Taiwan has a motivated, talented, and dedicated workforce, but is it good enough to keep Taiwan strong, resilient, and safe from China’s expansionist dreams?
The three main political parties (DPP, KMT, and TPP) in Taiwan claim to be concerned about national security and polls show that the vast majority of people support the “status quo.” In order to maintain Taiwan’s status quo, Taiwan will need a robust economy to fund its defense and strengthen its social resilience during a potential future conflict. Furthermore, Taiwanese are disappointed with the lack of progress in improving their low wages, creating affordable housing, and lowering the rising cost of living.
Taiwan would benefit from examining other countries’ methods for enhancing national resilience through a national human resource development program (NHRDP). Currently, Taiwan does discover talented young citizens in order to further develop national security and national resilience.
Other countries, like Israel and South Korea, have been developing their NHRDP programs for years. Israel received the well-known nickname of being the “start-up nation.” South Korea took its cue from Israel and has its own program.
Taiwan’s economy suffers from its over reliance / dependence on the semiconductor industry and related business. According to Investopedia, the term “resource curse” refers to a “paradoxical situation in which a country underperforms economically, despite being home to valuable natural resources. A resource curse is generally caused by too much of the country’s capital and labor force concentrated in just a few resource-dependent industries. By failing to make adequate investments in other sectors, countries can become vulnerable to declines in commodity prices, leading to long-run economic underperformance.”
Although semiconductors are not normally regarded as a natural resource such as oil or coal, the semiconductor industry is causing the same effect on the Taiwanese economy — an overreliance on this commodity in Taiwan’s economy.
According to a November 2022 article in Foreign Policy, Taiwan’s semiconductor industry is 15 percent of its GDP and one third of Taiwan’s stock market. Additionally, if examining Taiwan’s percentage of total exports, electronics are 33.1 percent of total and information, communication and audio-video products are an additional 10.8 percent, totaling over 44 percent of total exports which are related to or dependent on the semiconductor industry.
If Taiwan’s semiconductor companies lost their technological edge (through intellectual property theft or via a technological breakthrough), then Taiwan’s economy could suffer and could take a long time to recover. By having a NHRDP and an economy that encourages economic diversification, Taiwan can avoid the semiconductor resource curse and have a more resilient economy that strengthens national security.
Israel is an excellent example of how a democracy can identify, recruit, train, and employ its citizens for the benefit of national security and for enhancing economic resilience. Furthermore, research indicates that when these individuals complete their national service, they enter the business world and develop new innovative capabilities through start-ups that enhance national resilience not only in economic security but also in national security.
Israel has a population of over 9 million people. Israel’s 2022 GDP was US$522 billion and Israel invested 4.48 percent, or US$23.406 billion, in defense.
Taiwan’s 23 million population had a 2022 GDP of US$762.7 billion. Taiwan invested 2.2 percent in defense or US$16.9 billion in 2022 (inclusive of an additional special budget). Without the additional special budget, Taiwan’s investment in defense was US$12.5 billion or 1.6 percent.
Israel’s defense budget is 1.38 times more than Taiwan’s defense budget in absolute terms. By using the total population’s investment in defense as another measure, then Israel’s proportionate investment by population compared to Taiwan’s population would be 3.54 times Taiwan’s current defense budget (US$59.8 billion / US$16.9 billion) or 7.8 percent of Taiwan’s GDP (US$59.8 billion / US$762.7 billion).
If Taiwan’s 23 million population had the proportional economic capacity of Israel’s 9 million people, then Taiwan’s GDP would be US$1,331 billion. In other words, Taiwan’s economy fell short by US$568.3 billion using a comparable population proportional GDP to Israel. With only a 2.2 percent investment in defense, Taiwan’s defense budget with an Israeli proportional GDP, Taiwan could have invested a total of US$29.3 billion in defense, almost twice (1.73 times) the current budget. In other words, Taiwan has less innovation and not the same “start-up nation” mentality that Israel has.
Israel’s NHRDP developed as a result of the devastating surprise attack on Israel during the 1973 Yom Kippur War where the Israel Defense Forces (IDF) lost over a thousand tanks and 20 percent of its Air Force, and almost lost the war. Consequently, the government realized that if the State of Israel were to survive, Israel would have to out-think a numerically superior enemy. This implies that Israel would need technological supremacy and higher quality people. In other words, Israel would need a qualitative edge over their adversaries’ quantitative supremacy. This thinking aligns with Taiwan’s current challenge with China.
Israeli developed several academic reserve programs to develop its qualitative edge. These reserve programs postpone the recruit’s compulsory two- or three-year military service of a select group of high-school graduates with exceptional academic and interpersonal abilities that are recruited to join the core of Israel’s military research and development programs.
The Talpiot program is one of Israel’s elite military-academic technology units and is managed by the Ministry of Defense. Talpiot was founded in 1979 and tries to bridge the gap between groundbreaking research and development and operational capabilities. Every year the Talpiot program recruits 50-60 talented students who demonstrate exceptional skills in math and science, and who also show leadership qualities. About 10 percent of the unit’s total graduates had received some of Israel’s most prestigious security awards.
Felix Dothan, one of the Israeli founders of the Talpiot program, intended that the program’s purpose was to go beyond passing on technical knowledge or select the most intelligent; he wanted to teach young talent how to think and learn fast, especially faster than their opponents.
Each participant is required to develop their own project, which is an original solution to a defense problem to include a budget and a model. For example, a Talpiot student developed the original concept of Iron Dome missile defense system as one of his projects. Talpiot alumni founded over one hundred private companies worth over US$50 billion.
CHINA’S NHRDP
China began experimenting with its own NHRDP program at least by 2018 when it selected from more than 5,000 candidates 31 boys and girls, aged 18 and under, for a four-year experimental program for intelligent weapons systems design at the Beijing Institute of Technology (BIT). BIT is one of China’s foremost weapons development institutes.
According to a 29 May 2023 Xinhua News Agency article, Chinese President Xi Jinping (習近平) stressed accelerating building “an education superpower” by “comprehensively improve the level of human resources development.” He specifically focused on identifying gaps in China’s capabilities and to identify talented people to fills those gaps: “We must further strengthen scientific education and engineering education, strengthen the independent cultivation of top innovative talents, and provide talent support for solving the key core technology problems in China.”
Given that China is also pursuing its own NHRDP, Taiwan should vigorously develop its own program.
Harvey Leibenstein, formerly Professor of Economics at Harvard University, coined the term “X-Efficiency” in the 1970s to describe the under-utilization of resources in companies. Taiwan’s labor market has many under-utilized people because they have not been provided the educational opportunities based on their potential talent and work opportunities to hone those skills. Taiwan’s government can change this and make Taiwan a stronger resilient country both economically and in national security.
I propose that the Lai administration and the Legislative Yuan invest in Taiwan’s young talent similar to what Israel and South Korea have done, then Taiwan could not only enhance its national security, but the cascading effect would also provide an enhanced economic benefit from these NHRDP program graduates’ future innovations and business start-ups. Additionally, the camaraderie developed between individuals resulting from these endeavors will also have a synergistic effect for future projects beyond their commitment to this national program. Taiwan’s NHRDP would also enhance pride in Taiwan’s population and help develop a stronger sense of community, confidence in national defense, and nationalism. To address Taiwan’s low wages, create affordable housing, and lower the high cost of living, the new administration should seriously investigate methods to address these social problems by developing means to strengthen Taiwan’s economy. With increased national wealth from a NHRDP, Taiwanese could be proud of their government’s actions to address these shortfalls while increasing Taiwan’s national security and its national resiliency.
Guermantes Lailari is a retired US Air Force Foreign Area officer specializing in counterterrorism, irregular warfare, missile defense, and strategy. He holds advanced degrees in international relations and strategic intelligence. He was a Ministry of Foreign Affairs Taiwan Fellow in 2022, a visiting scholar at National Chengchi University and National Defense University in 2023, and is a visiting researcher at the Institute for National Defense and Security Research in 2024.
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