Strengthen Industry Resilience and Competitiveness to Establish More International Linkages
TIn response to international trends such as Digital Transformation, Industry Ecochains Restructuring, Local Economy Revitalization, and Net Zero Carbon Emission, major countries/regions around the world have launched various reaction measures: the US - be in control of the US-China trade war, pioneer technology innovations, and revive the local economy; the EU - lead green sustainable trends, enhance digital transformation resilience, and promote international industry alliances; Japan - encourage returning manufacturers, promote digital societies, and bring about green decarbonization environments; and Emerging Regions - become a new key player in the global supply chain, set up digital capabilities, and roll out digital transformation. This issue looks into the responding measures or improvements Taiwanese businesses can implement regarding the four major international trends and offers four main directions and eight major actions for Taiwan to link with the world. Domestic industries can use these as references to enhance industry resilience and competitiveness, and jointly contribute to satisfying international demand and establishing more international linkages.
International Trends Test Industry Resilience
The advancement of digital technology, the prevalence of the Internet, and the COVID-19 pandemic have highlighted the importance of digital technology. Countries are investing significant amounts of resources into enhancing the digital transformation capacities of the government, businesses, society, and the public. And this has sped up the progress of digital transformation.
Industry Ecochains Restructuring
Due to the US-China trade war, manufacturers are leaving China and shifting towards a distributed and regionalized production model. This has initiated a major reorganization of the global manufacturing ecochains.
Local Economy Revitalization
The US, Japan, and countries in Europe are actively encouraging manufacturers to return to their original countries and move their production closer to the local market to avoid relying too heavily on China for their supply. This shift can revive local economy and increase job opportunities, as well as guide the manufacturing industries in advanced countries towards advanced manufacturing.
Net Zero Carbon Emission
The Paris Agreement announced the globally shared vision of reaching zero carbon emissions in 2050. The return of the US (under the Biden government’s leadership) to the Agreement further supported the vision. This galvanized countries around the world to plan out carbon reduction roadmaps and made net zero carbon emission the common goal and responsibility of the world.
Linking with the World to Boost Industry Resilience and Competitiveness
Taiwan’s economy mainly relies on exports. Collaborating with international counterparts is a must for domestic companies that wish to carry on their businesses. With the above-mentioned international trends in mind, this issue studied 18 business cases and sorted out four main directions for Taiwanese businesses to link with the world. Domestic companies can use these directions to set up strategic blueprints and reinforce their capacities, increase their resilience, and boost competitiveness.
The four main directions for international linkage are:
1. Build Resilient Ecochains: strengthen international marketing abilities, enhance marketing channels and supply chains, develop new clients, increase competitiveness, and build a resilient business ecosystem.
2. Enhance Local Industry Values: assist other countries in leveraging their regional advantages and talents, and attract foreign companies to invest locally and set up high-value and strategic industries in Taiwan to increase overall employment rate and output value.
3. Spearhead Innovative Applications: add value to products with international advanced technologies or global key testbed verification and innovative applications/development to seize early opportunities and continuously create sustainable operation opportunities.
4. Realize Environmental Sustainability: under the common global vision of reaching net zero emissions in 2050, Taiwan should strive to have sustainable environment operations and improve our businesses’ global brand images. Sustainable environment should be one of the business development indices.
Focusing on the four directions for international linkage, we developed eight major actions and suggest concrete measures as follows:
1. Leverage Mutual Strengths: compensate our weaknesses with our strengths - reinforce existing marketing channels and develop new markets/clients to build a resilience industry ecochains. Examples include developing new applications and clients so that existing technologies and products may expand their international market share, improving overseas distributor capabilities and customizing services and products that meet local demands, and participating in international expos and platforms to increase brand exposure and export opportunities.
2. Enhance International Participation: we can participate in international alliances and organizations in the early stages and take part in technology specs establishment and gain influence on the development of emerging technologies and products. For instance, join electric vehicle and key component alliances and develop product R&D opportunities with major international electric vehicle manufacturers.
3. Attract Foreign Investments: attract overseas manufacturers to Taiwan to set up branch offices, strengthen Taiwan’s core capabilities, cultivate local talents in Taiwan, and introduce new applications and experiences to Taiwan’s ecochains development to drive industry transformation and upgrading. For example, bring in overseas maritime engineering operators to introduce offshore wind engineering technologies and experiences and set up Taiwan’s offshore wind power operations service abilities.
4. Expand Global Deployment: Taiwanese businesses should set up factories and branch offices overseas to lower costs and/or be closer to markets to understand local demand. Their HQs in Taiwan will head the operations, develop key R&D capabilities, and attract international talents to let the business become more internationalized. Businesses can also think about jointly investing in local factories with local businesses and investing in technology through whole factory export to export Taiwan’s electric vehicle technology.
5. Establish R&D Collaborations: import advanced or key technologies from overseas and establish complementary partnerships to solve demand party pain points and speed up innovative technology applications. For example, Taiwanese manufacturers can jointly develop AI with top global R&D institutions or work on products with foreign companies to gain local certification and enter the overseas market faster.
6. Provide Testbed Venues: verify new services and products from Taiwan in the international market or let new products and services of foreign companies be tested in the Taiwanese market. Products or services related to health and medical care can be tested in Japan where there is a larger elderly population. The implementation allows related businesses to gain first-hand user experience and consequently optimize business models.
7. Pioneer for Role Model: manufacturers should follow low consumption and carbon reduction guidelines during production and embrace green concepts in operations and management. Businesses can consider joining the RE100 global renewable energy initiative and promise to use 100% green energy and set up eco-friendly environments that use green energy in the future to eventually realize net zero carbon emission goals.
8. Achieve Common Goals: collaborate with ecochains partners to actualize environmental sustainability. For instance, use waste fishing nets as production material and upcycle them into high-value chemical fibers which are recognized and used by international brands, or refine agricultural food waste into high-end materials via green processes. The latter can be promoted to the world and used to recycle Rutaceae family fruit waste.
Resilience Innovation is the Way to Let the World See Taiwan
The COVID-19 pandemic threatens the health and lives of the mass population and severely impacted the global economy; yet it was also an opportunity for Taiwan to show an unexpected side to the international society: the culture of the Taiwanese public under the threat of the pandemic. The people in Taiwan worked together to minimize damage to the people’s livelihood and economy, and continue to support and contribute to the global economy.
As the global situation keeps on changing, the resilience and innovative qualities of Taiwanese businesses are the reasons why Taiwan can continue to shine in the international market. For this issue, we interviewed businesses to understand their responding actions to the ever-changing international environment. We hope the results can be used as a reference for companies in all fields and help them further participate in the global arena.