Tai­wan needs to tap into its peo­ple’s in­nate tal­ents

The China Post - - COMMENTARY -

The Di­rec­torate Gen­eral of Bud­get, Ac­count­ing and Sta­tis­tics (DGBAS) re­cently cut its forecast for Tai­wan’s eco­nomic growth for 2015 dras­ti­cally down to 1.56 per­cent from its pre­vi­ous es­ti­mate of 3.28 per­cent. The DGBAS also re­vised down­ward the al­ready low sec­ond-quar­ter forecast of 0.64 per­cent to 0.52 per­cent.

Ex­port, the en­gine of the na­tion’s econ­omy, slowed as the economies of China and Europe, Tai­wan’s two ma­jor ex­port mar­kets, are fac­ing prob­lems of their own. Econ­o­mists have been say­ing that Tai­wan needs to di­ver­sify from its ex­ces­sively ex­port-heavy trade and shed its re­liance on low-mar­gin high­tech con­tract man­u­fac­tur­ing of high-tech prod­ucts and com­po­nents.

Chiou Ji­unn-Rong ( ), a pro­fes­sor of eco­nom­ics at Na­tional Cen­tral Univer­sity, said that Tai­wan’s econ­omy was lifted by the re­lease of Ap­ple Inc.’s smart­phone, the iPhone 6. With­out the re­lease of new best-selling phones or high-tech prod­ucts, the econ­omy per­forms weakly, es­pe­cially com­pared to the bumped-up 2014. The fact that a sin­gle con­sumer prod­uct, no mat­ter how widely pop­u­lar it is, can ex­ert such a sub­stan­tial im­pact on Tai­wan’s econ­omy is wor­ry­ing.

Ex­perts are point­ing to Tai­wan’s need to en­hance its do­mes­tic con­sumer mar­ket, in par­tic­u­lar the sales of high-value prod­ucts and ser­vices. The signs, how­ever, are not good for Tai­wan on that front. HTC , the smart­phone maker and one of the rare Tai­wanese tech man­u­fac­tur­ers that have suc­cess­fully trans­formed into a global con­sumer brand, re­cently an­nounced it would cut 2,200 jobs af­ter post­ing its big­gest-ever quar­terly loss. The prices of HTC’s stock, once Tai­wan’s most pricy, have dropped more than 90 per­cent in the past decade. Sand­wiched be­tween pre­mium phone mark­ers such as Ap­ple and Sam­sung and low-cost com­peti­tors such as Xiaomi, the com­pany has failed to out­grow its niche suc­cess and find its foot­ing. It is now val­ued less than its cash on hand.

Tai­wan also has some way to go in build­ing pre­mium ser­vice brands. The na­tion is well-equipped: it has a highly ed­u­cated pop­u­la­tion, its peo­ple are renowned for their friend­li­ness and it has no short sup­ply of cre­ativ­ity and en­trepreneurs. Yet Tai­wanese con­sumers’ ex­ces­sive pref­er­ence for cheap prod­ucts means that busi­nesses of­ten race to the bot­tom, some even re­sort­ing to illegal means — such as us­ing sub­par food ad­di­tives — to cut costs.

This is not only a prob­lem for the con­sumer and ser­vice mar­kets. The mass media has been widely crit­i­cized and ridiculed by the Tai­wanese peo­ple for its gos­sipy, sex-and-blood­thirsty news cy­cle. The true prob­lem be­hind the low media qual­ity is not the lack of tal­ents but news cor­po­ra­tions’ value of low cost over qual­ity. In­stead of fund­ing pricy in­ves­tiga­tive re­ports or over­seas cov­er­age, many media com­pa­nies choose to fill their air-time and pages with sto­ries cheaper to make. Let down by an in­com­pe­tent gov­ern­ment, in­doc­tri­nated by the gos­sipy media and es­cap­ing from the thoughts about Tai­wan’s un­cer­tain fu­ture, Tai­wan’s so­ci­ety has squan­dered its re­sources on the chase of one root­less hype af­ter another.

The pref­er­ence for low-cost gim­micks only ru­ins Tai­wan’s hands de­spite the good cards. One ex­am­ple would be the re­cent hype on “Xiao Hong” (lit­tle red)” and “Xiao Lu” (lit­tle green), two sheet-iron let­ter boxes twisted by strong gusts of Typhoon Soude­lor. The two boxes — which were bent in the same di­rec­tion, re­sem­bling car­toon fig­ures mak­ing a cute pose — be­came in­stant stars and drew such a large crowd of tourists that the author­i­ties con­sid­ered mov­ing them to a spacier lo­ca­tion to avoid traf­fic jams.

In a rare un­bu­reau­cratic move, the Chunghwa Post Co., Tai­wan’s state-owned postal ser­vice and owner of the two let­ter boxes, swiftly de­cided to keep Xiao Hong and Xiao Lu as a tourist at­trac­tion. The com­pany even sent em­ploy­ees to ac­com­pany photo-tak­ing tourists. Yet ex­ces­sive hype and media cov­er­age of the mail boxes — es­pe­cially when many typhoon vic­tims were still fac­ing dan­ger — soon turned a nice sym­bol of op­ti­mism af­ter the storm sour.

Busi­ness lead­ers need to re­al­ize the chase for low prices is not a mat­ter of ne­ces­sity ( some of Tai­wan’s best-known brands are suc­cess­ful be­cause they fo­cus on value over price), just lazy busi­ness plans. The media should rec­og­nize its role as a cre­ator of na­tional nar­ra­tives and not just a gos­sip-seller. The na­tion has to bet­ter value its pool of cre­ative tal­ents — for ex­am­ple by re­spect­ing the im­por­tance of de­sign, which many still re­gard as merely glo­ri­fied sign­board/poster beau­ti­fy­ing. Tai­wan has the po­ten­tial to cre­ate world-class con­sumer brands but it needs the vi­sion to see be­yond the lure of cheap prices and hype.

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