Study Meeting on Expansion and Development of the Service Industry in Asia

1. Study Meeting on Expansion and Development of the Service Industry in Asia Jui-ting (Rachel), Lee Taiwan, Republic of China 2008.06.17

2. Agenda 1. Background and composition of Service Sector in Taiwan…..…………………3 2. Status of Service Sector in Taiwan …………………………………………………..6 3. Government policies, plans and regulations related to service sector………………………………………….…………………………………………..…7 4. Institutional framework and arrangements for the promotion of Service Sector in Taiwan……………..………………………………………………………...…20 5. Specific issues/problem in Taiwan service sector ……………………………...26 6. Provide possible causes of productivity different/inferiority in Taiwan Service Sector compare to manufacturing sector and also in comparison to international level of service sector………………………..……………………28

3. 1.Background and composition of Service Sector in Taiwan

4. 1.Background and composition of Service Sector in Taiwan (continued)

5. 1.Background and composition of Service Sector in Taiwan (continued)

6. 2. Status of Service Sector in Taiwan

7. 3. Government policies, plans and regulations related to service sector To promote the development of the service sector and, in so doing, achieve the goal of enhancing national competitiveness, calls for a joint concerted effort by the government and private sector. On September 20,2004, the Council for Economic Planning and Development (CEPD) held the National Conference for Service Industry Developmentat the Taipei International Convention Center, bringing together scholars, experts, government officials, lawmakers, representatives of industry and foreign business organizations, and other interested parties, to deliberate on and collectively map out plans for the future development of the service industry. The conference came up with eight sets of strategies for developing the service sector as follows:

8. 3. Government policies, plans and regulations related to service sector(continued)

9. 3. Government policies, plans and regulations related to service sector(continued)

10. 3. Government policies, plans and regulations related to service sector(continued)

11. 3. Government policies, plans and regulations related to service sector(continued)

12. 3. Government policies, plans and regulations related to service sector(continued)

13. 3. Government policies, plans and regulations related to service sector(continued)

14. 3. Government policies, plans and regulations related to service sector(continued)

15. 3. Government policies, plans and regulations related to service sector(continued)

16. 3. Government policies, plans and regulations related to service sector(continued)

17. 3. Government policies, plans and regulations related to service sector(continued)

18. 3. Government policies, plans and regulations related to service sector(continued)

19. 3. Government policies, plans and regulations related to service sector(continued)

20. 4. Institutional framework and arrangements for the promotion of Service Sector in Taiwan

21. 4. Institutional framework and arrangements for the promotion of Service Sector in Taiwan (continued)

22. 4. Institutional framework and arrangements for the promotion of Service Sector in Taiwan (continued)

23. 4. Institutional framework and arrangements for the promotion of Service Sector in Taiwan (continued)

24. 4. Institutional framework and arrangements for the promotion of Service Sector in Taiwan (continued)

25. 4. Institutional framework and arrangements for the promotion of Service Sector in Taiwan (continued)

26. 5. Specific issues/problem in Taiwan service sector • Create another economic miracle When Taiwan achieved its first economic miracle, industrial development was centered around manufacturing. Now that Taiwan faces difficulty in pursuing the development of large-scale manufacturing, it needs to refocus on the development of high-value-added services in order to create its second economic miracle. • Induce firms to position globally and stay rooted in Taiwan For global positioning, Taiwanese firms need help and encouragement in becoming successful integrators of global resources. This requires that Taiwan’s industrial development environment be made more open to enable it to play a significant role in the global economic network and facilitate its linkage with capital, technology, talent, and markets worldwide. Keeping roots in Taiwan means remodeling Taiwan as a home for domestic enterprises to emerge, grow and expand internationally and as a base of regional operational headquarters for multinational enterprises. • Help the makeover of traditional industries Help traditional industries to acquire good design and R&D capabilities can greatly enhance their efficiency and value-added, while helping them to employ new production technologies or develop local specialty products can make them more strongly competitive. • Adjust the concept of “industry” back to its broader meaning encompassing services For a long time in Taiwan, the concept of “industry” has been bounded within the narrow meaning of product manufacturing and related R&D, with large parts of the legal and administrative systems developed to match such a meaning. Henceforth, it should be accorded its original broader meaning encompassing services so that service industries can take advantage of the same legal, land-use, financial and other assistance.

27. 5. Specific issues/problem in Taiwan service sector(continued) • Discard regulatory mindset Currently in Taiwan, with administrative responsibility for service industries scattered among different agencies, there is lack of any active approach and concrete planning to guide the sector’s development through regulatory measures. The best way for the government to actively promote service industries’ development would be to discard the regulatory mindset and put the onus on private enterprises to take charge of doing it for themselves. • Push for industrialization of services Presently, the government lacks understanding of how to commercialize agricultural and medical innovation and turn educational resources to industrial advantage, and so cannot easily play a leading role in market expansion. Therefore, it should simply concentrate on strengthening existing policies and market mechanisms for service sector development, releasing public resources and arousing private-sector vitality to lead the way. • Adopt a negative-list approach At present, many laws and regulations concerning service industries adopt a ‘positive-list’ ‘management’ and approval approach. This should be replaced by a ‘negative-list’ approach that makes market entry easier and facilitates the introduction and development of new products. • Improve the legal and regulatory system To promote service sector development, the whole body of related laws and regulations needs to be thoroughly overhauled, including those governing company management, land-use zoning, labor, environmental protection, intellectual property, etc., to remove obstacles created by outmoded laws and give service industries more room to grow and thrive.

28. 6. Provide possible causes of productivity different/inferiority in Taiwan Service Sector compare to manufacturing sector and also in comparison to international level of service sector • Manufacturing outsourcing acts as a spur to the rapid growth of service industries As the trends toward industrial globalization and specialized division of labor prompt manufacturers to focus on strengthening core competencies, reducing costs, and entrusting non-core operations to specialized service providers, the desegregation of the industrial value chain is becoming more and more evident. The consequent rise in outsourcing of what used to be internal operations is driving the rapid development and growth of related service industries. • Developing service industries that can enhance the quality of life Investing in a high-quality living environment is one of the major themes of the Challenge 2008 National Development Plan. Enhancing the quality of life largely depends on achieving high levels of development in service industries such as medicine and healthcare, tourism and sports recreation, culture and creativity, environmental protection, property management, and so on.

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