Why Taiwan suddenly needs 400,000 foreign workers for critical sectors, including hi-tech
- Island looks to inject considerable talent into pillar industries in the face of a shrinking labour pool, few births and a population that keeps getting older
- Taiwan saw a 5 per cent decline in total foreigners from 2020 to 2021, and some say more could be done to make island expat-friendly
Taiwan will try to attract 400,000 mostly white-collar foreign workers over the next decade to support the island’s pillar industries, including hi-tech, as the domestic population gets smaller.
National Development Council head Kung Ming-hsin said at a forum in Taiwan on Tuesday that the island needed that many foreign workers to fill all of the jobs created by changing industry demands in the midst of a shrinking talent pool due to low birth rates and an ageing population.
“This sounds like the right direction,” said David Chang, secretary general of the Taipei-based non-profit organisation Crossroads, which arranges events for new arrivals to Taiwan.
“There is a talent shortage that’s growing in urgency,” he added. “This is even a question about national security and where our soldiers are going to come from if we have a shrinking population.”
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A total of 792,401 foreigners held Taiwan residency permits as of late 2020, as many expats were lured by the island’s lack of a Covid-19 outbreak – an outlier in the world at that time. But as cases crept up, that total dropped by 5 per cent in 2021, to 752,900 foreigners, according to official figures.
Taiwan is seeking out talent in seven industries that are key to its economic growth, Kung said at the forum. The sectors are “intelligent” machinery, the creation of a Silicon Valley for Asia, biomedicine, green energy, defence, modern agriculture and the circular economy.
Taiwan’s population, which now stands at 23.19 million, will go into negative growth by 2031, officials have warned. On average, Taiwanese women today give birth to less than one child each, down from seven in 1951. As childcare costs go up, more women pursue careers, and family dynamics have shifted in recent decades.
An ageing population will further curtail the talent pool for businesses that are seeking talent, Kung said.
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Other Asian societies such as Hong Kong, Japan, South Korea and parts of mainland China face the same population pressures.
“Falling working-age populations will cause economic growth to slow unless you can raise productivity growth,” said Gareth Leather, senior emerging Asia economist with Capital Economics in London. But this is “much harder” for regions such as Taiwan, “which already operates at the edge of the frontier”.
Some are already eager to follow the National Development Council’s agenda, said Kent Chong, a legal partner with professional services firm PwC in Taipei.
Advanced internet start-ups such as tourism websites often recruit white-collar labour from Southeast Asia because they understand the region’s active travel market, Chong said.
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Taiwanese firms often hire foreign workers if trying to expand offshore, he added, and may find talent among the foreign graduates from local universities. A manufacturer might take a Vietnamese graduate to help with its Vietnam operations, he said.
To attract more white-collar talent, the government should make it easier to get work permits, Chong said, as it is currently not “straightforward”. Taiwan today requires minimum capital requirements and minimum education levels for foreigners to be hired locally.
Expatriates do not always qualify for economic stimulus or disability insurance, even if they pay taxes in Taiwan. Taiwanese institutions may harbour a “distrust of foreigners” based on perceptions that they won’t stay long, said Chang with Crossroads.
“There are a lot of tax issues, language issues,” he said, advocating for more immigrant access to banks and kindergartens. “It’s not exactly the most friendly place to do business.”
Many foreigners stay in Taiwan – regardless of any legal barriers – because of nighttime street safety, the pace of life, and personal connections such as marriage to locals, Chang said.
“It’s usually the emotional connections that we hear about,” he said.
Tom Fifield of Melbourne moved to Taiwan in 2013 to work as community manager for the OpenStack Foundation, which backs the cloud computing platform OpenStack.
“It’s incredibly convenient and offers a surprisingly diverse range of holiday opportunities, despite its small area relative to my native Australia,” he said of Taiwan.
“I drove around the island [in August], and unexpectedly stumbled upon two cultural festivals in a week. Arriving in a small town five minutes before the main road is shut for the annual water fight is just the kind of thing that happens here.”
The question is whether [Taiwanese people] would be happy to accept immigration on such a large scale
Banking glitches, including multiple visits to physical branches, and denial of online services, rank among the top headaches for foreigners in Taiwan, Fifield said.
Taiwan will have no problem attracting 400,000 workers, said Leather with Capital Economics, given the “huge” underemployed populations of South Asia and Africa.
“The question is whether [Taiwanese people] would be happy to accept immigration on such a large scale,” he said. “It has been shown to be very unpopular in Hong Kong and Singapore. I think it is more likely that these countries will just accept that they will grow at a slower pace than they otherwise would.”
