Taiwan to clear investment barriers by tackling five industrial shortages

  • Date: 2017-11-21

I. Background
As a demonstration of the government’s commitment to revitalizing the economy, the Executive Yuan on September 27, 2017 launched a series of meetings convened by Premier Lai Ching-te to accelerate investments in Taiwan and address the range of issues hampering industrial growth. After government agencies analyzed and cataloged the problems most often faced by investors, Premier Lai again held four press conferences starting November 6 to present the government’s strategies and measures for dismantling these barriers.


II. Government strategies for the “five shortages”
A. Land shortage
1. Strategies: To address the shortage of land, the government is employing 12 measures under three broad strategies: releasing state-owned land at discount prices, making use of idle private land in government-developed zones, and developing and repurposing land for industrial use.
2. Benefits: By 2022, a total 1,442 hectares will be freed up to meet the increase in the demand for land, estimated at 1,266 hectares.


B. Water shortage
1. Strategies: Four strategies are in place to ensure water reliability for industrial use: development of new resources, water conservation, water allocation and emergency backup systems.
2. Benefits: All of Taiwan’s science parks and industrial parks are expected to have reliable access to water supplies by 2031. In the event of severe droughts or water shortages in the meantime, emergency backup mechanisms are already in place, along with inter-regional water allocation measures if necessary, and various water conservation plans.


C. Electricity shortage
1. Strategies: The government has three policy objectives for safe and reliable power supplies: phasing out nuclear power, stabilizing electricity supplies, and curbing air pollution. Implementation strategies include a diversity of resources to increase electricity supply, a nationwide energy conservation program, and management of supply and demand combined with smart-tech conservation.
2. Benefits:
(1) From 2017 through 2025, electricity from gas-fired generators will increase by 8.896 million kilowatts (kW) while that from coal-fired generators will increase by only 1 million kW. Renewables will be expanded to account for 20 percent of Taiwan’s energy portfolio.
(2) By 2025, the nation’s maximum available power supply will be increased to 46.91 million kW to meet expected peak demands of 40.32 million kW. From 2019 onward, Taiwan will maintain a reserve margin of at least 15 percent and an operating reserve of at least 10 percent.
(3) Air pollution will be reduced by adjusting the use of fuel-fired generators in each region as needed.


D. Shortage of skilled professionals
1. Policy directions: The shortage of skilled professionals will be addressed through retention, recruitment and cultivation policies.
2. Strategies:
(1) Retention: To keep skilled talent from leaving Taiwan, the government will build an attractive tax environment, create new channels for companies to offer rewards, and provide opportunities for young people to flourish.
(2) Recruitment: The Act for the Recruitment and Employment of Foreign Professional was passed by the Legislature October 31, 2017, relaxing regulations on visas, residency, health insurance, tax, and retirement benefits. The Contact Taiwan online job-matching platform has been upgraded to a one-stop international recruitment portal. The Immigration Act will be amended, widening the door for overseas talent to enter Taiwan and remain in Taiwan, and easing long-term and permanent residency requirements for returning overseas Taiwanese and their second generation.

For international students wishing to work in Taiwan after graduation, the length of time permitted to find employment has been extended from six months to a year. Regulations on foreign personnel from multinational corporations transferring to Taiwan for work or training have been loosened, and a personnel exchange mechanism with countries targeted by the New Southbound Policy has been established. Within the “five plus two” industries, thresholds on capital and revenue have been eased for companies seeking to hire foreign professionals. More experimental bilingual courses will be set up at public elementary, junior high and high schools.
(3) Talent cultivation: Strategies include strengthening industry-academia links, involving corporations in the teaching process, encouraging industries to collaborate with schools in training workers needed in their fields, expanding the industry professional assessment system, training at least 1,000 high-level specialists in smart technologies, producing college students with interdisciplinary skills for smart technologies, and promoting courses on skills upgrading or a second area of expertise to help workers transition to high-tech jobs.


E. Labor shortage
1. Policy directions: The government’s policy directions for addressing the general work force shortage consist of matching workers to unfilled positions while developing the work force, improving wages and working conditions, and promoting industry-academia cooperation to bridge the education-to-employment gap.
2. Specific measures:
(1) Match workers to unfilled positions, develop the work force: Measures include establishing an interministerial platform to match workers to priority industries or industries designated for major investment, attracting workers with incentives to industries with labor shortages, providing career development services for young people, drafting a law promoting employment of middle-aged and older workers, and raising women’s labor participation through family-friendly policies.
(2) Raise low wages, improve working conditions: Measures include promoting industrial upgrading, guiding the “3D” (dirty, dangerous and difficult) industries to improve work conditions, publishing job market salary information, and encouraging companies to invest in human resources.
(3) Promote industry-academia cooperation, bridge the education-to-employment gap: Measures include encouraging industry-academia cooperation on off-campus internships for students, expanding joint training programs by schools and businesses to better match skills to jobs, organizing diverse and customized occupational training programs, offering job-oriented courses and certification, and encouraging students to begin work right after graduation.


III. Conclusion
To make it possible for businesses to upgrade, innovate, and stay rooted in Taiwan while expanding globally, the government is facing the problems honestly, formulating strategies pragmatically, and addressing the five industrial shortages steadily. Removing business barriers to investment will not only spur investments domestically but lure other countries to invest in Taiwan as well, all with the promise of moving Taiwan’s economy to the next level of performance.