Meeting business award winners at the Executive Yuan yesterday, Premier Lin Chuan said that the government is dedicated to working with the industrial sector to increase the competitiveness of small and medium-sized enterprises (SMEs) by enhancing their capacity for innovation, opening up recruitment channels and developing key technologies.

Speaking to the winners of the 25th National Award of Outstanding SMEs and the 18th Outstanding Overseas Taiwanese SMEs Award, the premier noted that globalization has compelled companies to move offshore, decreased local job opportunities, lowered wages and created an unequal distribution of wealth—all of which have had a serious impact on Taiwan.

Given challenges such as Taiwan’s environmental protection requirements, changing labor conditions and rising land costs, businesses seeking to lower costs, stay competitive and expand their markets have no choice but to relocate to other countries, which has created employment problems in Taiwan, he said. Meanwhile, businesses that want to remain in Taiwan must learn to lower costs and increase production value to meet those challenges. Confident that Taiwanese enterprises can lower production costs, the premier said it is the government’s responsibility to help them increase their industrial value-added.

Taiwan’s future growth hinges on investment, and right now, the nation’s poorer-than-expected economic performance is a clear sign that investment is lacking, the premier said. But to enhance industrial competitiveness, investment must be directed toward innovation and job creation.

The government has made “innovation, employment and equitable distribution” the keynotes of its economic policy, with equitable distribution as the foundation of social stability. Without that foundation, the premier said, there can be no social stability, while enterprise owners that share profits with their employees can attract better talent and create a virtuous cycle of growth.

The government, Lin said, is responsible for creating the basic conditions for a healthy investment environment. Noting public concern about electricity supplies, the premier underscored the administration’s efforts to reform Taiwan’s energy structure and develop renewable energy resources. These efforts include managing peak-load demand, promoting energy conservation and the further diversification of energy sources to ensure that energy demand is met during the transition process.

Looking ahead, the government will promote solar and wind power projects, adopt smart grids and time-of-use pricing strategies, and reduce energy demand during peak hours. This will not only ease Taiwan’s energy problems, but also create investment opportunities in the renewable energy sector, he said.

The premier also mentioned the “five plus two” innovative industries policy, which focuses on integrating and investing in existing and new industries. The Asian Silicon Valley plan, for instance, aims to combine Industry 4.0 concepts with computers, smart enterprises, and information and communications technology to make Taiwan globally competitive in smart cities, smart transportation, internet of things technology, and e-finance. Another example is the policy to develop intelligent machinery, which aims to upgrade the machinery industry and integrate industrial, academic and research resources to stay competitive with European and Japanese peers, and keep the industry abreast of the latest developments.

Through the New Southbound Policy, Lin said, the government is also building closer ties with Southeast and South Asian countries to pursue free trade and investment protection agreements, enhance exchanges and cooperation, and create strategic alliances for mutual benefit. He added that under this policy, Taiwanese companies will enjoy greater protection when operating or investing abroad.

In closing, the premier touted small and medium-sized enterprises as the heart of Taiwan’s innovation and job growth. These small but nimble businesses represent Taiwan’s greatest strength due to their capacity for innovation, diversity, and adaptability. Those strengths create many new development opportunities, so the government will facilitate continued growth by helping them overcome obstacles and developing new recruitment channels.