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Local companies should search for innovative talent

The Cabinet's Directorate-General of Budget, Accounting and Statistics recently adjusted its forecast for Taiwan's GDP growth for this year to 2.98 percent, and estimated that domestic demand will contribute 2.47 percent to growth while foreign demand will contribute the remaining 0.51 percent.

When speaking to the press, National Development Council Deputy Minister Chen Chien-liang (陳建良) insisted that foreign demand will remain the main driver of Taiwan's economic growth. Indeed, Taiwan has always been a country that relies heavily upon exports. Chen said that domestic demand is unlikely to provide enough momentum for economic growth.

It is a statement that does not stray from the truth. Taiwan has a small population of 23 million. The market is relatively small compared with most other nations. In order to win approval from overseas customers, there is plenty of work to be done.

During a recent forum held by the Taiwan Institute of Economic Research to discuss Asia's economic outlook in 2014, Vice President Wu Den-yih (吳敦義) said in his opening remarks that structural changes need to be made in Taiwan's industries. He stressed the importance of cultivating innovation and research capability to make more “Made in Taiwan” products.

Many Taiwanese companies have set up manufacturing facilities overseas to take advantage of other countries' lower labor costs. By moving overseas, they have also scrapped job opportunities in Taiwan. This business model is detrimental to Taiwan's economy.

Some may argue that it makes business sense to move production to wherever costs are lower. This practice certainly benefits enterprises operating overseas. However, it might not last forever and someday the costs might outweigh the benefits.

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