Taiwan needs to tap into its people’s innate talents
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.