of countries around the world and offers more value-added opportunities.
However, Shih has also said that internationalizing the service industry is 100 times harder than promoting export manufacturing, not only because service innovation is more difficult, but also because it requires more resources. This is what Taiwan needs to constantly review when promoting its digital New Southbound Policy.
Taiwan’s digital and software technology is catching up with hardware development. With machine vision, for example, optical technology would have been the focus under the previous approach when hardware development took precedence, but now with back-end artificial-intelligence machine learning, tasks can still be performed without having to frequently upgrade the hardware, enhancing cost competitiveness and creating added value for customers.
As such, there are three keys to promoting the digital New Southbound Policy, based on the idea of internationalizing the service industry:
First, the application range of the nation’s software and digital technology should be broad enough, allowing more challenges to cultivate more experiences, and accumulating experiences from integrating software and hardware to reinforce its digital technology. This is the first step to establishing the “experience scale.”
Second, the gap in the quality scale of talent — professional and international marketing expertise — between Taiwan and Europe and the US must be narrowed. As most of the nation’s talent are employed in the technology industry, the government must accelerate the introduction of international talent, recruit more foreign students in the higher education system, and review medium and long-term immigration policies.
As for the market structure, policy tools can be used to encourage technology companies that have successfully completed their digital transformation to reorganize their digital talent into independent system integration companies and integrate them with new ventures or join international mergers and acquisitions or strategic alliances. Enriching digital service talent should facilitate international cooperation and competition with big US and European companies.
The third key is to optimize the internal management and remuneration system of Taiwanese enterprises with a high-standard capital “logistics scale” to address the international competition for talent.
The New Southbound Policy used to be limited to manufacturing, with a focus on reducing personnel costs. However, to promote the internationalization of the digital service industry in the New Southbound Policy, Taiwan needs to adopt international standards, offering competitive salaries and management models to attract local and foreign talent from advanced economies to meet knowledge-intensive operational needs, and lend support to the two aforementioned key success factors.
In terms of capital, integrating international capital markets and strategic investors, and introducing a more forward-looking corporate governance system are also required to create a supporting environment for Taiwan to promote the internationalization of services in the smart field.
Lin Chia-lung is ambassador-at-large for digital New Southbound Policy initiatives and a former minister of transportation and communications.
Translated by Lin Lee-kai
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
RSS