Taiwan's education system and industrial structure have had key parallels in the past with those found in Germany. Both countries depended on vocational education to train a technically skilled workforce that supported a highly competitive industrial base composed of small- and medium-sized enterprises (SMEs). But in Taiwan "that all got smashed with education reform," says Yunn-Shiuan Liao, a mechanical engineering professor at National Taiwan University.

Liao and many others believe that the major education reform plan launched in the late 1990s and carried out in the first decade of the new millennium has emphasized academic advancement at the expense of technical excellence – to the detriment of Taiwan's competitiveness.

The results can be seen at the government-sponsored Central Training Center in Taichung, where student Lin Wen-yan is working on a mold assembly. Lin's career path has followed a different course from that of many of his classmates who graduated with him from Feng Chia University's Department of Electrical Engineering.

While most of them joined high-tech giants like Taiwan Semiconductor Manufacturing Company (TSMC) and Advanced Semiconductor Engineering Inc., Lin decided after completing his military service to further his training in the center's precision machinery program. Even before completing the course, he has already landed a job, with a signing bonus, at a tool and die maker.

In the future, Lin will make molds and tools for the products designed by his classmates. Asked if that made him feel somehow below them, he replies, "Not at all. They depend on us for the things they make."

When asked how things will be different 10 to 20 years down the road, he says, "Doing this, we have a better chance of starting our own business. For them, that's impossible."

Twenty years ago, 80 percent of the trainees under the Bureau of Employment and Vocational Training had no higher than a junior high school diploma, but today 80 percent hold undergraduate or graduate degrees, a sign of how things have changed.

Taiwan's Eroding Technical Base

"A German education expert once said, 'We don't need a lot of academic experts, but we can't do without high-caliber technicians,'" notes an agitated Hsing-chien Tsao, who recently retired as director of the Central Training Center, bemoaning the rapid decline of Taiwan's industrial technology base. "High-caliber technical people cannot be cultivated by regular universities."

"When TSMC builds a new plant, three-quarters of the money it spends is on equipment, but it's not equipment that we can make, because we are not technically proficient enough," Liao adds. "We no longer really value the basics. There used to be a difference between a standard university and a technical university, but not anymore. National Taiwan University of Science and Technology is competing with National Taiwan University."

Before Taiwan's education system underwent major reforms, students enrolled at vocational or industrial high schools to prepare themselves to get a job. But today, the emphasis is on academic advancement. Also, where students would once get hands-on training three days a week, today it's only allotted two to three classes a week, and those time slots are often used for college preparatory courses rather than their intended purpose.

"Teachers who used to teach in vocational and industrial high schools were graduates of those high schools, who after gaining many years of practical experience then went back to school to get an advanced degree," says Tsao. "Today, a professor at a technical college is no different from a professor at a research university. His studies are also grounded in theory until he gets a Ph.D. and becomes an assistant professor. What can he offer that's different from typical university teaching methods?"

Ministry of Education statistics indicate that 65 percent of faculty members at technical colleges or universities have the same teaching qualifications as professors at standard universities. "The ministry's statistics are too conservative," Tsao says. "It's more like 80 percent."

To Upgrade, Get Back to the Basics

Taiwan's wages have remained stagnant in part because of the education reform process and the inability of the country's manufacturers to upgrade their operations.

According to Tsao, Taiwan's manufacturing sector has for some time encountered a barrier to "growing up" (upgrading). "Wages have gone as high as they can. If wages rise even more, businesses will have no choice but to move offshore. So how can you raise wages?" he says. "What the government should do is quickly help businesses to 'grow up.' But there is only one way for sectors to upgrade themselves: by returning to an emphasis on basic industries.

Of course, basic industries require basic technical capabilities, which are the foundation for advanced technical skills and self-developed processes.

One example of Taiwan's limitations is the country's highly competitive machine tools sector. It can expertly produce the main bodies of CNC machining centers, but 80 percent of the controllers that serve as the machines' nerve centers are imported from Japan. "That's because our electronics, electrical engineering and electrical machinery foundations are not solid enough," Tsao says.

Many economists in Taiwan have advocated developing the service sector, but without a manufacturing sector to serve, service businesses will have a much harder time growing. Germany, for example, continues to maintain a tight hold on its manufacturing base even in the face of the great wave of globalization.

The day CommonWealth Magazine was visiting the Central Training Center, Largan Precision Co., one of Taiwan's leading cell phone camera lens makers, was there offering signing bonuses to tie up future employees.

"Why do Largan and Hon Hai love to employ the people we train? A lot of people think the companies are high-tech, but the equipment used in their processes is produced by our machines. The molds for mobile phone casings are also produced by our precision machinery. Precision machinery is the mother of industry and is the foundation of all countries' industrial bases," says one of the center's trainers, Hung Yau-cheng.

As in many other countries, many of Taiwan's unemployed are considered long-term unemployed. Yet at the same time, companies complain about a shortage of talent.

The problem boils down to a simple question: Is talent cultivation and training the private sector's responsibility or the government's responsibility?

"Some people say the companies should do it. But companies have to reach a certain size before they can set up their own training center," says Tsao, a 20-year veteran of the vocational training field who has witnessed the recent changes in Taiwan's industrial structure and labor market.

"It used to be that SMEs were the main axis of Taiwanese industry. That's the way it is now and the way it will be 50 or 100 years from now. If you want SMEs to set up their own training centers, isn't that pretty much giving them a death sentence? The talent cultivated doesn't belong to any individual company but to the country, so of course the government should make the investment," Tsao stresses.

SMEs do not have the resources to train their own talent, and it is also not realistic for every school in the vocational education system to establish hands-on training facilities and nurture teachers with practical experience. They lack both the funding and the time. But collaboration between the private sector, academia and technical training institutions during a transition period could help solve the imbalance between the supply of and demand for talent and eliminate barriers to industrial upgrading.

The way forward for Taiwan is to look back, to return to an emphasis on basic industries and a restructuring of the vocational education system.

Translated from the Chinese by Luke Sabatier