Digitalization in the Global Economy

Digitalization and automation are already impacting how the world works with even bigger changes to come. Market analytics firm Bain & Company forecasts that 25% of current jobs will disappear altogether by 2030, and many more jobs will undergo dramatic shifts and require new and different skill sets. To get more insight into how digitalization is reverberating through the employment sphere in Greater China, AmCham Taipei invited Christine Raynaud, CEO of Human Resources firm Morgan Philips Greater China, to speak at a luncheon entitled “Digitalization in Greater China” on May 9 at the Sherwood Taipei Hotel. Last December, Morgan Philips completed a wide-ranging survey of professionals working in Taiwan, China, and Hong Kong, querying them on their experiences of digitilization today and going forward, and the results were suprising.

While more than 60% of survey respondents are already experiencing the impact of digitilization on their jobs, and an even higher number –- over 70% — feel that digitilization will affect their careers, most consider themselves unprepared for these changes. Yet this isn’t a cause for worry for most, as two-thirds of respondents in all age groups consider digitilization an opportunity for career development, higher earnings, and better work-life balance. Interestingly, the same number of respondents –- only 6% — across all age groups see digitilization as a threat.

The crucial point that Raynaud made to guests was that while skilled workers in Greater China consider themselves unprepared, over 60% of Taiwanese and Chinese professionals and 49% of Hong Kong professionals expect to learn how to navigate the digital era through on-the-job training. Opportunities for learning and career advancement play a critical role in employees’ job decision-making, but less than 20% of respondents across all age groups consider that their jobs are actually preparing them adequately. 37% of respondents in Taiwan said that they are not being prepared at all, while 45% said that at least their companies are trying to prepare them.

According to Raynaud, opportunities for digital skills acquisition will likely lead to winners and losers in the hunt for talent in Greater China. Already nearly 20% are planning on changing jobs in 2018 in Taiwan, and 55% are open to new opportunities, and that older workers were as open to new opportunities as younger ones.

In this new digital landscape, good leadership will retain its importance, but will likely be deemphasized as agility, fast decision-making processes, and a more customer-centric approach to business rise in significance.

Raynaud concluded that digital skills are a mindset, and that embracing change and opportunity is the only way to stay ahead of the curve.

From left to right: AmCham Supervisor & Public Health Committee Co-Chair, Joyce Lee, General Manager, Bristol-Myers Squibb (Taiwan) Ltd.; AmCham Taipei President, William Foreman; Speaker Christine Raynaud, CEO, Morgan Philips Greater China; and AmCham Advisor of Advanced Learning Lab, William Zyzo, Managing Director of Z&A Knowledge Solutions

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Development of Fintech and Regulatory Environment

The development of financial technology (fintech) is designed to enhance the competitiveness of the financial sector, but is accompanied by potential risks that give rise to new regulatory challenges.

To enhance members’ understanding of Taiwan’s fintech development strategies, AmCham Taipei’s Asset Management, Banking, Capital Markets and Insurance Committees jointly invited Wellington L. Koo, Chairman of the Financial Supervisory Commission, to explain the government’s policy measures and their relation to global regulatory trends. Nearly 100 Chamber members and guests gathered to attend the event at The Regent Taipei on April 20.

In a presentation delivered in Chinese, Koo provided an overview of the current status of Taiwan’s financial sector and noted that regulators and supervisors around the world are promoting the growth of fintech while seeking to ensure the safety and soundness of the financial system.

Chairman Koo cited the tasks facing regulators around the world as they respond to the fintech revolution:

  • Providing interactive supervision and responding to the changes in technology
  • Encouraging the development of fintech innovation
  • Fostering new fintech startups by offering training and resources
  • Developing consistent standards and assisting new ventures in transnational development
  • Implementing regulatory technology to provide real-time monitoring of financial operators’ operating activities
  • Combining non-governmental forces to build a comprehensive information sharing and security system

Speaker Wellington L. Koo, Chairman of the Financial Supervisory Commission; William Foreman, AmCham Taipei President; Leo Seewald, AmCham Taipei Standing Vice Chairman; and AmCham Taipei Committee Co-Chairs

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Embracing Disruption: Mapping Out the Future

A wave of change has hit the financial services sector. Banks, insurers and wealth management firms will face greater regulatory uncertainty, tightened profit margins, increasingly empowered consumers, and the entrance of disruptive competitors.

To help financial service firms understand the process of digital transformation, AmCham Taipei’s Banking Committee invited Fred Giron, VP and Research Director at Forrester Research, to share his insights at a seminar held at the Chamber’s Lincoln Room on April 11.

In his presentation entitled “The Future of Financial Services,” Giron gave an overview of how digital technologies have changed the way consumers and businesses interact with each other. In a recent survey conducted by Forrester, 50% of North American and European companies said they believe technological changes (digital transformation) will dominate business decision-making in the near future. Giron noted that financial services firms need to digitize their business strategies and choose how they will adapt to the market in order to stay competitive.

From left to right: Speaker Fred Giron, VP and Research Director at Forrester Research and AmCham Taipei President William Foreman

Giron outlined the four rules of digital transformation:

  • Digital experience: deliver experiences that are easy, effective, and emotional
  • Digital operations: reconceive products and capabilities to deliver better outcomes
  • Digital innovation: continuously improve and break through at the digital frontier
  • Digital ecosystems: build platforms and partnerships to accelerate and scale up

The speaker gave several case studies to demonstrate how financial service and insurance companies have digitized their service models. In these examples, successful companies leveraged their assets to generate insights and value for their businesses. He also emphasized the importance of “being the integrator” and creating value-added services that solve customers’ immediate needs rather than merely providing service add-ons.

The Lincoln Room is made possible by the generosity of a number of sponsoring companies:

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Smooth Flying for the Global Economy

Even if a flight is smooth, airlines generally recommend keeping your seatbelt fastened in case of any unexpected turbulence. The life jacket beneath the seat is strictly in case of dire emergency.

So it goes for investing in today’s global economy, said Tai Hui, managing director and chief market strategist Asia for J.P. Morgan Funds in his recent presentation to AmCham members at a presentation entitled 2018 Global Economic Outlook: End of the Road or More Room to Run?

From left to right: Speaker Tai Hui, Asia Chief Market Strategist, Asia, J.P. Morgan Asset Management; AmCham’s Governor & Asset Management Committee Co-Chair Christine Jih, Chairman & Chief Executive Officer, BNP Paribas Investment Partners Taiwan Co., Ltd.; Eddy Wong, Managing Director, Head of JPMorgan Asset Management Taiwan

“You don’t know when the flight will get bumpy, and the investment world is very similar,” Hui said at AmCham’s Asset Management & Capital Markets Joint Committee luncheon on March 27 at the Grand Hyatt. “We have to put our seatbelts on – we cannot be complacent. You wear a seatbelt by having a diversified portfolio” that spreads out risks of sudden downturns.

The global economy is maintaining its growth momentum, with synchronized growth expected around the world following from 2017’s strong performance. Extending his flight analogy, Hui said that markets were climbing in 2017, but now they’ve reached cruising altitude. “It’s not the time to worry about wearing a life jacket,” he reassured investors worried about the recent trade spat between the United States and China or about U.S. President Trump’s imposition of tariffs on a number of imports, including steel.

The factors that lead him to remain bullish on investments in 2018 are inflation figures that remain at or below targets in markets around the world, even in the United States, despite the economy operating at nearly full capacity. Wage growth remains sluggish in the United States, where union activity is at an all-time low and the rising “gig economy” of Uber drivers, etc., has crimped wage hikes. But nearly full employment will nevertheless lead to creeping inflation, and Hui anticipates the U.S. Federal Reserve raising interest rates to tighten up the money supply and keep inflation within bounds. Although rising interest rates are often a cause for concern for investors, Hui noted that “when the Fed raises rates, it’s a vote of confidence in the economy.”

For the same reason that tighter money supply points to a stronger business climate, he also parted with conventional wisdom that equities take a hit during money tightening. And while equities in the United States are not cheap, he told audience members that equities on Asian markets are earning 30% more per share than their American counterparts, an attractive bargain. Still the 20% boost to revenues that U.S. companies are currently enjoying thanks the to the Trump tax plan likewise makes them viable targets, and investors now have a wealth of choices.

Even fixed-income products such as bonds are doing well, he noted.

Key concerns are the risk of protectionism or even a trade war between the United States and China, but Hui said that recent negotiations between the two economic behemoths should reassure investors that they will likely work things out. A trade war would contribute to inflation on both sides of the Pacific to potentially disastrous results.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

A Collaborative Approach to Food Safety

Two experts note how improved indusry-regulator communications helped in the U.S.

Food safety issues have continued to plague Taiwan, despite comprehensive efforts by the regulatory agencies following the waste-oil scandals of 2014 to upgrade and enhance food safety surveillance. At the same time, the food industry complains that many of the regulations and practices put into place to ensure that Taiwan’s food is safe and free of both contamination and fraudulent ingredients are unreasonable and ineffectual, entail great costs for food producers and sellers, and offer minimal benefits to consumers.

Relations between industry and regulators, including the Taiwan Food and Drug Administration, the Council of Agriculture, and the Customs Administration, continue to be testy, with little collaboration or cooperation.

There’s got to be a better way.

On March 12, AmCham Taipei’s Retail Committee, in association with Costco Wholesale Corp. Taiwan, invited visiting U.S. experts to describe a more cooperative approach to food safety at a forum entitled “Effective Advocacy on Food Safety.”  Michael Taylor, a former deputy commissioner of Foods and Veterinary Medicine at the U.S. Food and Drug Administration, and Craig Wilson, vice president of Quality Assurance and Food Safety for Costco Wholesale Corp., discussed how industry, government, and consumer groups in the United States collaborated on creating the comprehensive legal and regulatory framework, the Food Safety Modernization Act (FSMA).

From left to right: AmCham Taipei President William Foreman; Speaker Michael Taylor, Former Deputy Commissioner at Foods and Veterinary Medicine at the U.S. Food and Drug Administration; Craig Wilson, Vice President, General Merchandising Manager of Quality Assurance / Food Safety, Non-Foods Quality Assurance, Environmental Services /Haz Mat and Merchandise Services, Costco Wholesale Corporation

“We saw tremendous alignment of government, industry, and consumers along the goal of making the food supply as safe as we could, and put in place modern standards,” said Taylor, who oversaw the entire process. The FSMA was signed into law by President Obama in 2011 and its implementation continues today.

But getting to that point wasn’t easy, Taylor recounted. He said that an outbreak of E.coli contamination in a popular fast food restaurant chain in the early 1990s, which killed four children and permanently injured more than 500 others, forced the U.S. Department of Agriculture and the beef industry to acknowledge “that you cannot fight the goal of food safety,” said Taylor.

“It triggered a mindset shift,” he explained. While previously industry and government had operated on the assumption that contamination was an inevitable reality and that consumers were responsible for ensuring the adequate preparation of their own food, “it is now widely accepted that its industry’s responsibility to do everything it can to make the food safe for consumers.”

Further outbreaks in the mid-2000s involving leafy green vegetables and other foods also triggered efforts by regulators and industry to collaborate on improving food safety monitoring. An outbreak of salmonella in a wide range of peanut products that killed nine people and severely sickened thousands, however, was the final straw. The food industry actually approached Congress to say: “We need our industry better regulated.”

The result was the FSMA. Signing the law, however, was just the beginning of the process, as the legal concepts needed to be converted into concrete regulations. Once again, “enormous collaboration between industry and government was required to get these regulations right,” said Taylor. “Now we are working to achieve comprehensive compliance.”

Could such an approach work in Taiwan? Neither presenter was willing to state that the model would definitely be applicable to Taiwan’s specific culture or food market. Yet perhaps more open communication between the authorities and the private sector could enable Taiwan to make faster progress in enhancing food safety.

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Labor Inspection Enforcement Seminar

The latest amendments to the Labor Standards Act went into effect on March 1, 2018. This regulation has sparked a great deal of controversy and uncertainty. In order to protect the interests of both companies and employees, corporate HR departments need to be equipped with a full knowledge of the new labor rules and how they will be implemented.

To help provide that information, on February 26 AmCham Taipei’s Human Resources Committee invited Chiang Ming-chih, director of the Taipei City Labor Inspection Office, and Hu Hua-tai, director of the New Taipei City Labor Standards Inspection Office, to explain how the labor inspection system will be carried out and to take questions from the audience. Over one hundred Chamber members and guests gathered at The Sherwood Taipei for this event.

The two directors specified that organizations with the following conditions will be placed at the top of the list for inspection:

  • Having been previously reported for violation of labor laws
  • Using a shift system
  • Having non-standard working hours
  • Hiring hourly-rate or part-time workers

During the panel discussion, the majority of the questions focused on practical issues that arose from past experiences, ranging from the calculation of working hours to wage payment deadlines.

Chiang and Hu strongly urged HR managers to establish an effective internal communication channel and to reinforce employee management as the key to resolution of workplace disputes.

From left to right: AmCham HR Committee Co-chair Seraphim Ma, Senior Partner, Baker & McKenzie; Hu Hua-Tai, director of the New Taipei City Labor Standards Inspection Office; Chiang Ming-chih, director of the Taipei City Labor Inspection Office; AmCham HR Committee Co-chair Vicky Chen, Head of Human Resources, Standard Chartered Bank (Taiwan) Ltd.; and AmCham Taipei President William Foreman.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Insurance Committee Presentation Focuses on Fintech

According to the World Economic Forum, the growing use of financial technology (fintech) is expected to bring disruptive innovation to the world of finance, increasing efficiency and lowering the costs of financial services. Fintech is already the focus of serious attention in many countries, and Taiwan is no exception.

At a luncheon meeting organized by AmCham Taipei’s Insurance Committee at The Sherwood Taipei on December 14, Jennifer Wang, Vice President and the Distinguished Chair Professor of National Cheng-Chi University, gave attendees an update on current developments in fintech in Taiwan. Since introducing the relevant regulations early this year, the Taiwanese government has been encouraging enterprises, both financial institutions and start-ups in various industries, to participate in this new field. Having more companies involved in the current experimental stage for fintech in Taiwan is seen as enabling the authorities to refine the regulations to make them as effective as possible.

From left to right: AmCham Taipei President Andrea Wu; Speaker Professor Jennifer Wang; AmCham Taipei Insurance Committee co-chairs Dan Ting, Chairman of Hotai Insurance and Linda Tsou from Cigna Taiwan Life Assurance.

Wang, a former Vice Chairman of the Financial Supervisory Commission, said fintech offers hope of bringing the following benefits:

  • Lowering the costs of financial services
  • Collecting big data and financial information to analyze
  • Providing customized financial services based on the collected data
  • Enhancing supervision of the financial sector and preventing financial crimes

Strong Outlook for the Semiconductor Sector

2017 was a landmark year for the global semiconductor industry. Due to an astounding 57% rise in sales in the memory sector, total revenue in the industry is poised to surpass US$400 billion for the first time. In addition, after 25 years as the global leader in the semiconductor field, Intel will be losing that title to Samsung.

From left to right: AmCham Senior Director Don Shapiro, Editor-in-Chief; Speaker Ben Lee, Principal Analyst at Gartner Group Taiwan Ltd.; Technology committee co-chair Revital Shpangental Golan, CEO of Anemone Ventures.

Ben Lee, principal analyst at Gartner Group Taiwan, sought to shed light on those and other recent developments at a luncheon meeting of AmCham Taipei’s Technology Committee at The Sherwood Taipei on December 8. Most of the growth this past year was due to a rise in selling prices – spurred by an undersupply of product in 2016 – rather than increased production volume, Lee explained. As a result of the changed market dynamics, memory now accounts for about 30% of the total semiconductor market, up from 24% a year ago.

Lee sees continued growth, though at a more moderate pace, in 2018, driven by heightened demand in such categories as automotive-electronics and robotics. The development of products centered on the Internet of Things will help make up for the decline in such areas as PCs and smart phones.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

2017 Trade Secrets Act Forum

Taiwan has had Trade Secrets legislation on the books since 1996, but the law has been strengthened substantially in recent years in response to the increased number of cases of theft of confidential commercial information.

On December 6, AmCham Taipei’s Technology Committee and Intellectual Property & Licensing Committee jointly sponsored a seminar at the Westin Taipei to review the latest trends in trade secrets protection. Specialist Chen Hsin-ru (陳信儒) from the Ministry of Economic Affairs’ Intellectual Property Office opened the session with a definition of what constitutes a Trade Secret, followed by describing the detailed steps involved in filing a lawsuit if one’s trade secretshave been infringed upon.

Citing real-life cases as examples, Prosecutor Liu Yi-jun (劉怡君) from the Hsinchu District Prosecutors Office shared the process of investigation, including what evidence was required and what could help reinforce a case, as well as what corporations can do to prevent the violation of trade secrets. Special Investigator Pan Ji-xiang (潘季翔) from New Taipei City’s Investigation Bureau concluded the discourse with enforcement and litigation statistics.

From left to right: Speaker Special Investigator Pan of the New Taipei City Investigation Bureau; Speaker Specialist Chen of the Taiwan Intellectual Property Office; Speaker Prosecutor Liu of the Hsinchu District Prosecutors Office; and AmCham IP&L Committee co-chair Peter J. Dernbach of the Winkler Partners law firm.

During the Q&A session, attendees raised numerous questions about the coverage of the Act and its enforcement. This seminar helped build a communications bridge between the business and law enforcement communities in the hope of enhancing regulative efficiency and strengthening the protection of valuable intellectual properties.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Gain More Shoppers for Your Brand 

Every day, we pass by hundreds of products, advertisements, and business logos, on the streets or on the internet, but only a few of them catch our eyes. What is the difference between the brands that capture our attention and those neglected? For a company, how to stand out among millions of brands – and most of all, what is the secret to owning a sustainable brand in this ever-changing world?

On November 30, the AmCham Retail and Cosmetics Committees jointly invited Marcy Kou, CEO of Kantar Worldpanel Asia, to break down the secrets behind a successful brand. On the topic of “Gain More Shoppers for Your Brand,” Kuo pointed out that the key to building an influential brand is the ability to recruit incremental shoppers.

From left to right: AmCham President Andrea Wu; Speaker Marcy Kou, CEO of Kantar Worldpanel Asia; AmCham Retail Committee Co-Chair Mark Chen, General Manager of Abbott Laboratories Services Corp., Taiwan Branch.

Kou presented five tips to expanding the number of shoppers:

  • More moments – Associate your brand with a special moment, and encourage shoppers to share their moments. This is a prevailing approach on the internet.
  • More presence – Recurring presence reinforces brand images on customers’ minds, and thus differentiates your brand from your competitors.
  • More targets – Reach out to new groups of shoppers. For example, vegan flavors help an ice cream brand obtain new customers.
  • More categories – Diversify product lines for various types of consumers, such as kids.
  • New needs – Create or discover new features from existing products. For instance, a company that sells probiotic beverages extended their business into beauty masks made from the same ingredients as the beverage.

Providing new incentives for consumers to make a purchase and further share their user experiences are what enable a brand to stay at the top of the game.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.