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Taiwan¡¦s strengths
need to be exploited
By Jang Show-ling ¾G¨q¬Â
The global economy has not been doing well in recent years, and this has had a
major impact on Taiwan¡¦s economy. President Ma Ying-jeou¡¦s (°¨^¤E) administration
seems to have pinned all its hopes of an economic recovery on the signing of a
service trade agreement with China. However, the agreement is only one possible
solution; there are many other industries, such as biotechnology,
pharmaceuticals and cloud technology, that offer Taiwan a good opportunity for
future economic development.
The government has been initiating a series of policies to develop the biotech
industry since 1982. In addition to providing long-term funding for fundamental
research at Academia Sinica, the National Institute of Health and several
universities, the government has in recent years also looked at the Bayh-Dole
Act, or the Patent and Trademark Law Amendments Act, and amended relevant
legislation in order to improve innovation and research and development (R&D)
capabilities, and Taiwan¡¦s drug R&D environment is taking shape. In September,
the head of the US$800 million Novartis Venture Funds came to Taiwan looking for
investment targets. JHL Biotech has set up headquarters in Hsinchu, and other
companies are also in the process of setting up business operations and
factories in Taiwan.
In addition, Taiwan recently signed a pharmaceutical cooperation agreement with
Japan. As personnel and capital are flowing to Taiwan, it is clear that the
country is becoming the most attractive biotech market in Asia. The Chinese
government has clearly taken note of this business opportunity and its
potential, and it is eager to use the service trade agreement to attract
Taiwanese biotech and healthcare personnel. The government would be well advised
not to discard this asset by handing over something that we have worked on for
so long to someone else.
China also wants to use the agreement to attract Taiwanese software engineers,
which could affect the development of Taiwan¡¦s cloud technology industry. If
Taiwan¡¦s many small and medium-sized enterprises could take advantage of the
information services provided by cloud technology, they will not have to invest
heavily in information-technology maintenance, allowing them to focus their
limited manpower and funds on innovation and research and development. The
government should take advantage of the new opportunity offered by cloud
computing to promote the development of the software services and digital
content industries and end the nation¡¦s overreliance on electronics hardware
exports.
The development of cloud computing has not only brought major changes to
information and communications technology, other sectors can also use this to
bring about industrial transformation and upgrading. If appropriate regional
development policies are further integrated, it would be possible to improve the
constantly deteriorating imbalance between northern and southern Taiwan, and
doing so would have a far-reaching and positive impact on national economic
development.
To sum up, the current version of the cross-strait service trade agreement is
fraught with problems, such as the inability to guarantee national security and
protect disadvantaged industries. The government should restart talks to protect
Taiwanese interests, as well as step up efforts to develop the biotech,
pharmaceuticals and software industries. In doing so, it should use systemic and
legal innovation and set up a platform for exchanges between industry and
academia, in addition to seeking cooperation with developed countries to promote
diverse economic development, create more job opportunities and increase tax
revenue.
Jang Show-ling is chairwoman of National Taiwan University¡¦s economics
department.
Translated by Perry Svensson
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