Chapter 2、The theory of globalization and human capital flow
6.1 The reasons of Taiwan's Brain Drain
6.1.4 Salary structure caused the adverse recruiting
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
In the past, Taiwan's industry policy focus mainly on high-tech industries. After China's reform and opening up in 1987, China offered Taiwan's SMEs including the manufacturing, electronic, and OEM industries three-year tax- free, rent-free, cheap labor among others to attract a large number of businessmen setting up factories. With the economic upgrading of China, living standards improved and the implementation of the Labor Contract Law, the Chinese government required the Taiwanese enterprises to upgrade equipment and production. The Chinese Communists asked the business to restructure and upgrade. As a result, rising wages and operating costs suppress the profit margin. Thus, the small-scaled Taiwanese enterprises had to turn to Vietnam, Cambodia and other countries with the cheap labor. In Taiwan, the enterprises are restructured slowly, resulting in the loss of market opportunities, the revenue reduced and the low salary levels. Moreover, the situations of the no pay leave and layoffs are occurred frequently. The companies do not want to nurture talents. This long-term vicious cycle caused the continued economic downturn that are unwavering to the talent recruitment and accelerate the "Brain Drain".
6.1.4 Salary structure caused the adverse recruiting113
When Singapore, Korea, Hong Kong and China took the talent competition as a war and significantly modified the national laws and policies, Taiwan repeatedly considered the highly paid talents as an injustice symbol that is harmful to the talent recruitment.
Moreover, the government is lack of talent hiring flexibility given the rigid promotion system. Take the salary structure of teaching and research as an example, the civil service system forces everyone to be equal so that the compensation level (Table-20
113 中國評論網，《朱敬一：台灣正面臨科研人才斷層危機》，2010 年 1 月 25 日。
‧
The salary comparisons of the professors in the Asian countries) is difficult to retain the high-level talents. The Asian countries offer high salaries to lure talents and research teams of the high-tech and financial industries away. These factors do not only accelerate the domestic high-end "Brain Drain", but also will seriously affect the long-term competitiveness of the country.
Table-20 The salary comparisons of the professors in the Asian countries
Country Taiwan Hong Kong Singapore China
Contents
Postdoctoral
research assistant of the Academia Sinica's Institute
Professor Professor Professor
Annual
Source: China Review Net, " Zhu Jing-yi: Taiwan is facing the faults crisis of scientific research personnel's", January 25, 2010.
6.1.5 The tax shortage114 is not conducive to the talent competition
In order to foster the industrial development, the tax was cut to boost the private investment in the past that introduced the Investment Incentive Ordinance (1960-1990) and the Statute for Upgrading Industries (1991-2009), Industrial Innovation Act (2010) to provide the domestic enterprises the tax concessions. In Asia, the Taiwan's business income tax was reduced from 25% (2007) to 17% (2010)115 , which is lower than that of China (33%), Korea (27.4%), Singapore (20%), Hong Kong (17.5%). Moreover, the
114 楊志良，台灣大崩壞（台北：天下文化），2012 年 4 月 27 日第一版，頁 85-86。
115 www.nat.gov.tw/investtaiwan
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
business effective tax rate is only 10% after deduction of annual 120 billion business tax concessions, which is even much lower than other countries.
In the past, the government promoted export-oriented development model during 1960-1980's in which foreign exchange control and tax cut were adopted to assist capitalists rapid accumulation of wealth through reinvestment and to create more job opportunities. This strategy did make the Taiwan's industries prosper. The average economic growth rate was 8% in 1991. From 1980 to 1990, the implementation of the ordinance by expanding the business tax concession to promote the industry lowered the economic growth rate to 5-6% in 1998. Afterward, the policy of the imputation tax concession contributed the economic growth rate swapping to 4% and even appeared -2.17% in 2001. A series of tax concessions did not help the economy much, but result in the national construction constricted and stretched. As the world economy was downturn, the enterprises took the pay freeze, layoffs and unpaid leave to save the cost.
The government reduced public expenditures, but increased the investment. Moreover, the government was short of effective talent policies to consolidate the existing talents to avoid a vicious cycle when all countries are luring them away by various incentives.
Thus, challenges of Brain Drain and loss of competitiveness in the future shall be a serious national concern.
6.1.6 The shareholder116 dividends limited the development of talent
Taiwan's high-tech industry would like to retain the talents through the system of paying the stock bonus to the employee so that employees do not have to purchase the stock to become shareholders of the company. It was a common practice to retain
116 蔡文達（2003），《員工分紅入股制度對高科技產業發展之影響》。國立雲林科技大學企業管理系碩士
班。
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
so-called "Hi-tech Elite" in high-tech information industries of TSMC, Foxconn, Media-Tek. The enterprises template the fresh graduated talents from top science and engineering with high salary, and then retained them with the stock bonus that reduced them the willing to study abroad for their further studying, which is detrimental to the development of Taiwan's high-tech industry. When the top engineers is paid the temptation who do not want to engage in the basic scientific research, study abroad, learning, innovation and entrepreneurship. These shortsighted talents are used by the enterprises, but not incubating, recruiting. These problems caused the recruiting by the high salaries and the phenomenon of the Brain Drain is frequent, that damage the business, industrial development and national competitiveness.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Section 2、The strategies of the government
Low birth rate and aging are challenges of advanced countries. Most of those countries tried hard to come up with national strategies to deal with. The fact of the "Brain Drain" and
"shortage of talent" will lead to national competitiveness negatively affected amid globalization and the WTO market opening trend and talents recruitment efforts by countries such as the U.S., Japan, Korea, Singapore, China and etc. The stagnant growth of the population117 will negatively affect economic growth, the labor shortage and aging problem.
The labor force of younger generation is needed in high-tech industries, information industries, the communications industries, E-commerce, cultural and creative industries, retail as well as entertainment industries, leisure and healthcare industries. If the population outflows are not to be improved, it will lead to high-level labor under-supply, recession and severe problems for the Taiwanese industries, which in turn lead to the decline of government revenue, the decrease of citizen savings and the weakening of country competitiveness.
"Human resources" could be divided into the "menual" type and "mental" type. The shortage of menual/physical labor can be solved by the introduction of foreign workers, but the brain drain is more difficult to solve. In order to solve the problems of the "talent shortage", the CEPD launched the personnel training programs and coordinated the ministries policies to enhance the manpower that government and industries need both quantitatively and qualitatively. The government hopes to make Taiwan as talents hub centers in the Asia-Pacific area. The responsive strategies to address talent plight include shortening the gap between learning and training, the program of economic momentum upgrading and the golden ten years are as follows.
117 楊志良，《台灣大崩壞（台北：天下文化）》，2012 年 4 月 27 日第一版，頁 51-52。
‧
6.2.1 The program for shorten the gap between learning and training118 6.2.1.1 To promote the employability of the students
It is focus on strengthening school education for industry needs, university-industry cooperation mechanism to keep the tide interactions between industry-academia and shorten the gap between learning and practicing.
6.2.1.1.1 With the dynamic of the industrial practice, flexible adjustment of the department programs
6.2.1.1.1.1 The grants to the colleges of the interdisciplinary degree and credits program (MOE).
6.2.1.1.1.2 To conduct the colleges adjusting the departments (MOE).
6.2.1.1.1.3 The practice courses of the R&D and the industrial technical fields (MOE).
6.2.1.1.1.4 The improvement of the vehicles practice courses of the technical colleges (MOE).
6.2.1.1.1.5 The practical monograph and campus entrepreneurship competitions for the technical and vocational students (MOE).
6.2.1.1.1.6 To encourage the technical colleges offering the integrated career courses to help students the job inauguration (MOE).
6.2.1.1.2 To encourage teachers practical learning and strengthening the practice teaching
6.2.1.1.2.1 To promote the teachers of the technical colleges learning and practicing in the public and private institutions (MOE).
6.2.1.1.2.2 To expand recruiting the instructors with the industrial experience (MOE).
6.2.1.1.3 To expand the internships and the industry-university collaboration
6.2.1.1.3.1 The personnel training special classes of the university-industry cooperation (MOE).
6.2.1.1.3.2 To promote the technical colleges opening internship courses out of the campus (MOE).
118 行政院 101 年 7 月 4 日院臺經字第 1010031641 號函核定。
‧
6.2.1.1.3.3 To promote the cooperation of the universities and enterprises to foster the International R & D Elite Program (MOE).
6.2.1.1.3.4 To provide the youth vocational training courses (the Council of Labor Affairs, CLA).
6.2.1.1.3.5 To increase the workplace competitiveness of the college students and linkage with workplace standards (CLA).
6.2.1.1.3.6 To promote students having the part-time work in the community during the summer vocation creating the career development concepts (Youth Commission).
6.2.1.1.3.7 To assist students in understanding the properties of public sector services to enhance vocational aptitude exploratory opportunities (The Youth Commission, YC).
6.2.1.1.3.8 To establish and convene the school mechanism to enhance the youth employment force (YC).
6.2.1.1.3.9 To promote the technical colleges and private universities to operate industry-academia module or internship project courses (NSC).
6.2.1.1.3.10 To strengthen the use of industry-university resources (The Ministry of Economic Affairs, MOEA).
6.2.1.1.3.11 To provide learning opportunities and experiences of students' practical operation through the Contest of the Cities Marketing Exhibition (MOEA).
6.2.1.1.3.12 To increase the competitiveness of the financial workplace for the college students in order to link with the workplace (FSC).
6.2.1.1.3.13 Training the pop talents (The News Bureau).
6.2.1.1.3.14 Training the talents of the public channel program production (The News Bureau).
6.2.1.1.3.15 To encourage the students of the Department of film in the practice learning (News Bureau).
6.2.1.1.3.16 To encourage the students of the construction-related department of wisdom green building interdisciplinary learning how (Ministry of the Interior).
6.2.1.1.3.17 To encourage the domestic public and private universities graduated students engaged in the research and development work of the energy and
‧
radiation applications (The Atomic Energy Commission).
6.2.1.2 To enhance the matching platform
It focuses on assisting the employment linking for the second expertise degree programs or on-the-job training to enhance the conditions of youth employment after graduation and shorten the adaptation period during the employment.
6.2.1.2.1 To encourage the students the vocational expertise internship and training to closely align with the industries after graduation
6.2.1.2.1.1 To handle the youth vocational training measures after leaving the schools (C LA).
6.2.1.2.1.2 To continuously promote the college and university graduates of internship (YC).
6.2.1.2.1.3 To promote the program of the second expertise bachelor's degree (MOE).
6.2.1.2.2 To foster the professional expertise’s upgraded in response to the different industry professionals
6.2.1.2.2.1 To strengthen the professional and technical capacities of the science park employees (NSC).
6.2.1.2.2.2 Training of the international business talents (The Economic Affairs, EA).
6.2.1.2.2.3 The sufficient industry professionals (EA).
6.2.1.2.2.4 To develop the high-level innovative talents (EA).
6.2.1.2.2.5 To enhance the financial talents the professional abilities (FSC).
6.2.1.2.2.6 To strengthen the film industry professional personnel training (The News Bureau).
6.2.1.2.2.7 Training the TV professionals (News Bureau).
6.2.1.2.2.8 Training the cable employing digital knowledge (News Bureau).
6.2.1.2.2.9 Training of the pop music talents (News Bureau).
6.2.1.2.2.10 The social worker job training mechanisms (The Ministry of Interior).
6.2.1.2.2.11 The wisdom of green building design and planning professional work force training (Ministry of the Interior)
‧
6.2.1.2.2.12 Long-term care professional manpower training (Department of Health).
6.2.1.2.2.13 To promote the tourist industry and academia excellent elites sophisticated expertise’s (Ministry of Transportation, MOT).
6.2.1.2.2.14 To strengthen the serving crew the professional training (MOT).
6.2.1.2.2.15 To cultivate the agriculture talents (The Council of Agriculture, Executive Yuan).
6.2.1.2.2.16 Aboriginal traditional art, the life wisdom and cultural heritage and creative R&D (The Indigenous Peoples Council).
6.2.1.2.3 To strengthen the multiple employment-oriented trainings to open up the employment pipelines
6.2.1.2.3.1 In-service education training (CLA).
6.2.1.2.3.2 The unemployed pre-training (CLA).
6.2.1.2.3.3 To assist the senior citizens employment (CLA) 6.2.1.2.3.4 To assist Veterans employment (Veterans Affairs).
6.2.1.2.3.5 To consult the Hakka Youth venturing, comprehensive training the various areas of industrial production and sales talents (The Council for Hakka Affairs).
6.2.1.2.3.6 To establish a lifelong learning society, planning the multiple courses (MOE).
6.2.1.3 Continual improving the quality of labor force
6.2.1.3.1 To strengthen its functions of the internship platform and properly guidelines for the workplace needs
6.2.1.3.1.1 To provide the platform of the universities or colleges in the job functions (MOE).
6.2.1.3.1.2 To provide the matching platform of the internship opportunities (MOE).
6.2.1.3.1.3 To provide the students opportunities of the multi-platform of the workplace (YC).
6.2.1.3.2 To provide the functions of match filtering to promote the employment opportunities.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
6.2.1.3.2.1 To assist the employers to recruit the required manpower (CLA).
6.2.1.3.2.2 To provide the VTC information platform (CLA).
6.2.1.3.2.3 To promote the cultural and creative industries and Information Service Platform (The Council for Cultural Affairs).
6.2.1.4 To strengthen the linking of the local personnel’s with international standards
6.2.1.4.1 To upgrade the foreign language capabilities, integrated with international environment
6.2.1.4.1.1 To strengthen the ability of foreign language and overseas internship experience (MOE).
6.2.1.4.1.2 To establish the technical colleges overseas internship programs (MOE).
6.2.1.4.1.3 English curriculums for the Exhibition (MOEA).
6.2.1.4.2 The introduction of the certification exam of the International Conference and Exhibition to strengthen the international standards (The Economic Affairs).
6.2.2 The program of economic momentum upgrading119
6.2.2.1 The combination of the industrial demands, improvement of technical and vocational education.
6.2.2.2 The development of human value-added industries and strengthening the convergence of the industry-university internships.
6.2.2.3 To promote the talent layout and to train the new industrial talents.
6.2.2.4 The timely adjustment of labor regulations in response to the industrial and social trends.
6.2.3 The Golden Ten Years120
6.2.3.1 The innovation of the science and technology
119 The Council for Economic and Planning.
120 The Executive Yuan.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
6.2.3.1.1 The transition innovation-oriented economic system.
6.2.3.1.2 Deepening the basis technological research and development.
6.2.3.1.3 The governance mechanism of the innovative science and technological decision-making.
6.2.3.1.4 Enhancing the effectiveness of scientific research value.
6.2.3.1.5 To construct the friendly environment for entrepreneurship.
6.2.3.1.6 Building the environment of giving the full scopes to the talents.
6.2.3.2 Promoting the employment
6.2.3.2.1 To promote the civil investments and develop the job opportunities.
6.2.3.2.2 To review the basic wage regularly in the implement the reasonable salaries.
6.2.3.2.3 To strengthen the industry-university cooperation, nurturing the talents of the knowledge economy.
6.2.3.2.4 Strengthening the human capital investment to enhance the employability and employment rate.
6.2.3.2.5 To create the friendly workplace for both family and work to promote the employment of women.
6.2.3.2.6 To shorten the statutory working hours, review the system of labor leave, and promote the two-day weekend.
6.2.3.3 The education innovation
6.2.3.3.1 Improve the capability of Chinese English.
6.2.3.3.2 The promoting the Chinese language education globally.
6.2.3.3.3 The 12-year basic education for the people.
6.2.3.3.4 Raising the level of university education and the promotion of educational internationalization.
6.2.3.3.5 The nurturing the economic needs of the knowledge-oriented talents and the implementation of value-added knowledge.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
In the aspect of the "Incubating talents", the higher education in Taiwan produced sufficiently high-quality talents and the grass-roots human resources, but they are not accepted by the enterprises. While those quality-poor schools have not yet been eliminated, numerous 5-year colleges were approved to be upgraded into the Universities of Science and Technology. Moreover, there is lack of the training and sustaining mechanism for the medal-winning students in the international science fairs. In addition, while humanity-oriented graduates were oversupplied in the market, the authority still repeatedly approves their enrollments without considering the needs of the business. Those are the paradoxical phenomenon of the higher education.
In the aspect of "Maintaining talents", academic reviewing mechanism pushed professors to not only focus on teaching but also publish paper preferably in English. Worse still is professors are required to be responsible for schools’ enrollment in most of private schools.
As a result, professors face low salaries, high pressure and no visions in the future, which depress current talents and push them away from working in Taiwan. The government should not repeatedly adopted short-term solutions to the unemployment problem such as "22K",
"57K" or "1000K" that turned out to be exploitation of talents by enterprises on one hand, and push talents to pursue government jobs on the other hand. The government should strengthen the coordination of the public sectors with the enterprises horizontally, and implement all the efficient policies, and strongly encourage the enterprises to raise the salaries of employees gradually, which combined can actualize the effect of maintaining talents.
In the aspect of the "Recruiting talents", the Government has implemented the "Flexible salary scheme", but it turns out to raise domestic professors’ salary, which seems to be contrary to the original purpose. Moreover, the comparatively low salary levels, restrictive laws, regulations, immigration policy, worse working conditions, and social welfare,
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
compared to those of neighboring countries or regions such as Singapore, China, Hong Kong make Taiwan lack of incentives to attract foreign investments. The government and industries have difficulties to attract the foreign professionals or overseas Chinese talents, which is the big issue for the government.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Chapter 7、The Conclusions and Recommendations
In 1959, Bogue stated "The population of push-pull theory" suggesting that the economic development will result in population movements. The flow of talents has become the norm in the international community. The very fact causes "Brain Drain" challenge. Moreover, because the advanced European countries suffered from European debt crisis, European domestic talents migrated to Asian countries. Therefore, the "Brain Drain" phenomenon made those countries very cautious of this wave of talent mobility and tried to retain talent and recruited foreign talent. Taiwan is no exception to this challenge. Facing the "Brain Drain" problem, the government began as early as 2000 to take some measures of containment and revitalization in the "incubation", "maintaining" and "recruiting" at work, especially in upgrading the level of research, innovation and technology to accelerate the industrial restructuring. The population policy of 2006 stated that the new human resources are made available to meet the needs of development of science and technology. However, Taiwan is still facing a greater Brain Drain challenge so that the effectiveness of the human resource policy is actually limited.
When other countries use high salary to lure the talents away, the government is simply left with no chips to retain or recruit talents. The only way out is to elevate the national soft
When other countries use high salary to lure the talents away, the government is simply left with no chips to retain or recruit talents. The only way out is to elevate the national soft