0 Economic Development Vision for 2015 Stage I: Three-year Sprint Program (2007-2009) Industrial...

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Economic Development Vision for 2015

Stage I: Three-year Sprint Program (2007-2009)

Industrial Development Package

Mr. Steve Ruey-Long Chen

Minister, Ministry of Economic Affairs

October 31, 2006

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Briefing Outline

I. Introduction

II. National development goals and vision

III. Current major economic policies

A. Building a superior investment environment

B. Initiating a new era of industrial

developmentAppendix: Key industrial development goals:

—Manufacturing industry

—Service industry

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I. Introduction

The Executive Yuan has reviewed and overhauled the country's socioeconomic framework and developmental direction in response to the rapidly changing socioeconomic environment, both in Taiwan and overseas.

With a "prosperous, just, sustainable, and beautiful Taiwan" as its new vision for national development, the government plans to implement a National Development Package Program in three stages, each lasting three years. This program is the government's systematic development blueprint for the period of 2007 to 2015.

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Accordingly, the MOEA has formulated the "Stage I: Three-Year Sprint Program － Industrial Development Package Program" in accordance with the Executive Yuan's two administrative priorities of “big investments" in Taiwan and caring for the disadvantaged through a policy of “big warm."

The MOEA will focus its efforts on the two flagship programs of "Building a Superior Investment Environment " and "Initiating a New Era in Industrial Development," and hopes to achieve the per-capita GDP goals of US$20,000 by 2009 and US$30,000 by 2015.

I. Introduction -continued

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Vision

Development goals for 2015

Goals2005 2015

Industrial structure ( ％ )

Agriculture 1.7 1.2

Industry 25.0 22.7

21.4 20.0

Services 73.3 76.2

Real growth rate

( ％ )

Agriculture -8.1 1.0*

Industry 5.9 3.9*

Manufacturing 6.5 4.3*

Services 3.5 5.5*

* Note: The growth rates of industries in 2015 are the average growth rates from 2005 to 2015.

5% average annual economic growth &US$30,000 per capita GDP

A prosperous, just, sustainable,

and beautiful Taiwan

II. National Development Goals and Vision

Manufacturing

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Development goals for 2009

2005 20091. Industrial structure ( ％ )

Agriculture 1.7 1.5

Industry 25.0 24.1

Manufacturing

21.4 20.8

Services 73.3 74.4

2. Real growth rate ( ％ )

Agriculture -8.1 1.0*

Industry 5.9 4.2*

Manufacturing6.5 4.9*

Services 3.5 5.5*

3. Energy efficiency

1. Energy productivity (NT$/1 liter oil equivalent)

108.7 116.3

2. Energy intensiveness (1 liter oil equivalent/NT$1,000)

9.2 8.6

* Note: The listed growth rates of industries in 2009 are the average growth rates from 2006 to 2009.

US$20,000 per capita GDP

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1. Promoting high-value output in all industries;

upgrading industries across the board.2. Promoting Taiwan brands; creating profit

via product differentiation.3. Integrating manufacturing and services,

boosting industrial capacity. 4. Improving energy efficiency, pursuing a

win-win situation for energy, industry, and environmental protection.

5. Emphasizing social justice and balanced industrial development.

Concepts

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Building a superior investment environment

Building a superior investment environment

◎ Providing land on preferential terms

◎Ensuring an ample labor supply

◎Providing funding assistance

◎Development of emerging industries

◎Industrial upgrading and transformation

◎Balanced industrial development

Initiating a new era in industrial development

Initiating a new era in industrial development

◎Establishing mechanisms for encouraging private investment

◎Improving efficiency of the environmental impact assessment (EIA) process

III. Current major economic policies

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Providing land on preferential terms

Providing land on preferential terms

Ensuring an ample labor supply

Ensuring an ample labor supply

Providing funding assistance

Providing funding assistance

Improving the efficiency of the EIA process

Improving the efficiency of the EIA process

Establishing mechanisms for encouraging private

investment

Establishing mechanisms for encouraging private

investment

A.Building a superior investment environment

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1. Providing land on

preferential terms

Extending and expanding

Stage 2nd

006688 measures

Assisting expansion onto

adjacent non-urban land

Assisting in zoning changes

of areas with unregistered businesses

Strengthening industrial parks

and industrial infrastructure

Release of Taisugar land.

4 years free and 6 years half-

lease for government land

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2. Ensuring an ample labor supply

Improving the working environment and increasing

willingness to workReviewing foreign worker policies

Establishing consultation

platforms

Allowing foreign workers to take up undesirable jobs and shift work

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3. Providing funding assistance

Strengthening credit guarantees for SMEs

National Development Fund investment in traditional industries

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4. Improving the efficiency of the Environmental Impact Assessment (EIA) process

Strengthening policy EIAs

Improving review of individual EIA cases

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5. Establishing mechanisms for encouraging

private investment

Joint recruitment by local and central governments

Establishment of a single service window

Elimination of investment barriers through inter-agency efforts

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B. Initiating a new era of industrial development

◎Broadband wireless and related services◎Digital life◎Healthcare◎Green industries

Development of emerging industries

Development of emerging industries

◎Agriculture◎Manufacturing◎Services 　

Industrial upgradingIndustrial upgrading

◎Assisting weaker industries◎Assisting localized industries◎Assisting SMEs

Balanced industrialdevelopment

Balanced industrialdevelopment

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Green industries

Healthcare

1. Development of emerging industries—An overview of tomorrow’s industries

Source: MIC research report, Institute for Information Industry, Sep. 2006

　　Year

Item Broadband wireless and

related services

Digital lifeHealth-

care

Green industrie

s

2009 US$billion 4 20 10 6

NT$billion 128 640 320 192

2015 US$billion 36 83 18 20

NT$billion 1,152 2,656 576 640

Broadband wireless and related services

Projected output growth of emerging industries

Digital life

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2. Industrial upgrading and transformation —Manufacturing

Item 2005 (actual)

2009 (target)

Manufacturing output value (NT$ trillion) 11.7 14.0

Manufacturing GDP(NT$ trillion) 2.4 3.0

Manufacturing labor productivity (NT$ million/person)

0.98 1.24

Development vision

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Specific Measures (1)

From cost-cutting to creation of

value

Relying on mainstay industries to further the development of linked up-, mid-, and downstream industries

Mainstay industries promote the

development of related industries

Fostering brand value

“Taiwan Brand Development Program”

From process innovation to product innovation

From single devices to system integration

Improving the competitiveness of the display industry

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Improvement of the Chinese Petroleum Corp.’s refining structure and upgrading of the Third Naphtha Cracker

Upgrading of equipment at China Steel

Upgrading of basic

industrial equipment

Joint R&D and marketingFunding assistance (“Credit Guarantee Fund Firefly Program”)

Example: China Steel donated NT$20 million.

Large enterprises

provide assistance to linked

SMEs

Use of best available technologies (BAT)

(1) Improvement of energy efficiency and productivity

(2) Improvement of pollution control(3) Maintenance of local employment and

development


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2. Industrial upgrading and transformation － Service Industries

Item 2005 (actual) 2009 (target)

Nominal service GDP(NT$ trillion)

8.2 10.3

Employment in services (million persons)

5.793 6.327

Service labor productivity (NT$million/person)

1.414 1.628

Development vision

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Deregulation,Reinforced

oversight

Applying technology to services

Full-scale review of laws and regulatory systems affecting the development of services in line with the principles of using “a negative list and reinforced oversight.”

Using new technology to boost innovative services in finance, telecommunications, logistics, and tourism & recreation.

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Striving for service

innovation

Implementing service quality

certification

Promotion of outstanding DIT (Designed in Taiwan) projects.

Movie industry stimulus program.Strengthening service and product R&D.Provision of R&D subsidies for innovation services.

Improving service operating capabilities and service quality.

Full implementation of existing certification systems

Study and planning of quality certification systems for other services


Assisting in raising capital

Establishment of non-tangible-asset appraisal mechanisms.

Implementation of Preferential Loans for Promoting Service Industry Development.”

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3. Balanced industrial development

SME development vision

2005 2009

1.35 million SMEs in Taiwanearn over NT$13.8 trillion and

employ more than 7.99 million persons

1.35 million SMEs in Taiwanearn over NT$13.8 trillion and

employ more than 7.99 million persons

Vision,strategies and goals for 2009

1.23 million SMEs in Taiwan earn over NT$10 trillion andemploy more than 7.64 million persons Goals

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Specific measures

Assisting weak

industries

Guidance for SMEs

Guidance for local

industries

Developing and diffusing common technologies and materials.

Promotion of MIT certification; enhancement of image of products with common marks.

Strengthening product labeling to prevent poor-quality foreign goods from damaging local markets.

Use of a trade relief mechanism to assist ailing industries.

Guidance for distinctive local industriesEstablishing special zones for specific traditional

industries; promoting the formation of clusters.

Incubation of innovation and value-addedNarrowing the digital gap among industriesHelping SMEs improve quality

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Thank You!

We welcome your comments and

suggestions

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2005 (actual) 2009 (quantitative targets)

2009 (qualitative targets)

Sem

icon

du

cto

rs

1. Output value: NT$1.1 trillion2. 12" wafer fabs: 10

1. Output value: NT$2 trillion 2. 12" wafer fabs: 18

1. The world’s lowest memory production costs; the world’s best manufacturing efficiency.

2. Taiwan will be a global center of contract chip manufacturing and the world leader in 45 nm process technology.

3. An environment facilitating SoC design will boost design performance.

Fla

t Pan

el D

isp

lays

1. Output value: NT$927 billion

2. 5th~6th generation plants: 11

1. Output value: NT$1.6 trillion 2. 5th~6th generation plants: 133. 7.5th generation plants: 3 4. 8th generation plants: 1

Taiwan will be a major world center for flat-panel display production and R&D.

Bio

tech

nolo

gy

1. Sales revenue: NT$160 billion2. Global market share of drug injection and emergency breathing products in excess of 30 ％ .

1. Sales revenue: NT$224.3 billion

2. Global market share of drug injection and emergency breathing products in excess of 50 ％ .

3. One large manufacturing facility each for human vaccines and pharmaceuticals.

1. Taiwan will be an important link in the international biotech R&D and commercialization chain.

2. Taiwan will be a value-added logistics and production center for medical equipment.

Petro

ch

em

icals

1. Output value: NT$1.2 trillion2. Ethylene production capacity of 3 million tons. World ranking: 12th

1. Output value: NT$1.5 trillion2. Ethylene production capacity of 4.2 million tons. World ranking: 8th

1. Taiwan will be self-sufficient in chemical materials needed by high-tech industries. 2. Taiwan will have an ethylene self-sufficiency of 92%.

Ste

el

Output value: NT$909.2 billion

Output value: NT$1.1 trillion Taiwan will have a tight-knit up-mid-downstream industrial chain, and will independently produce small-batch, large-variety high-end steel products, creating competitive advantage.

Textile

s

1. Output value: NT$468 billion (including artificial fiber)

2. Ratio of apparel, household furnishing, and industrial use: 70:10:20.


2. Ratio of apparel, household furnishing, and industrial use: 60:20:20.

Taiwan will be a major global supplier of functional textile products.

Appendix: Key industrial development goals—Manufacturing

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Mach

inery


2. Global machine tool ranking: 5th

1. Output value: NT$1.1 trillion2. Global machine tool ranking: 4th

1. Machine tool industry: Taiwan will be the world’s third biggest machine tool producer and exporter.

2. Machinery parts and components industry: Taiwan will be the world’s third biggest general-purpose parts and components producer.

3. Taiwan will be the world’s leading supplier of flat panel process and baking equipment.

Comm

unica-tions

1. Output value: NT$246.9 billion

2. WiMAX beginning to emerge worldwide

1. Output value: NT$550 billion2. Taiwan is the world’s WiMAX equipment leader in terms of output value

1. Taiwan will have a convenient mobile broadband communications environment.

2. Taiwan will be a broadband wireless solutions exporter.

Au

to E

lectro

nic

s

Output value: NT$46 billion Output value: NT$85 billion 1. Taiwan will be the leading aftersales service supplier in the global auto electronics market.

2. Taiwan’s companies will be part of the supply chains of international auto manufacturers and top-level OEM suppliers.

Gre

en

En

erg

y


(1) Photovoltaic energy: NT$7

billion(2) Solar water heating

systems: NT$1 billion(3) Wind generation:

NT$120 million(4) LED lighting: Domestic

output of roughly NT$1 billion （ global market share

of 2 ％ ) (5) Refrigeration and air

conditioning: NT$57 billion


(1) Photovoltaic energy: NT$50 billion

(2) Solar water heating systems: NT$1.45 billion

(3) Wind generation: NT$1.96 billion

(4) LED lighting: NT$8 billion(5) Refrigeration and air

conditioning: NT$95 billion

An up-, mid-, and downstream industrial chain will be established.

1. Photovoltaic energy: Taiwan will develop upstream silicon materials and silicon crystals, midstream photovoltaic batteries and modules, and downstream PV system applications.

2. LED lighting: Taiwan will develop upstream light sources, midstream optoelectronic lighting modules, and downstream lamps.

3. Wind generation: Taiwan will develop and produce key components including turbine blades, gearboxes, generators, and control systems.

4. Refrigeration and air conditioning: Taiwan will develop and produce key parts and components for refrigeration and air conditioning systems.

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Fin

an

cia

l serv

ices

1. Output value: NT$1.2 trillion2. Average employment: 404,000 persons

1. Output value: NT$1.5 trillion2. Average employment: 420,000 persons

The financial industry will enjoy sustainable growth, profitability, and sound competitiveness. Thanks to a healthy overall financial environment, consumers and investors will feel confident, secure, and satisfied. The industry will provide financial intermediary services and financial services for the industrial sector to promote economic growth and develop the financial industry.

Log

istic

s

1. Wholesale and retail sales value: NT$2.2 trillion2. Total wholesale and retail sales employment: 1.77 million persons3. Logistics: Stocking and storage costs account for 4.6% of GDP

1. Wholesale and retail sales value: NT$2.6 trillion

2. Total wholesale and retail sales employment: 1.83 million persons

3. Logistics: Stocking and storage costs account for 4.3% of GDP

The industry will realize the principles of “taking knowledge innovation as the foundation for service” and “using knowledge to create added value” in providing fast, on-time, and convenient services.

Health

care

1. Output value: NT$696.2 billion2. Employment: 214,000 persons


2. Employment: 242,000 persons

Taiwan will improve medical service quality and make full use of information technology to invigorate the medical information industry, and establish a secure environment for medical services which will better meet international standards. The ideal of “a patient walks in, a healthy person walks out” will be realized. Taiwan will enjoy a reputation for superior medical care.

Tele

com

mu

nic

atio

ns

Total output value: NT$377 billion1. Mobile telephony: NT$220.2 billion2. Fixed line: NT$41.5 billion3. Internet and value-added: NT$49.4 billion4. Line leasing: NT$26.8 billion5. International phone calls: NT$25.8 billion6. Long distance phone calls: NT$13.3 billion

Total output value: NT$430 billion 1. Mobile telephony: NT$260.7 billion2. Fixed line: NT$27.5 billion3. Internet and value-added: NT$71.7 billion4. Line leasing: NT$30.7 billion5. International: NT$26.0 billion6. Long distance: NT$13.4 billion

40% of Taiwan’s population will have access to 30Mbps broadband service.

Appendix: Key industrial development goals—Services

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Tou

rism

Total income from tourism: NT$356.1 billionNumber of tourists:Foreign visitors: 3.37 millionDomestic tourism: 92.61 million trips

Total income from tourism: NT$448.3 billionNumber of tourists: Foreign visitors: 5.20 million person-times (including Type 1 tourists from China) Domestic tourism: 120 million trips

Taiwan will be one of Asia’s leading tourist destinations.

Info

rmatio

n s

erv

ices

1. Sales revenue: NT$211.8 billion

2. Cumulative CMMI certification of 26 companies, world ranking of 8

3. Exports: NT$26.2 billion4. One of Taiwan’s ERP firms is

among the top five information

service companies in the Asia-Pacific region.

1. Sales revenue: NT$318 billion2. Cumulative CMMI certification of 85 companies, world ranking of 53. Exports: NT$64 billion4. Taiwan will have at least two information service companies ranked among the top three firms in their fields in the Asia-Pacific region.

Taiwan will be a leading information service supplier in specific fields.

Desig

n s

erv

ices


2. Exports: NT$20.1 billion3. International: Taiwan’s

designers have received a total of 182 major design awards.


2. Exports: NT$40 billion3. Taiwan’s designers will

have received 550 major

international design awards.

1. Innovative design will boost industrial

competitiveness. 2. Design services will thrive.

R&

D s

erv

ices

1. Sales revenue: NT$104.0 billion2. Employment: 45,000 persons

1. Sales revenue: NT$144.2 billion2. Employment: 55,000 persons

1. Taiwan will promote the effective diffusion and utilization of R&D results. 2. Taiwan’s R&D service capacity will be considerably greater. 3. Taiwan will have a universal

IPR management system in place.

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2005 (actual) 2009 (quantitative targets) 2009 (qualitative targets)

Dig

ital C

on

ten

t

1. Output value: NT$290.2 billion2. Domestic animation: 1/year3. Domestic games: 1/year

1. Output value: NT$515.0 billion2. Domestic animation: 5/year3. Domestic games: 6/year

Taiwan will serve as an Asia-Pacific digital content design, development, and production center.

Pop

ula

r Cu

lture

1. Major flagship movies produced through international cooperation: 0

2. HDTV and second single frequency network broadcasting system coverage: 0 ％

3. Output value of printed material: NT$58.2 billion

4. Output value of popular music: NT$31.6 billion

1. Major flagship movies produced through international cooperation: at least 5

2. HDTV and second single frequency network broadcasting system coverage: 85 ％

3. Output value of printed material: NT$59.3 billion

4. Output value of popular music: NT$44 billion

Taiwan will train a workforce geared towards movies/TV, publishing, and popular music. There will be a sound environment for the development of popular culture, and a thriving domestic consumer market. This will stimulate Taiwan’s consumer market and promote international recognition of Taiwan’s consumer tourism, clothing and other consumer products.

En

viro

nm

en

tal P

rote

ctio

n



Taiwan will enjoy greatly-improved environmental quality, and will adopt sustainable development as a basic planning principle. Taiwan’s environmental protection services industry will enjoy considerable growth.

En

gin

eerin

g a

nd

Man

ag

em

en

t Con

su

lting



Taiwan will provide globally competitive engineering and management consulting services.

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