Taiwan service sector needs changes to adapt to new world: Think tank

Taipei, Jan. 14 (CNA) Taiwan's service sector needs to transform itself to prepare for global economic changes expected after U.S. President-elect Donald Trump takes office, according to the Commerce Development Research Institute (CDRI), a local think tank.

CDRI Chairman Hsu Tain-tsair (許添財) said at a press conference Monday that economic shifts during the Trump era may pose challenges to Taiwan's service industry, but they may also present new opportunities.

While expected exchange rate fluctuations may affect Taiwan's import costs and export competitiveness, Trump's emphasis on reducing China's influence in supply chains presents an opportunity for Taiwan to strengthen the competitiveness of its service businesses, he said.

One such area of potential cooperation with the U.S. is in artificial intelligence (AI), he said.

Hsu predicted that the uneven recovery of the economy will persist as trade and supply chains undergo global transformations, with U.S.-China relations acting as an accelerator.

If Taiwan's service sector does not engage in digital and services transformations, it may result in the sector's structural decline, he warned.

He also cautioned that Taiwan's chronic labor shortages would not be easily solved in the short term and were likely to become a long-term trend, and any lack of action in addressing the issue could lead to a wave of business closings.

Hsu said an approach of simply permitting more migrant workers to Taiwan would be too passive and that a structural transformation in how Taiwan got more workers was needed.

Japan not only recruits workers from abroad, Hsu said, but it also sends a third of the workers who did not get through training programs back to their homelands, a method that he saw as more "proactive."

He suggested that the issue should be discussed by the groups involved at the Legislative Yuan.

The CDRI was established in 2007 to "set up a basis for the service sector, create high-quality, high added-value innovation in the sector's development, integrate resources, accelerate the sector's knowledge accumulation and elevate its international competitiveness," according to the CDRI website.