If someone were to tell you that the economics department at Taiwan’s top university, National Taiwan University, has been unable to hire new faculty, would you believe them?

“We had six assistant professor positions open in 2010, but were only able to hire one person,” says an exasperated Wang Hung-jen, the department’s chair. “In 2011, we attempted to fill five positions using both the department’s alumni association and a variety of salary incentives, but barely managed to hire three people.”

Taiwan’s science parks are magnets for top research personnel and have been called “the invisible heart of the global economy.” The Taipei Neihu Technology Park (facing page) enjoys a fantastic location. The Hsinchu Science Park (this page) established Taiwan’s reputation as a “technology island.”

“Global demand for talented new academic economists is very high,” says Wang, “Taiwan’s very low pay levels are causing us to lose the hiring battle.” He offers NTU as an example, noting that the starting salary for an assistant professor there is about NT$1 million per year. In contrast, in mainland China, more and more universities are offering better salaries and throwing in a housing supplement, bringing total annual compensation to NT$2 million or more. In Hong Kong and Singapore, salaries are four to five times those in Taiwan.

And NTU’s economics department isn’t alone in its hiring woes.

Samuel C. L. Chen, associate dean of National Cheng­chi University’s College of Commerce, says that even though the college ranked 41st in the world and first in Taiwan on the UK Financial Times’ 2011 list of top MBA programs, international acclaim is of little help in recruiting faculty. In fact, the college’s 10 departments currently have more than 20 vacant positions. The college attempted to fill six of them this past semester, but as of the end of the term had only succeeded in filling two.

“Worse, we constantly have to defend ourselves against poaching of current faculty by other universities both in Taiwan and abroad,” says Chen.

The College of Commerce lives under threat of a brain drain, and has lost numerous faculty to Peking University since 2006, including Hou Teh-ming, a professor in the Money and Banking Department, Liu Yu-jane, the former chair of the Finance Department, and Lee Yi-tsung, a professor in the accounting department.

In 2011, the college mobilized all the university’s resources and a good deal of money to hire Tang Kwei, then the vice dean of Purdue University’s Krannert School of Management, as its dean, staunching the flow for the moment.

But Chen remains worried: “The faculty shortfall is going to become even more serious in five years, when roughly one-third of the college’s 150 current teaching staff will have reached retirement age.”

Unfortunately, Taiwan’s academic outflow has extended to virtually every field.

Academia Sinica is also suffering in literature, history, and philosophy, where scholars must expend considerable effort studying documents written in classical Chinese. Its Institute of History and Philology alone has lost four fellows to Hong Kong, including Academician Angela K.C. Leung and the internationally renowned Egyptologist Poo Mu-chou.

In engineering and the sciences, Taiwan’s leader for industrial R&D, the Industrial Technology Research Institute (ITRI), has lost more than 20 integrated circuit and photonics researchers to mainland China in recent years. (Such experts usually leave for the Taiwanese private sector before being hired away by a mainland organization.)

“To date, we’ve only had individuals go directly from ITRI to the mainland,” says ITRI chairman Dr. Tsay Ching-yen. “What we worry about is the mainland offering people still greater incentives and taking whole research groups at once. That would be devastating!”

Chang Ching-fong, deputy minister of the National Science Council, says NSC figures show that at least 100 professors and research personnel have been poached from local universities and Academia Sinica over the last five years. And it’s not just the mainland, Hong Kong, and Singapore. Non-Chinese-speaking nations such as South Korea and Saudi Arabia have also come to Taiwan hunting talent.

Technology is one of Taiwan’s great strengths. The industry’s massive revenues represent the fruits of the daily mental and physical toil of innumerable engineering and technical staff. The photo shows a clean room in the AU Optronics facility in the Central Taiwan Science Park.

Why are so many Taiwanese academics leaving? The answer is related to globalization and to the “plate tectonics” of political and economic trends.

An old saying has it that “people strive to advance themselves.” If you look at the history of talent flows, they show people going where their talents are appreciated. In a study on the talent recruitment policies of major nations, Chen Shin-horng, director of the Second Research Division of the Chung-Hua Institution for Economic Research, noted that after World War II the intellectual elites of the war-ravaged European mainland moved to the politically stable, economically booming US, where they contributed to the breakthroughs in pure research that emerged from government and university labs.

In the 1990s, European higher education, industrial economics, and technological R&D caught up with those of the US and its intellectual elites have since been more inclined to pursue their careers at home. Over that period, the rapid expansion of higher educational opportunities in Taiwan, South Korea, India, and mainland China turned them into replacement sources of international-class talent.

Since 2000, there’s been a radical change in the factors influencing the flows of technical personnel. First, the US has become much more stringent about issuing visas since the September 11 terrorist attacks. Second, the low birthrates and aging populations of the developed economies of Japan and Singapore have compelled them to adopt more liberal immigration policies to expand their talent pools.

The period has also seen the rise of the Chinese and Indian economies, increasing their domestic demand for talent and prompting them to implement policies to attract personnel from abroad. For example, in 2008 the mainland inaugurated a “global expert” recruitment program aimed at bringing 2,000 foreign experts into institutions of higher learning, key labs, and state-owned enterprises over a five to 10 year period.

In other words, economic power and aggressive policy-making are transforming Asia from an exporter of talent to an importer of it in the 21st Century.

As talent migrates around the globe, Taiwan is both victim and beneficiary. From 1970 to 1990, large numbers of Taiwanese who studied in the US chose to remain there after graduation. Later, the government encouraged many of these individuals to come back and start businesses, spurring the growth of Taiwan’s “Silicon Valley”: the Hsinchu Science Park. Morris Chang is a classic case in point. After serving as a group vice president at Texas Instruments and the president and chief operating officer of General Instrument, Chang founded Taiwan Semiconductor, thereby laying the foundations for Taiwan’s semiconductor industry.

In recent years, mainland China has begun using international standards as a benchmark in both urban construction and university research, helping make Shanghai a gathering place for international talent. (right) Shanghai’s Fudan University has successfully recruited hordes of international students.

Talent flows like water, moving where it will. But in recent years, Taiwanese academia has been in crisis, “consuming without producing.”

Taiwan’s pool of international academic talent has been drying up, and has reached the warning line.

According to the US’s Institute of International Education, Taiwan had 24,818 students studying in the US in 2010–2011, a figure that ranked fifth in the world. But Taiwan ranked number one in the world in the 1980s, and the current number of Taiwanese students in the US is down 34% from its 1994 peak of 37,580. Meanwhile, mainland China has surged ahead, sending an army of 157,588 students abroad in 2010–2011 to support its economic development.

With the number of Taiwanese studying abroad declining, the number of job candidates meeting academia’s high standards of international vision coupled with strong research and language skills has fallen. Chen’s paper notes that there were 84,281 international scholars in the US in 2003. Taiwan accounted for just 1,241 of them (1.5%), versus mainland China’s 15,206 (18%) and South Korea’s 7,286 (8.6%). The dilution of Taiwanese talent in the international sphere and the decline in the number of Taiwanese holding teaching positions with US universities is almost certainly reducing scholars’ ability to “speak for Taiwan” in international settings.

In recent years, mainland China has begun using international standards as a benchmark in both urban construction and university research, helping make Shanghai a gathering place for international talent. (right) Shanghai’s Fudan University has successfully recruited hordes of international students.

Making matters worse is that academia’s diminishing pool of international-caliber talent is being poached by other nations.

In 2012, Hong Kong’s universities will switch from a three-year to a four-year degree system, creating demand for an additional 1,000 faculty members at the territory’s eight public universities. Taiwan’s similar culture makes Taiwanese academics prime recruiting targets.

The Hong Kong University of Science and Technology (HKUST), which topped the 2011 QS Asian University Rankings­, excels at landing talent. According to the World Bank’s “The Road to Academic Excellence: The Making of World Class Research Universities,” the key to the school’s success has been its ability to recruit outstanding academics and technologists. Some 80% of its faculty either obtained their PhDs or worked at one of the world’s top 24 universities.

According to Tsung Fu­gee, who received his undergraduate degree in mechanical engineering from NTU and is now head of the Department of Industrial Engineering and Logistics Management (IELM) at HKUST, the school is in the process of creating a multidisciplinary financial engineering research center to study global financial crises. In addition to spending large sums of money to advertise vacancies in the UK’s The Economist magazine, it is also offering salary-and-benefits packages comparable to those offered by US and European universities, with added perks that include a housing subsidy and Hong Kong’s low tax rates.

Over the last decade, rising educational standards and the growing ubiquity of higher education have led to a rapid increase in the number of Taiwanese pursuing advanced degrees here at home. The National Taiwan University MBA students in the photo are about to graduate.

How are we to refill our leaky talent pool?

Many people have noted that as the number of Taiwanese studying abroad has declined, the number pursuing PhDs at home has increased. According to the National Science Council, some 1,053 Taiwanese were pursuing PhDs domestically in 1995. By 2009, this figure had increased roughly 2.5 times to 3,705. Can these homegrown scholars make up the shortfall?

“The number of Taiwanese pursuing advanced degrees abroad has been declining steadily,” says NCCU president Wu Se-Hwa, who received his undergraduate degree from National Chiao Tung Unversity and his PhD from NCCU. “And the best of our students abroad are recruited by foreign institutions. The products of our domestic PhD programs are more of a mixed bag.” He says that homegrown PhDs tend not to have the language skills or international vision of those who received their PhDs abroad. At NCCU, for example, roughly 80% of the teaching staff obtained their doctorates overseas.

“We should encourage more students to go abroad while also ensuring the quality of our domestically trained PhDs,” he says. “Such an approach would likely resolve more than half of Taiwan’s talent shortfall.”

To make our PhDs more competitive, the NSC, ITRI and a large number of forward-looking universities and research institutions have put together programs offering awards that help talented individuals go abroad.

Over the last decade, rising educational standards and the growing ubiquity of higher education have led to a rapid increase in the number of Taiwanese pursuing advanced degrees here at home. The National Taiwan University MBA students in the photo are about to graduate.

In addition to cultivating talent, Taiwan must dismantle numerous sclerotic systems that make talent retention difficult.

Wong Chi-Huey, president of Academia Sinica, says that existing law treats professors and researchers as civil servants, and provides no mechanism for administering them differently. Instead, it mandates a single system for the salaries, raises, and promotions of all “civil servants,” handcuffing educational institutions’ efforts to hire and retain people.

Public institutions in Taiwan utilize an “egalitarian” model quite different from the “differential pricing” employed by educational institutions abroad.

Cyrus Chu, a minister without portfolio, says that in the US the “price” of newly minted PhDs varies by field. For example, even within the same business school, a new economics PhD may earn US$70,000 per year (approximately NT$2.17 million), while a new accounting PhD might make as much US$170,000 (roughly NT$5.27 million).

NCCU’s Chen says flatly that neighboring nations have long since begun differentiating salary by field and performance. Only Taiwan continues to offer the same pay across the board. “No wonder people say that even mainland China has embraced capitalism; only Taiwan is still ‘socialist!’”

Sometimes referred to as “Taipei’s Manhattan,” the Xinyi District is home to many transnational financial institutions and is an aggregator of international talent.

But what really makes people shake their heads is that Taiwan continues to place unreasonable restrictions on the hiring of foreign nationals in the broader job market. This creates a situation where we can’t keep people who want to leave, and can’t bring in those who want to come.

Under longstanding provisions of the Employment Services Act that relate to foreign jobseekers, the minimum qualifications for a foreign national seeking professional work in Taiwan are a master’s degree, or a bachelor’s degree and at least two years of work experience. In addition, hiring institutions are required to offer such individuals a salary of not less than NT$47,971 per month.

Under these rules, neither Microsoft founder Bill Gates, who never finished his Harvard degree, nor Apple Computer founder Steve Jobs, who quit school to study meditation in India, would have been welcome to work in Taiwan in spite of their amazing achievements as young entrepreneurs.

Even overseas Chinese graduates of Taiwanese universities are likely to face “immediate deportation” on completing their degrees because, as new graduates without any work experience, they’re unlikely to find anyone willing to pay them NT$48,000 per month.

Taiwan’s science parks are magnets for top research personnel and have been called “the invisible heart of the global economy.” The Taipei Neihu Technology Park (facing page) enjoys a fantastic location. The Hsinchu Science Park (this page) established Taiwan’s reputation as a “technology island.”

Yet there are those who feel we needn’t be so pessimistic about our position in the global battle for talent.

Liu Yu-jane, who left NCCU for the finance department of Peking University’s Guanghua School of Management, says that the flow of academics across borders is a good thing, not just in terms of research and teaching experience, but also in terms of understanding local markets. In her view, Taiwanese academia shouldn’t fixate on the departure of a few individuals, and should instead encourage movement. “Marketing outstanding Taiwanese talents abroad also increases Taiwan’s international influence.”

Lo Ching-hua, NTU’s vice president for academic affairs, says that whereas Hong Kong and Singapore are urban and have little physical space for research, and mainland China is still a totalitarian state, Taiwan has a liberal, diverse society that tolerates research on a broad array of topics. The high levels of visibility, influence, and sense of achievement that scholars enjoy here are competitive advantages.

“People who take jobs overseas don’t cut their ties to their motherland. Most do research in areas related to Taiwan, and end up on the frontlines of academic discussion and international cooperation,” says Lo.

During his 1931 inauguration as president of Tsinghua University, Dr. Mei Yi-chi is reported to have said: “Great universities are not great for their facilities but for their scholars.”

Without talented academics now, there will be no great scholars in the future. The battle to retain talent has begun. Taiwan needs to start fighting.

Hong Kong is using big money to poach talent from around the world and has done very well for itself in recent years. In fact, the territory’s universities now rank among the best in Asia.

Taiwan used to send more students to the US than any other nation. But with rapid growth in the number of students from other Asian nations who are being educated in the US, Taiwan now ranks fifth. The photo shows the campus of Stanford University.