© IMD – International Institute for Management Development. Not to be used or reproduced without permission. IMD World Competitiveness Center (April 2013) Competitiveness Landscape 2012 & Opportunities to strengthen Taiwan’s Competitiveness Prof. Dominique Turpin IMD President

© IMD IMD IS A WORLD LEADER IN EXECUTIVE EDUCATION  Leading Global Business School -IMD ranked first in executive education outside the US and second worldwide (Financial Times ) -IMD ranked first in open programs worldwide (Financial Times 2012) -IMD’S MBA is ranked number one worldwide (Forbes, 2011)  60 Faculty members, over 300 employees  Open / Company-specific programs for executives  MBA and EMBA programs  The IMD World Competitiveness Center (WCC) Publisher of the annual IMD World Competitiveness Yearbook (since 1989) and pioneer in competitiveness

© IMD THE IMD WORLD COMPETITIVENESS YEARBOOK  59 ECONOMIES The most competitive nations  329 CRITERIA (2/3 hard data, 1/3 survey data) The emphasis on HARD FACTS ensures objectivity and transparency  54 PARTNER INSTITUTES Taiwan: Council for Economic Planning and Development  30 INFORMATION PROVIDERS Recognized international organizations/institutions (UN, OECD, WB, WTO, PWC, etc.) 3

© IMD THE WORLD COMPETITIVENESS SCOREBOARD 2012 (released on May 31, 2012) 4 THE 2012 WCY OVERALL RANKING Rank 2012 Rank 2011Country Score 2012 Rank 2012 Rank 2011Country Score Hong Kong Estonia USA Kazakhstan Switzerland Czech Republic Singapore Poland Sweden India Canada Lithuania Taiwan Mexico Norway Turkey Germany Spain Qatar Italy Netherlands Portugal Luxembourg Indonesia Denmark Philippines Malaysia Peru Australia Hungary UAE Brazil Finland Slovak Republic United Kingdom Russia Israel Jordan Ireland South Africa Austria Slovenia Korea Colombia China Mainland Romania New Zealand Bulgaria Belgium Argentina Iceland Ukraine Japan Croatia Chile Greece France Venezuela Thailand69.00 © IMD World Competitiveness Yearbook 2012 In grey: ↑In blue: ↓white: stable

© IMD Among the top-10 countries in overall ranking Strong entrepreneurial culture Resilience of the economy Talented workforce Attractive fiscal policy But also …  Export-driven countries facing an unstable global climate  Ageing of society is a concern TAIWAN / SWITZERLAND: WHAT WE HAVE IN COMMON? 5 © IMD World Competitiveness Yearbook 2012 covers 59 countries

© IMD REGIONAL RANKING: 4 ASIAN TIGERS 6 © IMD World Competitiveness Yearbook 2012 Ranks & scores in the 2012 overall ranking

© IMD COMPETITIVENESS BREAKDOWN 7 Domestic Economy International Trade International Investment Employment Prices Public Finance Fiscal Policy Institutional Framework Business Legislation Societal Framework Productivity Labor Market Finance Management Practices Attitudes & Values Basic Technological Scientific Health & Environment Education Economic Performance Government Efficiency Business Efficiency Infrastructure Overall Ranking

© IMD Ranks in WCY 2012’s main pillars of competitiveness TaiwanSingaporeHong KongKoreaChina Economic Performance Government Efficiency Business Efficiency Infrastructure COUNTRY COMPARISON IN THE 4 WCY FACTORS 8 © IMD World Competitiveness Yearbook 2012 (ranks out of 59 countries)

© IMD TAIWANESE COMPETITIVENESS LANDSCAPE © IMD World Competitiveness Yearbook 2012

© IMD Weakest Criteria # 59 Direct Investment flows Inward (low % of GDP) # 54 Exports of goods – growth (low % change based on US$ values) # 49 Part-time employment (low % of total employment) # 40 Tariff barriers (relative high % of tariffs on imports) * Out of 59 countries Strengths – Competitive advantages # 1* Social responsibility of business leaders is high (survey) # 1 Entrepreneurship of managers is high (survey) # 3 High-tech exports (46% of manufactured exports) # 4 Science in schools is sufficiently emphasized (survey) # 4 Adaptability of companies to market changes is high (survey) # 5 SMEs are efficient by international standards (survey) # 6 Venture capital is easily available for business (survey) TAIWAN: EVOLUTION & COMPETITIVENESS LANDSCAPE 10

© IMD PERCEPTIONS OF THE BUSINESS COMMUNITY: ATTITUDES AND VALUES 11 © IMD World Competitiveness Yearbook 2012 – Survey values are between 0 to 10.

© IMD CHALLENGES & OPPORTUNITIES FACING TAIWAN 12  Further diversify the economy and exports beyond the high-tech sector  Attract more foreign investment from the region  Further develop the financial system to benefit from the proximity of Hong Kong and opening of China ›Improve cross-Strait relations will generate more opportunities and investment flows from China  Continue to develop the basic infrastructure  Exploit strengths in technological infrastructure  Invest not only in tertiary education but also in all the levels including vocational education  Improve language skills ›Strengthen competitive advantages in innovative R&D and educational system  Economic Performance (factor I)  Infrastructure (factor IV)

© IMD  Knowledge Transfer  Efficiency & Ease of Doing Business  Country image / branding Increase the cooperation between large companies, research centers and SMEs Increase transparency and improve corporate governance in companies Further develop local brands for the domestic market and exports EXAMPLES OF GOLDEN RULES OF COMPETITIVENESS 13 WAYS TO REINFORCE COMPETITIVENESS

© IMD CLLABORATIVE OPEN Sustain competitive strengths Target weaknesses for improvement Seek new opportunities & niches Prosperity Attractiveness (FDIs) Health Expenditures Education (primary & secondary levels) Dynamism Technological & scientific infrastructure Innovation – R&D New export niches Skilled labor force First-class talent & Education Investment incentives SUSTAINABLE COMPETITIVENESS ROADMAP 14

© IMD High degree of positive correlation between the WCY Overall Competitiveness and the criterion on “Management Education”. NATIONS ALSO COMPETE WITH BRAINS COMPETITIVENESS / MANAGEMENT EDUCATION 15

© IMD CLLABORATIVE OPEN INTERESTED IN WORLD COMPETITIVENESS? 16 Find out in May 2013 Rank 2013?

© IMD CLLABORATIVE OPEN IMD : IMD World Competitiveness Center: Subscribe to the free WCY «Criterion of the Month» (WCC webletter) by sending an to: THANK YOU FOR YOUR ATTENTION MORE INFORMATION? 17