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Investment/Industrial Cooperation

The Taiwan Advantage

Taiwan is truly the international hub in the Asia-Pacific. With Japan and South Korea to the north, the ten ASEAN countries to the south, and the economically burgeoning Mainland China to the west, Taiwan is uniquely positioned to draw upon its neighbors’ key production capabilities and resources. The island state is also one of the most important transit centers connecting primary shipping lanes for Asia and North America and therefore enjoys convenient access to the global markets.

In the wake of international trends, the world’s economic center of gravity is shifting from West to East, the focus of economic activity moving from developed markets to emerging. Separated only from each other by the Taiwan Strait, Taiwan has all the advantages of being proximate to the world’s growth center. Taiwan also shares with China a common heritage of culture and language, making Taiwan the ideal launch pad for multinational firms seeking entry into the Mainland market.

Accordingly, after concerted effort to normalize cross-Strait relations, the signing and enactment of Cross-Straits Economic Cooperation Framework Agreement (ECFA) has led to the removal of key barriers to cross-Straits trade. From the perspective of both Taiwanese and foreign businesses, the closer collaboration of industries across the Straits has served to fully incorporate Taiwan into the so-called Greater China Circle, creating a plethora of business opportunities and enabling Taiwanese firms to become indispensable partners to multinational firms operating in the Asia-Pacific. With the normalization of cross-Straits relations, Taiwan can now act as a platform, fostering business partnerships with multinational firms that would deepen their deployment across the Straits, and, as a result, elevating their global competitiveness.

[The following items are key strategic advantages that Taiwan offers to prospective business partners:]

Manufacturing Prowess

Taiwan's manufacturing capabilities are the envy of the world. Since 1980, Taiwan has played an important role in the production of system products, establishing long-term relationships with big brand names worldwide, while its high-tech industry stands as an indispensable part in the global supply chain. Taiwan is renowned for offering high production efficiency at low cost. Moreover, Taiwanese firms’ high adaptability and quick delivery have attracted many global brand manufacturers to make Taiwanese firms their OEM partner. In terms of hot global industries, particularly in the information technology and electronics sectors, Taiwan has long played a critical role.

Established Industry Clusters

Strong industry clusters constitute one of the hallmarks of Taiwan’s economic accomplishments. Industrial clusters localize the rapid circulation of knowledge, skills, and capabilities among suppliers or manufacturers, enabling not only rapid learning but also enhancing the competitiveness of the cluster as a whole. In response to global competition and industrial division restructuring over the years, Taiwan’s industrial cluster types have evolved to encompass considerable diversity. The science parks in the north of Taiwan developed with an emphasis on the electronics industry, while the center of the island hosts the Center Taiwan Precision Machinery Industrial Cluster. In the south, science parks developed with a focus to the steel, electromechanical, and petrochemical industries.

Innovation-driven Capabilities

Innovation is recognized as the main source of added value in building the competitiveness of national industries. In recent years, Taiwan has devoted extensive resources to the enhancement of research and development at the national level. The Economist Intelligence Unit’s (EIU) innovation index ranked Taiwan at 6th in the world for the period 2009-2013, following Japan, Switzerland, the Netherlands, Germany, and the U.S., while ranking first among the emerging industries. Taiwan’s high degree of collaboration with global tech sectors plays an important role in its prominence on the international stage of R&D, leading to Taiwan’s reputation as Asia’s knowledge hub, or the “Global Innovation Corridor”. Taiwanese firms themselves are not only the primary suppliers of world-class manufacturers, but also possess R&D capabilities par excellence. In this way, Taiwan’s manufacturing and supply capabilities complement Mainland China’s production capacities and are rapidly attaining scale, forming an exceptional innovation-driven industry base.

Highly Educated Talent Pool

The prevalence of Taiwanese with higher education degrees makes for high quality research talent. The WEF Global Competitiveness Report ranks Taiwan favorably in terms of availability of talent and higher education and training. In terms of the number of researchers per thousand employees, Taiwan ranks just behind Finland and Japan. Taiwan does very well in terms of the quality of higher education, with 42.9% of Taiwan’s workforce having a tertiary or university degree and above. Furthermore, Taiwan produces 32 million graduates every year from specialized training schools and universities with tertiary or university degrees and above, more than adequately meeting the industry’s demand for skilled labor. The Taiwan government continues to actively promote scientific and technological collaboration initiatives and encourages Taiwan’s academia to conduct international exchanges and the joint hosting of symposiums and major research efforts.