The Human Resource Side of Globalization

A recent discussion with Clyde Prestowitz, president of the Economic Strategy Institute in Washington, D.C., brought to mind the old adage: "If you don't start right, you don't end right." Prestowitz, who has extensive experience in international business and as a U.S. government official, was in Taiwan to see first-hand how Taiwan - which did so well during the "Asian tiger" period of earlier decades - is managing in the current era of globalization. He was also in town to check on sales of the Chinese-language version of his most recent book, Three Billion New Capitalists (Basic Books, 2005), which gives government and business policymakers cogent insights into the challenges and opportunities of globalization.

Over several days in Taiwan speaking with government officials and business leaders, Prestowitz inquired whether Taiwan was taking the right steps to meet the intense competition building through Asia as so many economies in the region rush to embrace globalization. It's a good question - and it triggered memory of the old adage because back in the 1980s the Taiwan government definitely did "start right" when it set up the Hsinchu Science Park and backed the idea of TSMC (Taiwan Semiconductor Manufacturing Co.) founder Morris Chang to create a chip "foundry" - a well-equipped plant able to produce multiple products for various customers, thereby relieving those companies of the burden of huge investments in fabrication facilities and allowing them instead to focus resources on designing new and better chips. That business model has proved to be a huge success, as the robust performance of TSMC and similar foundries attests. These companies and their suppliers have become primary drivers of Taiwan's economy.

• By Jane Rickards
  
  MACROECONOMIC
  BLUE LIGHT, BUT CEPD SAYS NO RECESSION
  
  CROSS STRAIT
  TAIWAN SEES RED OVER CHINA'S ORANGE BUYING
  LEE SHIFTS HIS STANCE, OR DID HE?
  
  DOMESTIC
  CHEN'S SON-IN-LAW GETS PRISON SENTENCE
  BULLET TRAIN FINALLY BEGINS OPERATIONS
  PARLIAMENTARY MELEE DISRUPTS LAWMAKING 
  
  INTERNATIONAL
  CHINA PROTESTS U.S., JAPANESE DEFENSE AID
  CHEN VISITS NICARAGUA
  TAIWAN CRITICIZES PRC SPACE WEAPONS TEST
   
  BUSINESS
  REBAR SCANDAL TRIGGERS BANK RUN, CHANGE AT THE FSC
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1.Any Used Books to Exchange? -By Anita Chen

2.Compulsory Licensing, Again -By Don Shapiro

3.Fallout from the ASE Tender Case -By Don Shapiro

As the proportion of the elderly in the Taiwan population rapidly increases, the economic consequences could be enormous. Analysts foresee a dramatic impact on the vitality of the work force, the government budget, the adequacy of the healthcare system, the viability of many educational institutions, and the profitability (for better or worse) of many business sectors.

BY Jane Rickards