Taiwan Businesses Create a Second Spring: Winchance and Cloud Take the Lead

Taiwan Businesses Create a Second Spring:
Winchance and Cloud Take the Lead
China Times editorial (Taipei, Taiwan, ROC)
A Translation
December 21, 2012

Summary: Anecdotal evidence suggests that Taiwan businesses do only OEM contract work. They do not build brands with high-value-added content. It suggests that Taiwan's competitiveness is far inferior to South Korea's R&D in science and technology, and its soft power in its cultural and creative industries. It has even led Stan Shih to express regrets that he once advocated the concept of a "technology island." 

Full Text below:

Anecdotal evidence suggests that Taiwan businesses do only OEM contract work. They do not build brands with high-value-added content. It suggests that Taiwan's competitiveness is far inferior to South Korea's R&D in science and technology, and its soft power in its cultural and creative industries. It has even led Stan Shih to express regrets that he once advocated the concept of a "technology island." These problems are rooted in transformation strategy. Do Taiwan businesses have the proper transformation strategy?  When one examines the role of Taiwan businesses in Taiwan's economic development, we should not point fingers. We should not simply conclude that "Every generation is worse than the last." We should realize that "Every generation is different from the last," and interpret developments in that light.

Taiwan businesses have undeniably been labor-intensive, export oriented, and ODM oriented. But half a century has come and gone. These three business models have been under simultaneous attack -- from Mainland enterprises and the Four Asian Tigers, especially Korean enterprises. Add to this the market downturn in Europe, the United States, and Japan, as well as challenges from leading innovators such as Samsung and Apple. The result has been a steady decline. The pressure to transform and upgrade has may breaking out in a cold sweat. The transformation of Taiwan businesses can no longer be delayed. It has a direct impact on Taiwan's economic strength.

As we all know, Taiwan businesses have long been nomads searching for markets. As Wang Yung-ching noted, wherever growth opportunities appear, that is where we invest. This approach led Taiwan businesses out of Taiwan and into Southeast Asia and the Mainland three times. They established businesses and created the Southeast Asian and cross-Strait economic miracles. Taiwan businesses shared the fruits of economic growth with these regions.

But the BRIC economies have since made their meteoric rise. Emerging countries have begun competing for export markets. Taiwan businesses were resolute and willing to endure hardship. But the Mainland has increased salary levels 15 to 20% each year for the past five years. It has widened its economic transformation policy. Taiwan businesses no longer hold a competitive advantage. Their former specialization in OEM and ODM manufacturing has been rapidly eclipsed by local Mainland businesses and by pirates.

The media has reported that half of all Taiwan businesses will close down over the next five years. These reports may be exaggerated and sensationalistic. But they confirm that Taiwan businesses are in crisis. The ancient sages said that crises are also opportunities. Therefore, the worst of times is also the best of times. For example, Korean companies emerged unscathed from the 1997 economic crisis. Among them, Samsung and LG underwent transformation. Taiwan must learn from them.

Therefore, we suggest the following as points of reference.

First of all, people should encourage Taiwan businesses instead of reprimanding them. All businesses are having a hard time. Taiwan businesses are fighting for their lives. The government should offer words of encouragement. It should take concrete steps. It should ask ITRI to upgrade technology. It should ask TAITRA to expand markets. It should ask banks to provide financing. It should offer Taiwan businesses comprehensive services. It should ask NGOs to issue more awards. It should ask the media to report successful transformations of Taiwan businesses in order to encourage them and to affirm their efforts.

Secondly, the government should provide different forms of guidance and assistance to different types of Taiwan businesses. For example, the MOEA and the FSC should establish a task force. It should actively seek out businesses likely to return to Taiwan and encourage them to do so. The SEF and the Chinese National Federation of Industries (CNFI) can actively seek out core industries likely to return to Taiwan and advise them. The Productivity Center and the consultancy industry can strengthen franchises seeking to expand into the Mainland market. Some sunset industries cannot be transformed. A professional services group should be established to help these industries close down while conserving their resources. They can then return to Taiwan and continue to contribute their skills and experience.

Thirdly, Taiwan businesses should expand their strategic alliances. They should share their body heat in order to survive the economic winter. This is especially true for leading industries. They have satellite systems and midstream and downstream supply chains. They can share capital, production, marketing, R&D, and human resources. They can break down barriers, reach out, and support each other until the economy recovers. They can use existing alliances to invest in each other. They can make their businesses more competitive. Active assistance from the government, financial institutions, and technical guidance units, would make them even more effective.

In addition to the above, Taiwan businesses are fully capable of making innovative breakthroughs. This is especially true for the service sector. Taiwan businesses are accustomed to manufacturing. They must learn how to operate franchises, service industries, manufacturing services, pre-sales, after-sales, logistics, and design services. All of these have greater potential than traditional expenditures and budget cuts. Taiwan businesses must undestand the soft power of the cultural and creative industries, as well as cloud computing services. This will enable Taiwan businesses to experience a second spring.

Finally, Taiwan businesses should cultivate professional management teams, as soon as possible. After all, Taiwan businesses have ventured overseas three times. It is time to pass the baton. Taiwan businesses should cultivate successors. They must help successors establish innovative and professional management teams. This is essential to successful succession. Close cooperation between founders, successors, and management teams, will ensure sustainable development and a brighter future for Taiwan businesses.
   
中時電子報 新聞
中國時報 　2012.12.21
社論－台商再創第二春 文創和雲端雙領軍
本報訊

    　最近坊間針對台商只做代工、不做高附加價值的品牌課題一再討論，又論及台灣的競爭力遠不如韓國的科技研發與文創軟實力，甚至引起施振榮後悔當年提出「科技島」的概念。這些問題的根源其實在於台商的轉型作為與策略走向是否得宜。針對其在台灣經濟發展所扮演的角色，我們不應指責其「一代不如一代」，而應以「一代不同一代」的態度重新闡釋。

    　無可否認，台商過去一向以勞力密集、外銷及貼牌代工為其營運模式，但半世紀走來，這三大主體模式遭到後進的中資企業與同為四小龍之韓企的夾攻，加上歐美日市場不景氣的衝擊，以及三星與蘋果創新領先的挑戰，因而節節失利敗退；而快速轉型升級的時間壓力，讓國人捏一把冷汗，為之擔心不已。此刻，台商的轉型不僅刻不容緩，且與台灣經濟實力的提升也息息相關。

    　眾所皆知，台商一向是逐市場水草而居的族群，秉持王永慶所說：哪邊有成長機會就往哪裡投資。這種信念讓台商走出了台灣，經由東南亞到大陸三次創業，且創造了東南亞與兩岸的經濟奇蹟，台商也曾風光地分享三地經濟成長的果實。

    　但曾幾何時，「四大金磚」異軍突起，新興國家參與角逐外銷市場，台商雖有堅苦卓絕的硬頸精神，但在中國大陸近五年來，年年調漲十五~二十％的薪資水準，以及擴大實施「騰籠換鳥」等政策的催逼之下，台商已經不再具有往昔的競爭優勢；而原有專長的「貼牌代工」（ＯＥＭ）與深層專業的「設計代工」（ＯＤＭ）模式也被大陸本土企業以大膽快速的山寨仿冒作法所超越。

    　媒體一再報導，未來五年將有一半台商要倒閉關門的原因正是在此。雖然這些報導可能有過度誇大的聳動，但也道出了台商當前正面臨的危機。先賢常說：危機就是轉機，因此最壞的時代也可能正是最好的時代。韓國企業走出「九七風暴」的陰霾就是例子，其中，三星與ＬＧ的轉型做法更足為台商借鏡。

    　為此，提出以下作法供參考：

    　首先，國人宜以鼓勵代替指責的角度來看待台商。當前是無商不「艱」的時代，當台商正為企業的生存發展奮鬥之際，政府宜多發表肯定台商的談話，並以實際行動邀請工研院在技術升級、貿協在市場拓展、銀行在融資等方面，共同提出對台商具體可行的聯合服務，並央請民間社團多舉辦頒獎活動，媒體也宜正面報導台商的成功轉型作為來鼓勵、肯定台商，為其加持。

    　其次，政府宜針對不同類型的台商給予不同的輔導協助，如經濟部、金管會與海基會等應成立「專責小組」，主動尋找可能回台上市業者加以輔導；也可透過海基會、工總及同業公會等主動尋覓準備回台投資的「中堅」企業；而對於欲拓展大陸市場的連鎖業者則透過生產力中心與顧問業的協助，加強其擴展實力；針對無法轉型的老化台商，宜設立專業服務團，協助業者收攤，保留其資源實力，俾回台繼續貢獻其所長與經驗。

    　第三，台商宜擴大策略聯盟，以相互取暖方式度過經濟寒冬。尤其是龍頭企業可透過中衛體系及中下游的供應鏈體系，相互在資金、產銷、研發及人力應用上，打破門面，伸手相互支援。等到景氣恢復後，可藉現有的聯盟體系的相互投資，壯大企業競爭的基礎。這些作為若有政府與金融機構及技術指導單位等在背後積極協助，成效將更大。

    　此外，創新突破仍是台商安身立命之所在，尤其在服務創新上，更有寬闊的空間。習於製造業的台商，宜向連鎖業與服務業學習。因為在製造服務與售前、售後、物流及設計服務上，皆比傳統的開源節流有更大的發展空間，而文創軟實力以及雲端網路服務，更是台商要學習的重點。如此，台商才有再創第二春的本事。

    　最後，台商宜盡速培養「專業」的接班經營團隊。畢竟台商在海內外創業三次，已屆臨接棒時刻，台商要努力的不只是培養接班人，更要協助接班人建立既創新又專業的「經營團隊」，才是接班成功關鍵之所在。創辦人、接班人及經營團隊的三方密切配合，才能讓台商有永續發展的美好未來。