Chapter 2、The theory of globalization and human capital flow
2.2 The globalization theory and human capital flow
3.1.4 Period of economic transformation (1986-1996)
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20.1%. The industrial output value accounted for the proportion of gross domestic product (GDP) increased from 26.9% in 1960 to 43.8% in 1973. The exporting industry products rose from 32.3% in 1960 to 84.6% in 1973. Taiwan government established the export processing zones as the core processing industries such as textile, home appliances, industrial pillar to drive the economic miracle of Taiwan, making Taiwan’s economy strength among the first of the "Asian Tigers".
3.1.4 Period of economic transformation (1986-1996)
Since the 1980s, due to changes in the internal and external economic environment such as the sharp appreciation of the NT dollar against the U.S. dollar rose sharply, wages increasing and the labor shortages, the labor-intensive exporting industry is the gradual loss of comparative advantage and low private investment willingness. Thus, the economic development was into the difficulty. The government in 1986 proposed a policy of "Liberalization, Internationalization, Institutionalization" of economic restructuring to improve the mechanisms of a market economy, industrial upgrading and expansion of the foreign trade market besides the United States as a major adjustment. Moreover, the government determined the ten new industries as a pillar industry including communication, information, consumer electronics, semiconductor, precision machinery and automation, aerospace, advanced materials, specialty chemical and pharmaceutical, health care and pollution prevention.
Taiwan has experienced economic restructuring and economic progress in the liberalization and internationalization, industrial upgrading and also the early effectiveness of capital and technology-intensive industries accounted for the manufacturing sector reached 61.5%, including the development of the communication industry highlight, the output value has been ranked the top of world. Taiwan's
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exporting market was shifted to Asia from Europe and the United States. The proportion of exports to the United States was from 48.8% in 1984 down to 23.7% in 1995.The proportion of exports to Asia rose from 32.8% in 1988 to 52.6% in 1995. The structure of export products was changed that electronics, information technology, machinery, electrical and transport equipment products more than 50% of total exports. Moreover, the substantial increasing in foreign investment began to become a net capital exporter, accumulated to foreign investment of $30 billion in 1995 that Taiwan and China increasingly had economic relationships.
The rapid growth of cross-strait economic and trade, China has become Taiwan's major trading partners and export of capital. The government in 1991 promulgated the
"Statute for Upgrading Industries" to promote the "Ten New Industries34" giving reduced investment tax and strengthening the national communications infrastructure, incentives and subsidies, research and development of new products. Moreover, the government tried to open free competition with foreign enterprises, and the Asia-Pacific Regional Operations Center plan announced in 1995 to promote the internationalization of the economy.
Taiwan's average GDP growth rate was 6.19% from 1960 to 1999, only after Korea of 53 GDP recorded countries. In the industrial structure (Table-6 The GDP accounted for the proportion of each industry), it had a dramatically difference. In agriculture, the proportion of the agricultural output value of GDP ratio was declined from 32.3% in 1951 to 2000 to 2.1%.
In industry, the proportion of the industrial output value was accounted for GDP ratio from 21.3% in 1951 to 45.5% in 1981, then down to 32.4% in 2000. The GDP ratio in the service
34蔡仰虔，《台灣經濟發展階段論》，2008 年 5 月 17 日。
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sector, the services industry had not been more than 50 % in 1981 to 65.5% in 2000. The GDP ratio is closely related to the industrial structure, thereby affecting the "Incubation",
"Maintaining", and "Recruiting" human capital work layout and the guidelines of the national competitiveness and development.
Table-6 The GDP accounted for the proportion of each industry
1951 1972 1981 1990 2000
Agriculture 32.3% 13.1% 7.3% 4.2% 2.1%
Industry 21.3% 38.9% 45.5% 41.2% 32.4%
Service
Sector 46.4% 48.0% 47.2% 54.6% 65.5%
Ref：吳聰敏（2003），《台灣經濟發展史》
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Section 2、The history of industrial development and personnel training The economy of Taiwan after World War II was operated through the import substitution, export-oriented development, the strategy of structural adjustment and liberalization restructures to ensure the national strength fast-growing. Furthermore, it created the
"economic miracle" in the 1970s and became the first of the "Asian Tigers". However, after the financial crisis of the 21st century followed with the internal friction circumstances of the Congress, the national and economic strength is much worse than in the past. Thus, in the face of foreign heavily human capital hunting, the government now energetically prevented the
"Brain Drain" expanded due to the closely triangular relationship the economy, industry and human capital. The history of industrial development and personnel training will be described as follows.
3.2.1 1950's-Mainly importing substitution
Taiwan was faced of the devastation brought by World War II, the situation of political instability, population growth; shortage of materials and rising prices, the economic development was extremely grim. From World War to the end of the 1950s, the main economic policies aimed at social stability and economic recovery with import substitution policies to restrict exports to stimulate the economic revival and development in a relatively short period. The government is relatively little focus on personnel training only use of a large number of the Chinese people under the autocracy system.
3.2.2 1960's- Export-orientation
The late 1950s, Taiwan's economy was stabilized and the government began to develop the industries which can increase exports and reduce imports to help improving the
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international balance .The development was focused on less investment, low technology, increasing employment, industrial self-production and the civil livelihood, such as textiles, food, cement, plastics, etc. As to the foreign trade policy, the government adopted the investment incentives, ordinance, the establishment of export processing zones and other methods to adapt export-oriented. Thus, it was gradually formed an open economic system and created the economic miracle, recruited the educated youth of the Japanese Era and the members of party loyalty during the KMT-Communist period.
3.2.3 1970's-The economic take-off period
The global financial crisis was occurred in 1971 and 1972. The food crisis and the oil crisis was in 1973 and the international economic situation upheaval leading the scene of economic stagflation in the industrial countries that have a tremendous impact on Taiwan's economy. The Taiwanese infrastructure was not complemented in the 1970 and the labor-intensive industries faced an energy crisis leading to the problem of rising wages, the industrial slump and high unemployment.
To revitalize the industry, the government began to aggressively cultivate the human capital. The government promoted the nine-year compulsory education to improve the people literacy rate and education level. In addition, Sun Yun-suan, the former Premier of the Executive Yuan, determined the development of the semiconductor industry by technology from the United States, actively improved the research and innovation environment, and increase the payment of technological R&D people. On the other hands, the government restricted exports, expanded imports and adjusted the economic policy in order to reduce the impact of the two oil crises. The original four-year economic construction plan was changed to the six-year economic
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construction design painting by the Ten construction projects to improve the industrial structure, promote industrial upgrading , agricultural modernization , transport facilities, the development of energy and marine resources, and the efforts of expanding foreign trade that the formation of the industrial system of heavy industry and light industry balance.
Technology, capital, personnel, and management are the four important factors in the development of high-tech industries; especially the human capital is the most important factor. In view of the government agencies subject to the statute of limitations, Sun Yun-suan ,the former Premier of the Executive Yuan, decided to establish the Industrial Technology Research Institute (ITRI), which engaged in the research and development of the application of technology to upgrade Taiwan's industrial technology.
Moreover, the institution selected 38 researchers to the RCA of the United States to accept semiconductor training in 1976 to set up the base of Taiwan high-tech industry.
The Information Industry Institute was established in 1979. The Industrial Technology Research Institute was established in 1982. The enhancement of training and recruiting senior talent program35 was set in 1983.The intention is to recruit the advanced technology industries and human capital.
The government would like to develop "two high, two low, and the two strategic industries" of a high degree of technology, high value-added, low energy density, low pollution levels, industrial linkage effects, market potential in 1978, implementation of the national ten major construction projects with large science parks36 to encourage
35 經建會，《人才培育方案》（行政院 2010 年 8 月 10 日院台教字第 09900041114 號函核定）。
36 Hsinchu Science-based Industrial Park site.The speaking of the 20th anniversary of the Hsinchu Science-based Industrial Park, the former National Science Council Director, Xu Yin-sho（徐賢修） reporting to the late President Chiang Ching-kuo（蔣經國）said that Taiwan Industrial reborn is to be made by the modernization of the industrial capacity. The Science Industrial Park has the multiple roles for the returning
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advanced degrees to participate and the defense reserved system. In addition, the post graduated institutes of management, engineering, agriculture, medicine were largely established by actively recruiting residing overseas scholars back to various universities and slowing the Brain Drain to strengthen the foundation the cradle of the semiconductor industry of the high-tech information industrial development. Then, under the leadership of the overseas scholars of Li Kuo-ting, Sun Yun-suan, Chao Yao-tung（趙耀東）, Morris Chang and Lee Yuan-tse, the Nobel entrepreneur Prize in Chemistry laureate, the high-tech industry earned the large foreign exchange for Taiwan, mass cultivation and high level human capital returning that improve the Taiwanese position in the world of creating an "economic miracle".
3.2.4 1980's-The economies transition
Under the pressure of U.S. trade protectionism in the early 1980s, the Taiwanese Dollar was forced to the sharp appreciation, followed by rapidly rising wages, land prices soared. Taiwan was transformed toward a free and open economy and began to encourage free competition that improved the market regulation mechanism and reduced the administrative intervention to achieve full play to the market mechanism and the rational allocation of resources. The purpose of the transformation policies was aimed to improve the competitiveness of the economy and efficiency. In the late 1980s, Taiwanese traditional industries with the rapid rise in the cost of production quickly moved to China and Southeast Asia to provide the space for high-tech industry development that stimulating the speed of industrial upgrading and the tertiary industry
of overseas technology professionals in politics. The system input was required for industries in the economics. In the domestic industrial manufacturing, the management and marketing can produce the inspiration opportunities. In education, it can promote the cooperative education, providing the school education and college graduates the challenging entrepreneurial and employment opportunities. In the defense consideration, it can be used for the high-tech design and manufacturing capabilities in the basic needs of the defense industry.
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developed rapidly. The high-tech industry has become a pillar industry of Taiwan. The technology-intensive products also become the new main items of exporting. In addition, Taiwanese economic base considerable offered by the technical and vocational education system, reached its height in the 1980s and the highest number of high school and vocational high school students had reached the ratio of 3 to 737. Learning by doing made the students not easily matched from the jobs and shortened the adaptation periods in the workplace that promoted the nurtures SMEs established.
3.2.5 1990's-The period of economic plan acceptance
To adapt to the changes by the domestic and international economic environment in the 1990s, Taiwan began to develop vigorously the economy to increase national income, capabilities for industrial potential, balanced regional construction and to improve the quality of life as the goal of the national economic plan. Furthermore, the government hoped to build Taiwan as the global logistics center and put more emphasis on the development of emerging high-tech industries.
The development of Taiwanese economic was transferred to capital-intensive and technology-intensive industries to promote the development of strategic industries of electronics, optoelectronics, aerospace, motor, and the chemistry of civil livelihood.
Moreover, the government adopted the policies to strengthen the use of high-technology HRD programs of the domestic industrial personnel professional capacity and specialist technical education, the expansion of the University and the Institute of Technology in Education, and pre-employment and job-training pipeline working engineers and technical staff in 1996. During Wu Jing（吳京） as the Education Minister, he enhanced the level of EFA vigorously to promote the Recommendation Entrance, repealing the
37 天下雜誌，《學歷與實作力脫鉤》，2008 年 11 月 19 日。
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Joint University Entrance Examination, expanding the universities, the five-year colleges restructuring to institutes of technology and universities of science and technology. This policy dramatically increased the number of students with college degree or above and made the future shortage of HRD and HRD contradiction.
3.2.6 2000'–The diversified economy plan
After 2000, with the varied and complex international situation, the development of the required human capital was toward the multi-direction. Taiwan was facing competition in the knowledge economy and the government hoped to enter into the international industrial supply chain by the knowledge force. The relevant policies of the government in recent years in terms of economic and personnel were as follows.
3.2.6.1 In 2002, "The Six-Year Development Plan38" started HRD of "E-generation HR cultivation plan" including "The international living environment creating", "The promotion of national English proficiency", "The universal GEPT", "Intensive English teacher qualification", "The universities Internationalization", "The foreign students importing", The digital learning environment establishing”, "The of civil servants, workers, farmers and fishermen, retired officers and soldiers of lifelong learning strengthening" of total NT 9.5 billion investment. In the view of the current talents dilemma, the government in promoting the effect of
"E-generation HR cultivation plan" not enough to create the foreign language environment to attract the foreign students. There still have space for improvement.
3.2.6.2 In 2003, "The Use of Scientific and Technological Personnel Training and
38 經建會，《國家發展重點計畫 2002-2007》。
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Program39" was focus on five strategies in HRD of "The strengthening and cultivating the HRD of university science and technology", "To strengthen industrial technology professionals training", "The actively recruiting the technology professionals overseas", "To promote the use of human capital exchange" and "The building a quality environment". The performance was slightly significant improved in terms of scientific and technological personnel training in-service education and training and University of science and technology cultivations". The rest has yet to be improved.
3.2.6.3 In 2006, "The major overall HRD nurturing and utilization program40" divided strategies into "The major supply and demand monitoring mechanism"; "The University Corporationilization"; "The establishment of professional schools";
"The development of features and functions segmentation of universities"; "The training priorities and cross-cutting talent"; "The cooperation of the schools and industries"; "To strengthen the digital learning"; "To strengthen the industry personnel technical training";"The enhancing vocational institutions and enterprises cooperation"; "To strengthen overseas HR recruiting"; "To exclude the overseas HR limitations" and "To build the appropriated research environment".
Nowadays, the recruiting efforts of building the overseas HR environment still need for improvement, and the other in the industry-university cooperation efforts should be closer to implementation of learning and training in parallel.
3.2.6.4 In 2007, the implementation of "The industrial labor plan41" was divided into nine
39 行政院科技會報，《科技人才培訓及運用方案》。
40 CEPA，《重點人才整體培育及運用規劃》。
41 CEPA，《2015 年經濟發展願景第一階段三年衝刺計畫》。
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key plans and four concepts of human development. First, the integration of existing HR information on supply and demand and timely adjustment of human resources strategy were illustrated. Second, the strengthening of the functional training and instant supplement industry technical work force were planned. Third, the development of the flexible educational system should fit the demands of the industry. Last, the relaxation of the personnel system and value-added cooperative synergy were required. After three years of implementation, the results were ineffective. The relevant units should be reviewed and improved to avoid the regeneration of HRD retention and the dilemma of recruitment.
3.2.6.5 In 2008, "The program of attracting the global foreign talents working in Taiwan42"
in order to recruit the international professionals was approved by the Executive Yuan to promote issued by "Three Priorities" of the foreign workers. However, the limited numbers of eligibility and the actual benefits still yet have efforts space.
3.2.6.6 In 2010, the government promoted the six new industries, the 10 priority promoting development of key service industries and four new smart industries and set "The personnel training program" that is still running. The implementation of the effect is still under inspection.
In summary, the performance of the personnel policies of Taiwan in the past spent the large budgets, but the most of them were over formality, ineffective implementation without actions, which caused facing a HRD crisis. However, the governments of the Hong Kong and Singapore reduce many procedures and adopt an order from the determination to the efficiency of the implementation of various personnel policies for HRD. Although the results
42 CEPA，《吸引全球外籍優秀人才來台方案》。
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of the personnel policies are not immediately effective, they must be long-term considerations for the implementation of personnel policies that should not be changed because of the policy-makers alternation as the political parties changed or anticlimactic. The ministries and departments should mutual assist and cooperate with each other, rather than the long carriage or rudderless. Thus, the policy was able to have the performance, continuation of consistent.
Furthermore, the well-being of the personnel policy implementation is crucial of national development due to the human capital could have creative and innovative abilities. The government should adopt a new thinking by destroying legislation determination to overcome this HR crisis to reverse the talent dilemma by three to five years. It is hoped that we can have the international human capital power again to increase our international competitiveness.