An analysis of Taiwan’s underlying concerns in association with global economic and industrial technology development trends
Looking into the future of the global economy, the momentum for growth in the global economy and trade has slackened due to the stalemate in Russia’s war in Ukraine which has been ongoing since February of 2022, continued spikes in COVID-19 infections, and extreme droughts in the Northern Hemisphere. Following multiple downward revisions in global economic growth forecasts and the rising crisis of debit in emerging countries, central banks across all nations have hoisted interest rates to counteract the impacts of inflation. Meanwhile, the effects of energy supply and freight transport shortages on the European economy and fluctuations in corn, soybean and wheat prices as well as oil prices have resulted in many complications and increased variables that have in turn caused fatigue and falls in the global stock and currency markets, all in all foreshadowing a dreary outlook.
A close look at Taiwan’s corresponding economic atmosphere will reveal that export has weakened and overseas orders have reduced, although retail and foodservice sales have experienced new highs on a year on year basis due to spiking domestic demand engendered by summer vacation in July. The labor market may remain stable, but due to pressure from high commodity prices and a shortened business cycle, the overall economy is slumping and, at a score of 23, verging on falling below the threshold for green light. As the Purchasing Managers’ Index continues to tighten, and with reference to forecasts made by major institutions, Taiwan’s GDP growth in 2022 is expected to be between 3.2% and 3.81%.
Dr. Duh indicates that, in terms of conditions for economic growth, Taiwan ranks No. 138 in land area and has access to natural resources including 60.71% forest cover. However, 98% of its energy supply relies on import and utilization rate of its annual rainfall of 2,500mm is just 26%, while out of a population of 23.19 million, over 17% is above the age of 65, signifying the nation’s official entry into an aged society. According to the 2022 IMD World Competitiveness Yearbook, Taiwan ranks 6th in Scientific Infrastructure, 9th in Technological Infrastructure, and 7th overall. It is therefore imperative that we know our strengths and find our advantages and course of development so that we may transform shortcomings into merits and adequately allocate the resources at hand. In terms of strategy, small powers like Taiwan must be adept at utilizing the resources of others; for example, the Dutch floriculture industry has established a global presence by cultivating abroad, becoming a unicorn in the global market.
Regarding underlying concerns in Taiwan economic development, Dr. Duh proposes that we focus on four major aspects, the first of which is our demographic structure. As the birth rate continues to fall and the death cross appears with number of deaths exceeding number of births, future talent supply will become a major issue. The second aspect is the effects of Free Trade Agreement (FTA) coverage and trade agreement membership status (CPTPP, RCEP), as extensive participation will bring greater benefits than strong reliance on just a handful of big powers. The third aspect is the impact caused by rising costs, carbon tariffs and green energy transitions all domestic industries are experiencing due to Taiwan’s goal of achieving net-zero emissions by 2050. The last is the various challenges brought by industry transformation.
To accurately envision the layout of Taiwan’s industrial technologies, we must dynamically observe and take into consideration the aspects of industry trends, key industry technologies as well as industry technological risks and opportunities including changes in demographic structure, talent flow and transport logistics on a global scale, cyberspace transactions, information security maintenance, cross-domain technological integration, green manufacturing, increase in resources efficiency, regional economic norms, climate change, and disaster control. Government entities and private enterprises should also take on different but collaborating roles.
In the near future, from 2030 to 2045, vital, forward-looking industrial technologies will comprise robots and automated systems, 3D manufacturing, Big Data analytics, AI, IoT, chemical synthesis and biotechnology, precision medicine, new energy technologies, smart cities, the metaverse, blockchain, and quantum computing and devices.