TALENT CIRCULATION ALLIANCE WHITE PAPER
Talent is the prerequisite for realizing virtually all of Taiwan’s economic policy objectives, including transitioning to an innovation-based economy, internationalizing Taiwan’s workforce, and becoming a digital nation. To help reach those goals, the Talent Circulation Alliance (TCA) was jointly launched last year by the American Institute in Taiwan (AIT) and the Taiwanese authorities as a public-private partnership. AmCham Taipei is a member of the Alliance.
The core question is how can Taiwan cultivate a sufficiently deep pool of internationally oriented and technologically savvy talent to realize its key economic goals?
To try to answer that question, TCA – in partnership with AmCham Taipei – over the past 10 months has collected input from industry leaders, academics, government officials, foreign missions, civil society, and the general public through conferences, roundtables, meetings, and on-line digital dialogues This document consolidates the input gained from these engagements into actionable policy steps.
The short answer is that Taiwan needs to transform itself into an “international talent hub.” Taiwan has few natural resources, but it has an abundance of talented people. If the people of Taiwan are equipped with the necessary skills and then connected to the world, Taiwan will naturally succeed and be able to chart its own future for decades to come.
Becoming an international talent hub depends on encouraging the robust circulation of talent between Taiwan and other open-market, democratic societies. Historically, much of Taiwan’s top talent first gained experience abroad and then returned to succeed in government, industry, academia, and civil society. The current challenge is to re-create that success story for the digital age.
This white paper, the first of what will be an annual exercise, makes five key recommendations: Develop a national strategy for talent circulation, facilitate international academic exchange, leverage foreign talent already in Taiwan, encourage the free circulation of startup talent, and increase the participation of women in Taiwan’s professional life.
In this inaugural white paper, the recommendations are intentionally higher level and directional to help establish the initial contours of talent policy. After publication, the TCA intends to convene multi-stakeholder working groups throughout the year with representatives from government, industry, academia, and civil society to further explore how to best put the recommendations into effect.
Suggestion 1: Empower the Office of the Vice Premier to develop and implement a National Strategy for Talent Circulation.
Talent circulation policy can be viewed across four dimensions: sending Taiwanese abroad to gain experience (outbound), bringing international talent to Taiwan (inbound), better leveraging foreign talent already in Taiwan (integration), and raising the skills or participation of Taiwan’s workforce (upgrading). Any coherent national strategy on talent must comprehensively address all four dimensions with a single vision.
The TCA’s proposed vision for Taiwan is simple: Just as the Taiwan Semiconductor Manufacturing Corp. (TSMC) revolutionized the semiconductor industry by becoming the world’s foundry, Taiwan can transform itself into an innovation-based economy by becoming the world’s talent hub.
At present, talent policy is fragmented and siloed across various ministries, with little coordination or overall direction. Becoming an international talent hub will require close collaboration among the Ministry of Economic Affairs (MOEA), Ministry of Science and Technology (MOST), National Development Council (NDC), Ministry of Foreign Affairs (MOFA), and Ministry of Education (MOE), among others.
Within Taiwan’s administration, only the Office of the Vice Premier or above would have the power to develop a national talent circulation strategy and direct interagency cooperation to implement that strategy. The TCA recommends that Taiwan’s national strategy, under the direction of the Vice Premier, be based on four main pillars:
Pillar 1: Internationalize Taiwan’s workforce.
The most effective means of countering Chinese efforts to isolate Taiwan economically and diplomatically would be to internationalize Taiwan’s workforce. Doing so depends primarily upon three things:
First, become a bilingual nation as quickly as possible. English should be the official language of work for all critical sectors, especially technology, finance, export-oriented industries, and the central government. Taiwan lags far behind both Singapore and Hong Kong in English proficiency, which makes it harder to do international business with Taiwan. All externally facing documents – such as those related to visas, banking, business regulations, and labor law – should be made available in English on easy-to-navigate and modernized websites. In particular, the public sector should move towards becoming an English-language environment, with performance evaluations based partly on English proficiency.
Second, Taiwan should significantly expand the opportunity for Taiwan students to gain educational and professional experience abroad. The biggest obstacle to studying abroad is that the cost is out of reach for all but the wealthiest families. The solution is for the Taiwan authorities to provide government-backed student loans to cover the full cost of attendance for any Taiwan student gaining admission to a top-200 university anywhere in the democratic world. To incentivize students to return to Taiwan after their studies (or post-graduation internship opportunities), income-based repayment programs could be put in place upon return. The U.S., Singapore, and other countries have similar programs. This alone would be the single most important measure Taiwan could adopt to ensure a continuous stream of internationally minded workers circulating abroad and then coming back to help build Taiwan’s future.
Third, prioritize the cultivation of internationally connected and tech-savvy workers. Taiwan’s human resources are its most valuable asset, but Taiwan needs to equip its workforce with strong communication and leadership skills and encourage its talent to develop an international mindset and seek international opportunities. In this digital age, government should provide companies, especially small and medium-sized enterprises, with necessary assistance to embrace digital transformation and attract the best domestic and international talent.
Pillar 2: Attract more talent from abroad.
Make it easy for foreign talent to come and work in Taiwan. Taiwan should move toward free labor mobility with all like-minded countries in the region to take advantage of global supply chain restructuring. Access to a deep pool of local talent is arguably the most important thing world-class technology firms consider when evaluating where to do business.
Taiwan is quite weak at marketing itself internationally as a destination for foreign talent. The current recruitment efforts have been limited and the administrative processes are overly complicated. In particular, Taiwan should liberalize its rules regarding recognition of foreign professional skill certificates.
Further, Taiwan should encourage the return of many of the estimated 720,000 Taiwanese working abroad, half of them in China. Taiwan’s number-one priority in talent circulation policy should be development of an integrated strategy to market Taiwan to its diaspora and provide incentives for them to come back.
In seeking to attract talent from abroad, Taiwan should specifically target junior and second-tier talent. Although there is fierce global competition for the world’s top talent, hardly anyone is targeting junior and second-tier talent. This creates an opening for Taiwan. Bringing in junior talent will pay dividends for decades to come, as in their later career they will build upon the connections made in their early years.
Taiwan should guarantee professional internships for all international students studying at Taiwan’s major universities. In addition, Taiwan should capitalize on China’s increasing hostility to foreigners by providing affordable and accessible ways for foreigners to learn Chinese and gain professional experience in Taiwan. Increasing the number of English-speaking interns in Taiwanese businesses could help improve the English-language ability of the workforce and deepen its international outlook.
Second-tier global talent is still highly capable and often more willing to work hard to succeed. Taiwan has excellent potential for becoming a hub for talent from South and Southeast Asia, as well as for high-income countries’ professionals in technology and research. Taiwan’s Gold Card should be substantially expanded to allow for easy access by second-tier talent.
Pillar 3: Close the international/domestic compensation gap.
The number-one obstacle to retaining Taiwan’s top talent and attracting the world’s talent to come to Taiwan is the huge disparity in salaries, even adjusting for cost-of-living differences. The income gap can best be narrowed by making it easier both for foreign talent to come to Taiwan and for domestic talent to go abroad. Both put upward pressure on salaries as firms seek to attract higher-priced foreign talent and deter domestic talent from leaving.
Taiwan can compensate for its low salary level with non-monetary considerations such as its outstanding public healthcare, clean environment, friendly people, superior labor conditions, robust democracy, and progressive values. The more Taiwan improves its working conditions, such as working hours, anti-discrimination laws, and labor protection, the more talent will naturally want to work here. Strengthening unions and collective bargaining by labor can help improve working conditions; teaching international best practices in business schools can help improve corporate cultures.
Taiwan should double-down on its robust democracy and progressive values, such as respect for LGBT rights, since creative minds tend to be attracted by progressive values. Similarly, Taiwan should focus on attracting social entrepreneurs wishing to pursue social innovation. Taiwan can brand itself as a global hub for social entrepreneurship aiming to reinvent society, not just attract more workers.
Pillar 4: Prioritize attracting R&D investments.
Innovative investment naturally flows to where the talent is, and talent naturally gravitates towards where the investment money is placed. This dynamic is particularly true for research and development. Besides pursuing free trade and investment agreements, Taiwan should unilaterally liberalize its investment regime with an emphasis on attracting R&D investments. The government could offer tax incentives and subsidies for foreign companies that set up R&D labs in Taiwan, thus increasing the number of cutting-edge jobs most attractive to top talent.
When more international firms set up R&D centers in Taiwan, both salaries and work culture will improve automatically, and local firms will be first to capitalize on new innovations. Further strengthening of Taiwan’s intellectual property protections and the rule of law will make it a natural destination for future R&D labs.
Taiwan can become a world leader in targeted niches. It is too small to be the best at everything, but it can become the world’s leader in specific sectors or technologies. Three current stand-out areas are semiconductors, biomedical, and hardware-software integration. Taiwan’s continued global lead in semiconductors is not assured without sustained effort and innovation. The government should partner with Taiwan’s most successful semiconductor firms to incubate new semiconductor-related startups, spinning off the most successful ones.
Similarly, Taiwan’s top universities should transform themselves into startup incubators. Joint business and engineering programs need to be created, and closer ties developed with leading universities in the U.S. to bring new education models to Taiwan.
Suggestion 2: Expand opportunities for academic exchange.
Remove restrictions on English teachers. To become a bilingual nation, Taiwan will need a sufficiently large and capable pool of English teachers. Currently many restrictions prevent the full utilization of potential teachers. For example, the Fulbright Foundation’s English Teaching Assistants should be given the opportunity to teach in local schools beyond their current maximum two-year grant without a teaching certificate or advanced degree. They already know Taiwan and will become more effective over time.
Additionally, the rules should be relaxed to allow experienced teachers of English to secure work visas and be allowed to teach in Taiwan’s local schools with a combination of a bachelor’s degree and at least one year of classroom experience. Foreigners should also be allowed to legally teach English to Taiwanese kindergarten students so instruction can begin at an early age.
Remove restrictions on hiring foreign teachers for subjects other than English. In order to produce internationally minded students, we also urge a revision in regulations to permit the hiring foreign teachers to teach all subjects, not just English. Similarly, eligibility to teach in public schools should no longer be limited to those with teaching certificates, but instead be opened to “teachers of practice” who have relevant professional experience. Further, Taiwan’s education system should prioritize the development of critical thinking and an international outlook from the very beginning.
Make it easy for Taiwan teachers to gain overseas training and experience. The authorities should encourage local teachers to receive overseas training or professional development. Dis-incentives should be removed by ensuring that retirement benefits, health insurance, and job security are not jeopardized during their time away. Currently, teachers must delay retirement one year for every year spent abroad. Incentives to pursue continuing education opportunities can be provided through extended leaves, monetary rewards, promotion opportunities, and so forth.
Internationalize higher education. Taiwan should aim to position itself as a global hub for high-tech education by offering advanced courses in English at its top universities in such subjects as semiconductors, biomedical, AI, and hardware-software integration. Doing so would attract students from all over the world who are unable to attend U.S. or European universities. The academic freedom in Taiwan is a strength in fostering research in natural and applied sciences and the social sciences.
Internationalizing Taiwan’s higher education depends fundamentally upon attracting international professors.
The government should support Taiwan universities to upgrade the benefits to foreign faculty and promote cooperation with foreign universities to bring international scholars to Taiwan. Colleges and universities need to be able to offer competitive compensation packages to foreign scholars, whether through public-private partnerships (donors, alumni gifts, etc.), creative scheduling such as intensive winter-break or summer programs, and cost-sharing arrangements with foreign universities. The funding for Taiwan post-doctoral researchers at international institutes is currently insufficient to cover basic living expenses. Moreover, the process for recruiting foreign professors is burdened by bureaucratic inefficiency and inflexibility, requiring multiple approvals and lead times of 12 to 18 months.
Coordinate efforts to overcome internal conflicts among government agencies. MOE, MOST, and institutions such as Academia Sinica target a similar pool of scholars and offer similar benefits packages attract them. Better coordination of the various programs operated by different government agencies would bring better utilization of government budgets.
Suggestion 3: Actively leverage foreign talent already in Taiwan.
Taiwan faces an extreme talent shortage, but the substantial foreign talent already on the island can go a long way in filling this gap. Taiwan should be more confident in welcoming foreign talent to Taiwan, recognizing that it is not a zero-sum competition with the local workforce.
Pass a new foreign-talent-friendly immigration law. We look forward to enactment of the proposed New Economic Immigration Bill, which is still in the drafting stage and may come up for consideration by the Executive Yuan later this year. Our hope is that provisions will be added to make it easier to integrate foreign talent already in Taiwan. Potentially the law could solve a number of direct impediments to foreign employment and employability that have been highlighted in TCA consultations.
Most urgently, the bill should address hiring restrictions that create challenges for foreign job seekers, HR managers, and hiring companies. Currently, the achievement of certain revenue benchmarks determines the number of visas a company may sponsor. That system is especially limiting for startups at a time when various Taiwan cities and counties are working to stimulate startup activity.
For job seekers, the bill would remove the requirement of either holding a master’s degree (or Ph.D.) or having a minimum of two years of relevant work experience, a stipulation that doesn’t apply to Taiwanese job seekers. As Taiwan continues to experience “brain drain” – with hundreds or even thousands of Taiwan’s top university graduates going abroad each year to seek more lucrative work, often in China – making it easier for companies to hire the talent they want not only serves to internationalize the workforce, but also provides counterbalance to the loss of outgoing junior-level talent. This loss of junior and middle-management talent is especially significant give the rapid aging of Taiwan’s working population.
Actively promote available government programs. More needs to be done to increase awareness of Taiwan’s programs for specialized visas, grants, scholarships, and other programs. At meetings with government and NGO representatives, the TCA frequently heard that it is costly and difficult to attract professionals from other countries (especially higher-earning countries) to take advantage of Taiwan’s many programs aimed at skilled professionals and entrepreneurs. At the same time, many students, professionals, and entrepreneurs who already live in Taiwan would love to stay and make their careers and businesses here but are largely unaware of the available supportive programs.
In a private survey in 2019-2020 by All Hands Taiwan of more than 1,000 foreigners living in Taiwan, 50.3% of respondents said they hadn’t heard of the Gold Card and 43.1% were unaware of the Entrepreneur Visa. In fact, since the Entrepreneurship Visa program’s launch in 2015 it has attracted a mere 245 applicants, with 213 accepted.
We urge the responsible offices to adjust the marketing budgets and scope for all visa, grant, and scholarship programs aimed at internationalization so as to make more resources available to promote these options to foreign students and professionals already living in Taiwan. Targeting this group, which is eager to stay in Taiwan, will offer a greater return on investment and increase enrollment in these programs. These are people who likely already love Taiwan. Making these programs better known to them will enable them to help spread the word when interacting with peers in the global business community and when traveling for business or to events around the world.
Suggestion 4: Encourage the free circulation of startup talent.
An innovation-based economy depends fundamentally on having a robust, internationally connected startup ecosystem. It is therefore vital to remove restrictions and create incentives to encourage the free circulation of startup talent.
Startups with international connections and international team members are more likely to succeed in global markets. At the 2018 Global Entrepreneurship Congress Plus, the Taiwan authorities proposed creation of a “G-Asia pass,” which would extend national treatment to foreign startup talent. While reciprocal arrangements with other regional partners would be ideal, Taiwan should be willing to unilaterally offer such treatment to all foreign startup talent willing to base some or all of their activities in Taiwan.
Further, Taiwan should extend the Gold Card program to foreign startup talent and devise other incentives to attract such talent. These incentives could include tax reductions (perhaps in proportion to the number of local jobs created), a flexible regulatory environment through sandboxes to enable disruptive innovation, and reduced educational costs for their children.
Taiwan could also host a Tier One global startup conference, with winners eligible for a Gold Card and other financial support to start their businesses in Taiwan. And the government could offer subsidies to Taiwan startups with good prospects for “going global” to help with payment of angel fund or venture capital management fees. Taiwan should focus mainly on attracting talent from Southeast Asia by providing scholarships as well as support in terms of work opportunities and branding.
Build bridges with overseas innovation hubs. The government should actively pursue closer collaboration between Taiwan and U.S. tech industries, including liberalization of laws regarding foreign investment, tech licensing, and establishment of foreign tech subsidiaries or branch offices in Taiwan. Inspiration can be drawn from the “Real Israel” and “La French Tech” programs. Startup promotion should be viewed as an element of diplomatic policy, harnessing the diaspora working in startups around the world to speak up for Taiwan.
The Industrial Technology Research Institute, Institute for Information Industry, and Taiwania Capital should significantly expand their efforts aimed at connecting Taiwan innovators with their foreign counterparts, especially in the U.S. To help raise awareness of innovations taking place in Taiwan, startup founders and other professionals should receive subsidies for giving talks at or participating in international startup conferences. Public and private investment from Taiwan in U.S. technology firms should be strategically deployed with an aim of creating employment opportunities for Taiwanese talent in those firms.
Suggestion 5: Increase the participation of women in Taiwan’s professional life.
The talent shortage in Taiwan could most easily be addressed by increasing the participation of women. Ample research from the World Bank, the United Nations, and economic scholars confirms that increasing the participation of women leads to higher corporate returns and better development outcomes.
Regard the rate of women’s participation as an indicator of good corporate governance. Taiwan’s government should actively enforce legislation requiring all publicly traded companies to have at least one woman on the board of directors. Companies failing to comply should be subject to fines. Inclusion of women on corporate boards, even of small and medium-sized enterprises, is key to accelerating the trend toward creating better work-life integration in business environments.
The NDC should take a leading role and use its funds to narrow the gap of gender bias in the venture capital and finance industry. The National Development Fund could be used to support the inclusion of a female partner on boards of directors to realize the vision of “inclusive capitalism.” The Financial Supervisory Commission and the MOEA could highlight corporate governance in both publicly traded companies and SMEs.
Aim policy at life and work “integration” rather than life and work “balance.” Working parents require more flexibility in their work schedules to take care of their child-rearing obligations. However, current law makes it difficult for working parents to work part-time, which often forces women to either give up their careers or forego having children, thus exacerbating Taiwan’s already low fertility rates.
Revision of the Labor Standards Law is recommended to formalize the concept of work and life integration and pay due attention to the role of parents. For example, Sweden allows parents to share 480 days of paid paternal leave before the child reaches the age of eight, with 90 of those days reserved for the second parent to help break down gender imbalance in child-raising responsibilities.
Supportive government policies and advocacy can help break down systemic barriers and cultural norms within companies. The government could conduct an annual life-work-integration survey to identify obstacles and measure progress, and it could run an annual competition – with financial rewards – recognizing those companies that exemplify best practices for promoting a family-friendly corporate culture. Rules should also seek to protect the rights of fathers and encourage them to assume a greater role in child-rearing as a means of breaking down stereotypical gender roles and sharing the social burden.
Actively highlight women role models. Visible role models are critical for inspiring greater women’s participation. Finding and highlighting role models across a wide variety of fields can inspire more women to follow similar paths. The government should sponsor or subsidize workshops aimed at breaking down personal barriers, enhancing skills, and overcoming unconscious bias. Mentorship programs should be developed to match successful women with younger rising stars. Taiwan should organize an annual International Women’s Empowerment Summit to bring international women role models to Taiwan to share experiences and enable Taiwan to showcase its leading role in Asia as a female- and family-friendly work environment. Doing so will help attract outstanding female talent to spread their wings in Taiwan.