A one-notch decline in Taiwan's global competitiveness ranking has caused great concern in both public and private sectors.
Lin Chu-chia, an economics professor at National Chengchi University, said the drop could be attributed to Taiwan's lackluster growth in employment, exports and gross domestic product (GDP) over the past year.
Economics Minister Shih Yen-shiang said the government is concerned about the retreat in the country's rank on the global competitiveness rankings compiled by the Switzerland-based International Institute for Management and Development (IMD).
Shih said Taiwan's economic performance, foreign trade, investment and business efficiency are all in less than ideal conditions and need great improvement.
"We will call a brainstorming session to work out new strategies and inject new vitality into various economic sectors," Shih said.
According to the IMD's newly released global competitiveness report, Taiwan's ranking dropped from sixth in 2011 to seventh this year, lagging behind top-ranked Hong Kong and fourth-ranked Singapore among Asian economies.
Also on the top 10 list are the United States (2nd), Switzerland (3rd), Sweden (5th), Canada (6th), Norway (8th), Germany (9th) and Qatar (10th).
The IMD evaluates competitiveness of 59 countries and area based on 329 sub-indicators in four major categories -- economic performance, government efficiency, business efficiency and infrastructure.
The following are excerpts from the local media coverage of issues about boosting the nation's global competitiveness:
Economic Daily News:
Professor Lin Chu-chia said Taiwan's 4.03 GDP growth in 2011 was not too bad, but the growth momentum slackened significantly in the first quarter of this year.
Taiwan lagged behind South Korea and Singapore in export growth last year and posted a higher unemployment rate than the two Asian neighbors.
"Deterioration in these three sub-indicators that are used to gauge our overall economic performance has contributed to one-notch fall in our competitiveness ranking," Lin said.
He said a one-notch decline in business efficiency is noteworthy.
"It has been one of our strong spots. The fall in our ranking in this regard should not be ignored," Lin cautioned.
The professor attributed the ranking drop mainly to decrease in domestic corporate profitability.
"As our manufacturing sector largely focuses on contract manufacturing, the gross margin has been on a steady decline and profitability of companies that focus on branding is also trimming," Lin said, adding that those trends point to a potential crisis in Taiwan's economic development.
Lin said progress in government efficiency and infrastructure came as a surprise to him.
"Good ratings in these two categories are probably linked to the President Ma Ying-jeou administration's incorruptibility and the signing of the cross-Taiwan Strait Economic Cooperation Framework Agreement as well as the launch of free trade talks with Singapore and New Zealand," Lin explained. (May 31, 2012).
United Daily News:
Barry Lam, founder and chairman of Quanta Computer Group, said Wednesday in a speech at National Central University that Taiwan's government has spent too much energy pacifying Legislative Yuan while paying too little attention to helping the industrial sector cope with challenges and sharpen competitiveness.
In contrast, Lam said the South Korean government has firmly stood behind its business sector and helped Korean companies tap into overseas markets.
"Under their government's strong leadership and financial support, many Korean companies have grown into top global brands and command dominating shares in the world market," Lam said.
He urged the Ma administration to invest more in education and talent cultivation to sustain Taiwan's economic growth with innovation.
"Our Legislature, businesses, non-profit foundations, schools and the Ministry of Education should pool resources and collaborate to create a new educational environment compatible with the needs of this digital era," Lam added. (May 31, 2012).
(By Sofia Wu)