AmCham arrow Publications arrow Topics Archive arrow Topics Archive 2004 arrow Vol.34- No.11 arrow Tapping the Market Together
Tapping the Market Together PDF Print E-mail

At a time when the rise of China and other economic challenges are posing questions about how Taiwan can best assure its continued prosperity, the holding of the second annual Taiwan Business Alliance conference this month by the Ministry of Economic Affairs was a positive step in identifying areas of high potential for further economic development. It also signaled to both domestic and international companies that they can enjoy significant advantages by working closely together to tap these new business opportunities.

 

The conference got down to practical details, focusing on three specific industries - IT services, IC design, and biotechnology. Other sectors might just as easily have been chosen, and presumably there will be a chance to spotlight them in future conferences. But the three industries selected were prime examples of how American and other foreign corporations can bring know-how, experience, and markets to the table when cooperating with Taiwan partners, for the benefit of both sides.

In the case of IT services, Taiwan's well-established foundation in the hardware manufacturing end of the IT business makes this industry a strategic point of access in this country's current drive to develop its value-added service sector. Growth prospects appear to be excellent in all three major portions of IT services: network services, project services, and software. But drawing leading international players in the industry into the market will be essential if Taiwan is to meet its goal of becoming an IT services hub for the Asia Pacific.

For IC design, also known as the "fabless" semiconductor industry, Taiwan has already taken a 28% market share to rank second in the world - after the United States. To advance further, the sector needs to bolster its collaboration with international companies and research organizations on R&D programs and on joint development of the China market.

The biotech field is considered one of Taiwan's best hopes for replicating the success it has enjoyed in IT. This country's advantages are its large pool of well-trained researchers and strong healthcare system, but the chief shortcoming is the lack of extensive commercial experience. Building up the industry will mean forging alliances with overseas universities and research institutions, as well as with multinational pharmaceutical companies. Because of mounting cost pressures, both "Big Pharma" and smaller drug firms will be increasing their use of outsourcing for product development, opening more possibilities for Taiwan to collaborate.

For all three industries, the formation and implementation of appropriate public policy will be crucial. The progress recently made in intellectual-property protection needs to be continued and deepened through rigorous enforcement. Regulations on access to the job market for foreign white-collar personnel need to be liberalized to capture the talent and ideas these knowledge-based industries require. And barriers to the free flow of human resources into Taiwan for training and short-term employment will need to be dismantled.

Amcham is eager to help facilitate the promotion of these and other key industries. American companies can offer practical advice on how to create the optimal environment to enable these industries to thrive, and they are well positioned to partner with Taiwan counterparts to take full advantage of the promising market opportunities.
 
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