Remolding Taiwan into an International Talent Hub for the Digital Age

Taiwan is home to a sizable pool of extremely high-quality talent, particularly engineers and others in R&D roles. It is one of the most progressive liberal democracies in Asia, where rule of law and freedom of speech are held sacred by society and government alike. Taiwan is also very welcoming to foreign visitors and residents, and the Taiwan government has taken concrete steps to make living and working on the island more accessible and attractive for foreign white-collar professionals. 

It is surprising then that this island of 23 million also has one of the world’s highest talent deficits. For years, the demand for talent on the island has far surpassed a dwindling supply. As more and more Taiwanese firms have begun re-shoring operations, bringing production lines from China back home amid the U.S.-China trade dispute and COVID-19 pandemic, this gap in supply and demand has become even more pronounced.

Although Taiwan’s talent shortage is due in part to demographic causes – a very low birthrate that has gradually shrunk the domestic talent pool over the years – several outstanding structural issues may be even more responsible.

A key issue is the consistently low pay for highly skilled work, which drives many Taiwanese professionals away from the island in search of better-paying jobs elsewhere, especially in China and Southeast Asia. China has made a deliberate effort to target Taiwanese talent by offering enticing study and work opportunities.

To overcome some of Taiwan’s biggest challenges and begin cultivating a pool of capable, internationally minded, and digitally savvy talent, the American Institute in Taiwan in partnership with the Taiwan authorities in 2019 launched the Talent Circulation Alliance. The Alliance’s four pillars include: recreating Taiwan’s success story for the digital age, keeping Taiwan’s future anchored in the democratic world, preventing brain drain, and growing Taiwan’s most important resource – its talent.

Talent circulation is not a new concept in Taiwan. Many prominent leaders in Taiwanese society began by studying and working abroad before returning to Taiwan to build their careers. The Alliance therefore sees a critical need to encourage talent exchanges between Taiwan and like-minded countries.

According to the TCA, maintaining a strong talent pool and stopping the continuous hemorrhaging of capable talent from Taiwan requires a national strategy for talent circulation, covering four main objectives.

First, progress must be made in closing the domestic/international salary gap in Taiwan. This can be achieved in part by making it easier for foreign talent to flow inward and for local talent to flow out. It can also emphasize non-monetary considerations, such as Taiwan’s excellent public healthcare system, clean environment, liberal democracy, and progressive values, among other attributes.

Secondly, Taiwan must internationalize its workforce, starting with cultivating a more global mindset among Taiwan’s workers. Many companies doing business in Taiwan praise the island for its excellent talent but point to the lack of an international mindset as the area most in need of improvement. English must become the official language of the workplace in key industry sectors. Further, Taiwanese talent must be given more opportunities to study and work abroad, exposing them to foreign cultures and markets. The result would be to attract more foreign businesses to Taiwan, potentially leading to higher salary levels and improved work conditions.

Third, considering the high demand for talent, Taiwan would benefit from opening its doors to more foreign talent, especially junior professionals with a keen interest in Taiwan’s burgeoning startup scene and second-tier talent from places like India and Southeast Asia. As it stands, numerous barriers to entry effectively hinder the process of recruitment and integration. Many become frustrated trying to get past these barriers, and they leave Taiwan if unsuccessful. Taiwan cannot afford to lose this increasingly indispensable talent base and the contribution it can make to the economy.

Lastly, Taiwan should focus on attracting more international investment in research and development. Incentives like tax benefits and subsidies are one way to do this, as is continuing to strengthen the intellectual property regime. Taiwan can also capitalize on its existing strengths in areas such as semiconductors, biomedical, and hardware-software integration. The more global firms that establish R&D centers in Taiwan, the more cutting-edge jobs will be available to interested and qualified candidates. This strategy will also have the add-on effect of raising salaries and improving work culture.

To start working toward these goals, the TCA began holding a series of conferences, roundtables, meetings, and on-line digital dialogues to collect the insights and opinions of industry leaders, academics, government officials, foreign missions, civil society, and the general public. A task force was then formed in late 2019 to draft a set of actionable suggestions for presentation in a Talent Circulation White Paper published by the American Chamber of Commerce in Taipei as part of its annual Taiwan White Paper in June 2020.

The following reports support the Talent Circulation White Paper’s contents by providing more background and context. As with the Taiwan White Paper, the reports cover four core areas:

  • The need to more effectively facilitate academic exchange, particularly in terms of English-language instruction and higher education.
  • The major roadblocks to integrating foreign talent in Taiwan, as well as some of the opportunities that have arisen in recent years.
  • The startup ecosystem in Taiwan, and the benefits of encouraging the free circulation of startup talent.
  • Gender equality in the workplace and how to promote women’s empowerment in Taiwan to fully tap that source of talent.

The stories and experiences featured in the following reports illustrate the need to remove these remaining hurdles. By doing so, Taiwan can begin to realize its potential as an “international talent hub.”