Invest in TaiwanDepartment of Investment Services, MOEA
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The Omron (Taiwan) Co. has been doing business in Taiwan for 18 years. Despite negative growth in revenue in 2001 due to economic recession, the company's revenue has been steadily growing over the years. Chairman Hara, with a background in sales, is experienced in working in the " Chinese circle." In his opinion, Taiwan is the best fit for Japanese investment because there are many skilled professionals in research and development (R&D). He also commends the potential and vitality of Taiwan's market. It is easy to convey the company's concept of marketing operations to Taiwan's market.
The Omron Group, a multinational high-tech enterprise group leading in automation and information technology, was established in 1933. It's business includes industrial automation, office automation, social public system automation, consumer electronic components, automotive parts, and medical equipment. Omron branches spread over 26 countries, and it has approximately 24,000 employees.
Chairman Hara has been working within the Omron Group for 36 years. He recalls the operating environment of Taiwan when he first came to establish the branch. At that time, Taiwan had just become a newly industrializing country. The economy took off, and industries grew at a remarkable pace. Taiwan had a great potential for market development, production, and branch setups. Furthermore, the Taiwanese were friendly to the Japanese, and they shared similar working attitudes. Thus, Taiwan was an ideal country for Japanese companies to invest in. There was another reason for their decision. Jeffrey Koo, chairman of the China Investment Trust Co. at that time, was one of the partners. With Koo's assistance, Omron (Taiwan) Limited Co. was established in 1987 to start operations and marketing.
Labor cost in Taiwan was relatively cheap 18 years ago. Omron (Taiwan) built a manufacturing plant in Nankan and hired almost 200 workers. As the economy grew, Taiwanese's income creased accordingly. However, after the Chinese market opened up in the mid-1980s, the operating environment in Taiwan changed considerably. In order to reduce labor cost, Omron (Taiwan) shut down the Nankan plant and moved to China. Currently, the major investment of Omron (Taiwan) is in marketing services, including organizational expansion, equipment, marketing, maintenance/ repair, and post-sales services. Chairman Hara values the potential of the Taiwan market. For foreign businessmen, Taiwan is the base for advancement into Mainland China. Chairman Hara also views Taiwan as a "test market." In other words, if his company develops a product in Taiwan, it is easier for the Chinese to accept the product. Although some domestic and foreign companies move to China now, they still require the experience of Taiwan's market as well as its professionals and technological support. Therefore, Hara thinks that it is advisable for a company to root deeply in Taiwan first and then advance into China.
Chairman Hara gives an example based on his experience as a top executive in Omron's China branch. Many Taiwanese and foreign companies have hired Taiwanese as mid-level managers because they excel in operations management and run businesses smoothly. Chairman Hara says the Chinese are actually specialized in certain professional areas. Many of them can speak Japanese fluently. However, in terms of the "concepts of business operation " their marketing concepts are not very mature. The Chinese need to strengthen their know-how, and it is very important for them to hire Taiwanese to carry out business operations.
Chairman Hara further explains "concepts of business operation." To a manufacturer, it starts with product development, production, and then sales and marketing, meeting customer demand in the market, and finally facing competitors. Thus, it is imperative to understand what customers want. If a product cannot satisfy customers' needs, it is useless. Taiwanese managers recognize the importance of satisfying customers' needs, and that is where Chinese businessmen are lacking. Additionally, the turnover among Chinese workers is very high, which is a headache for top management.
When asked if his company would invest more in Taiwan, Chairman Hara says that he would select Taiwan if he had the authority to make the decision. Taiwan is the leader in R&D and innovation in both the semiconductor and the TFT-LCD industries. Therefore, he would select Taiwan as a base for R&D and innovation. In fact, many international companies choose Taiwan as an R&D and innovation base.
How do we enhance the competitive advantages of the Taiwan investment environment? Chairman Hara suggests that: Most importantly, a steady plan is required to educate and train excellent professionals in various areas. If "professional experts" is the advantage of Taiwan's economy and international trade, then the Taiwanese government should plan to educate and train professionals in various areas. Chairman Hara points out that, "There are three levels of expertise required for manufacturing industries. People with such advanced degree as Ph.D.s or Masters should be in charge of R&D, management, strategic execution, and so on. For the next level, marketing professionals are needed for sales and technical support. The experts on the assembly line are the third-level personnel required. Due to Taiwan's unique industrial infrastructure, its semiconductor and TFT-LCD industries are very active. In manpower training, these industries focus on personnel with advanced degrees. However, these information technology (IT) industries also hire thousands of skilled workers, and this exhausts the pool of excellent professionals. Our company often faces the dilemma of not being able to find skilled workers." Therefore, a balanced plan is needed to train professionals as well as to cover the development of the whole industrial structure.
A "patent system" is another of Chairman Hara's recommendations for Taiwan. He thinks Taiwanese companies have shown the ability to respond flexibly in the areas of production and sales. By paying more attention to R&D, patent application, and patent enforcement/monitoring, Taiwanese enterprises would find their competitiveness greatly enhanced. Taiwanese enterprises should increase their international patent research, recognize existing patents, and devote more resources to R&D and to applying for their own patents. "Patents are important indicator of advancing technological capability. Understanding patents can help you protect yourself and compete with your competitors," says Chairman Hara.
Additionally, Chairman Hara commends the Ministry of Economic Affairs for implementing a policy of increasing the local content of domestically manufactured TFT-LCD equipment to 50 percent. Currently, Taiwanese enterprises import most manufacturing equipment.
Chairman Hara came to Taiwan last April. Although he has been working in Taiwan for less then one year, he promptly understood Taiwan's investment environment and industrial problems from his eight-year experience in the "Chinese circle." Given his background in sales, he was asked to assess the future of Omron (Taiwan). He noted that his goal is to transfer the successful experience of Omron (Taiwan) to other parts of the "Chinese circle." He will also emphasize fairness, a cheerful working environment, and speed/efficiency. A cheerful working environment means that employees love to come to work. Many Omron (Taiwan) workers said that Chairman Hara is extremely personable. He is very personable, likes to communicate, and laughs frequently. A happy manager creates a delightful work environment. Although work is not necessarily easy for him, his laid-back attitude and cheerful manners should help increase revenue. The slogan of Omron (Taiwan) is "work fulfills life and creates a beautiful world." The corporate philosophy is "Let machines do what machines can do. People should be devoted to creative work."
The Omron Group contributes to the industrial development of Taiwan. The development of electronic and information technology in the 21st century should help reach the harmonious "optimal society" of man and machine. Omron (Taiwan) hopes to be a courageous enterprise that contributes to the technological development of Taiwanese society.
In response to Chairman Hara's suggestion for "Balanced Personnel Training", the Ministry of Economic Affairs has implemented a remedial plan. The Industrial Bureau will invest NT$555 million over 5 years to cooperate with various industries and educational institutions to offer an "Industrial R&D Master's Program" aimed at training 5,000 high-tech industrial R&D personnel.
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