The Taipei Vocational Training Cen- ter is a way station for the unemployed. Originally blue-collar workers came here to study such skills as auto maintenance or baking. Recently those entering have largely been former white-collar workers with college degrees and clean fingernails.

In the kitchen on the center's third floor, instructor Xie Boyan, in chef's garb, is preparing the ingredients for a soup and a pasta dish that the class will be making today. Gathered around him are 30 students, ranging from youths who have just finished their formal education to people in their fifties. Their ranks include those who lost employment when their companies went bankrupt, someone living on severance pay after losing a job in print media, and a former finance executive who left his work at an auto company to care for a sick family member and who is now preparing to reenter the workforce. The class is a microcosm of Taipei's many-layered workforce.

With estimates that put the number of workers in Taiwan now enjoying "vacations without pay" at 200,000, Hsinchu's technology workers are no longer causing traffic jams. Fortunately, mainland China's policies aimed at bringing electric appliances to households in rural villages have brought orders to Hsinchu's largest technology factories, which are operating at 60-70% of capacity.

Crowded classrooms

The class "multi-course set meals preparation," with 320 hours of instruction, teaches students to prepare 80 different courses and 100 different drinks. "If you want to start a business, culinary classes are best," says Xie. "Whether you have a lot of capital or just a little, you can start a business in this field. If you have a lot of money, you can open a restaurant. With just a little money, you can sell prepared meals over the Internet."

The center's curriculum is split into nine categories, including finance and money management; domestic services and care-giving; plumbing, electrical, air-conditioning and auto repair; culinary skills; and clothing accessory design. Traditionally, each course was offered three or four times a year, and about 3000 people would enroll per year. Yet this year, with the swelling ranks of unemployed, the hours per course have been cut in half, and the staff and number of courses have been increased so that the center can accommodate an enrollment of 10,000.

Nevertheless, the center is still unable to enroll all those who would like to take its classes and has been forced to pick and choose among applicants. For instance, 150 people applied for 30 spots in the training class for real-estate agents. First priority was given to those who could prove that they ended their previous employment unwillingly. Then spots were given to the middle-aged or elderly (those 45 years or older), those who have been unemployed for more than a year, those from low-income households, Aborigines, and finally rehabilitated addicts and criminals. Only then would the center have considered giving spots to anyone outside those profiles.

The Taoyuan Training Center of the Council of Labor Affairs (CLA), which provides training for workers in the counties of Taoyuan, Hsinchu and Miaoli, is similarly overenrolled. It too is turning away applicants.

The Taoyuan center trained 1680 people last year and will train 3000 this year. It planned for 25 students in its "cold drinks and iced snacks" class in February, but 460 showed up. Consequently, it first gave applicants a written test on junior-high-school mathematics and Chinese, and then proceeded with interviews. Of the 25 students it chose, 17 had been laid off with severance pay over the last six months.

The CLA has five major training centers. Located in northern, central and southern Taiwan, they are responsible for training workers for the dominant industries in their respective regions. The Taoyuan center, for instance, focuses on tourism and logistics, whereas the center in central Taiwan focuses on the precision machinery industry, and the center in southern Taiwan focuses on the steel industry and services to special economic and trade zones.

At the Taoyuan Training Center the curriculum is split into the two main categories: traditional manufacturing industries and service industries. Courses such as plumbing, electrical systems and air conditioning systems; automatic control systems; computing; and machinist training require 600-900 hours of coursework and take roughly six months to complete. About 80% of the people enrolled in these programs find related work, and the programs have been widely praised. The service-industry courses, on the other hand, are mostly formed from partnerships between the center and industry. First the center asks about the needs for personnel in medium-sized and small businesses. It signs agreements with businesses whereby the businesses promise future jobs. For instance, if golf courses need 40 caddies or beauty parlors needs 30 manicurists, then the center will design a curriculum for an appropriate number of people.

Two schools of thought

In all of the centers, the most popular courses at present are those that allow people to go into business for themselves with very little capital. These include the culinary skills and baking classes and the webpage design class. The government seems to believe that "entrepreneurialism will save the unemployed." Yet, in a period of tepid demand, when the economy is in retreat, will this concept work? People with different standpoints have different opinions on the matter.

"It's dangerous to try to help the unemployed by getting them to start new businesses," says Assistant Professor Hsin Ping-lung, who researches labor economics at National Taiwan University's Graduate Institute of National Development. Giving workers job training is like giving someone a pole and telling them to catch fish, he argues. But the problem right now is that "there aren't any fish in the pond." Consequently, all you are going to see is a lot of people with unreliable fishing poles crowding around the banks of the pond and sighing. When people are under great economic pressure and lack money for food, "wouldn't it be better to give them some fish to eat?" You take on a great risk by starting a business, Hsin notes. If it fails and leaves you with debts, won't that just make matters worse and contribute to social instability?

But others believe the people of Taiwan have a strong will to fight and are ill inclined to sit idly by. They argue that it is better for the unemployed to make a little money with their own small business than to sit home and get depressed. And don't forget, they argue, Taiwan built its economy on entrepreneurialism. More than 860,000 businesses in Taiwan-77.9%-employ less than five workers. Of the more than 100,000 new businesses created every year here, 80% are "micro-businesses." With layoffs and mounting unemployment, there will naturally be a rising tide of entrepreneurs, these supporters argue.

Li Peifen, secretary general of the Association of Service Industries, is a strong proponent of the government's approach of reducing unemployment through entrepreneurialism. Whereas opponents worry that weak domestic demand will drag down entrepreneurs, Li says they don't realize the possibility of "new supply stimulating new demand." Last year, the economy was in bad shape, but there were still some franchisees moving against the tide and experiencing growing sales. Take, for instance, the Small-North Department Store, a store chain that remains largely unfamiliar to those living in Taipei. It specializes in selling cheap-and-cheerful second-tier brands of goods. The chain has 50 branches throughout Taiwan, and last year sales topped NT$4 billion.

"We can pick business models that have already been successful in the market, and then help them expand in economic scale." Li emphasizes that franchises offer a higher rate of success for would-be entrepreneurs. Yet, the little island of Taiwan has 1600 franchise chains-more even than the US, which has 1300. But quality varies, and first-time entrepreneurs often have insufficient experience. They need to do their homework and get professional guidance.

"When the outlook for existing industry is uncertain, we can't overlook entrepreneurialism, particularly when it comes to food businesses, which have a low bar for entry," says Chen Yi-min, director general of the CLA's Bureau of Employment and Vocational Training (BEVT). "Providing basic necessities, these businesses are less affected by the state of the economy." Chen says that one's attitude and the determination to keep on are keys to success when starting a business.

In his opinion, the middle-aged and seniors, those 45 years and older, are most suited to start their own businesses. In recent years there has been weak demand in the employment market, so that it has become an employer's or "buyer's" market. Those who are older and would otherwise command higher wages have few advantages.

Currently, the CLA is combining the preexisting "Phoenix Program" (aimed at assisting women in starting businesses) with a micro-business startup plan for the middle-aged and elderly. The "Phoenix Plan for Micro-Business Startups" provides loans capped at NT$100 million, with no interest for three years and 1.7% interest thereafter.

White-collar workers with high levels of education have been hit hardest by the financial tsunami. With this current period of industrial restructuring, career plans have shifted from being a straight track to being wavelike, with peaks and troughs. Periods of unemployment are just part of life.

No real help going back to work?

In total, the training courses offered by the BEVT increased 61% this year. And enrollment in courses that the CLA has commissioned to continuing education centers has also increased 47% to an estimated 68,000.

In a change from the past, the CLA has largely taken a month-by-month, rolling enrollment approach. Every month, new courses are offered in such areas as technical drawing, interior design, and computer-aided design. Enrollees need some basic qualifications. The focus is on helping people with some background in a field strengthen their skills so that they can "leapfrog" into new jobs.

With the government devoting substantial resources to encouraging the unemployed to continue their educations or cultivate second areas of expertise, it is worth investigating how much job training actually helps people reenter the labor force.

Joseph S. Lee, vice president of National Central University, has carried out research into human resources management. The conclusion from research on training programs in various nations, he says, is that "job training has very limited impact on getting the unemployed back to work again." When you dig deeper, examining differences in age, sex and educational level, the data show that training has a more obviously positive effect for women.

The first reality that challenges the traditional rationale for supporting employment training is that training neither necessarily helps to reduce the lengths of time that people are unemployed nor raises employment levels. Take a look at relevant statistics from Taiwan: In the first four weeks of unemployment, those who have received training are more likely to be hired than those who haven't (21.2% vs. 12.6%). Yet once the period of unemployment stretches four to 12 weeks, the rate of finding employment is comparable (about 11%). And when the period of unemployment extends beyond 12 weeks, then those who have received training take longer to find jobs.

The results seem thoroughly counter-intuitive. What explains them?

Lee notes that unemployed workers enrolled in training courses are too busy with their classes to devote much time to looking for work or seeking interviews. This results in a "lock-in" effect, whereby they are out of the loop, and information doesn't reach them. What's more, if the purpose of training is for workers to embark on a second career, then they themselves will focus their attention on this new employment realm and tend to overlook other opportunities. Hence they may wait a period, looking for work that suits their new skills, before they begin to notice other employment options.

But Lee stresses that training is an essential method for raising employment levels. After all, in the digital era, there is a huge change in the knowledge and skills needed every few years. Likewise, there are growing innovations and diversity to be found in the employment realm. If you aren't continually learning, you are sure to be eliminated.

Uncertain demand

Taiwan, which does not have abundant natural resources, is deeply dependent on its labor resources. For a long time now the government has provided various incentives to encourage workers to participate in training courses, but industry has shown very little willingness to provide training, and labor has shown very little willingness to enroll.

According to CLA data, only 13.8% of domestic companies have offered labor training programs, and only 14% of workers have participated. Among the unemployed, 96% have never attended a training course. The reasons they give for not participating include not knowing where these courses are offered (37%), the lack of a course to meet their needs (24%), no time for the training (19%), or employment in work that doesn't need training. These results show that there is an information gap, as well as serious problems in the promotion of government training policies.

"The biggest problem with job training in the ROC is that workers who most need the training don't participate, and the companies that most need to provide training don't offer it," says Hsin Ping-lung. "Unemployed workers with low levels of education, who need training most, are the least likely get it." If government can't strengthen the emphasis that the weakest workers and small and medium-sized businesses put on training, then it will fail to help those most in need no matter how much money it devotes to training.

With this extended period of high unemployment, no matter how many people belatedly crowd into training classes, getting large numbers of people back to work will ultimately depend upon a growing demand for labor that comes with an improving economy.

"Typically there are two scenarios for a job opening: in the first, a worker leaves a position, leaving it vacant; in the second there is a need for new workers because of a business startup, a new business model, or the development of a new product," says Hsin. The current loss of jobs in Taiwan's high-tech industry is largely the result of overproduction of monitor panels and DRAM. And Taiwan is a small but open market that is largely reliant on exports. The fortunes of the island's economy depend upon production orders that are rooted in the international division of labor. There is a lack of guiding technology here, and rights aren't completely held in Taiwan. Currently, the high-tech industry faces an unclear future, and consequently companies are very cautious when it comes to hiring. With the high level of uncertainty, it is hard for training organizations to plan.

College educated hit first

It's worth noting that in 2002, after the American dotcom crash, the unemployment rate in Taiwan rose to 5.17%. Back then, those with a junior-high-school education or less accounted for 33.4% of the unemployed. They were hit hardest. Those with college educations or higher, on the other hand, only constituted 10% of unemployed workers. Yet the current financial tsunami first hit those with college educations or higher. Unemployment within their ranks grew fastest. They comprise 24% of the unemployed, whereas those with a junior-high-school education or less comprise only 22.7%.

In Taipei last year there were about 54,000 unemployed workers. Those with college educations or higher made up 42% of them. Those with vocational or junior college degrees comprised 20%. And those with high-school diplomas comprised 18%. Yet most of the openings posted at employment centers are for positions that don't require a high level of education, such as work for welders, security guards, and sales clerks. There is no way for these jobs to satisfy this wave of unemployed, who are largely white-collar workers.

With these workers unwilling to settle for inferior jobs, those qualifying for unemployment insurance in February broke 100,000, necessitating the Bureau of Labor Insurance to allocate NT$2 billion, a new record.

No more jobs for life

From the 1980s, with the liberalization of the global economy, the British and American governments not only reduced tax rates to stimulate business creation and expand productive capacity, they also reduced regulations and increased the flexibility of labor markets. On the one hand these policies permitted employers to cut staff, and on the other they encouraged all workers to receive training so they would always be able to find work. These policies helped the US and Britain have much lower unemployment rates than most continental European countries. And Taiwan was another country that pursued "active labor market policies."

"In accordance with traditional human capital theory, so long as workers continually learn new skills and thus raise their human capital, they won't become long-term unemployed," says Lee. "But in the wake of the economic tsunami, these policies failed to maintain sustained employment." Lee notes that finance-industry workers and high-tech workers both have high levels of education and are "knowledge workers." Unlike low-skill blue-collar workers, their work lacks routine procedures, and they must use their own judgments when assessing issues and solving problems. A high level of motivation, enthusiasm, and initiative is a core skill of the college educated, and it is also the source of their high productivity.

In the last 20 years, Taiwan moved from labor-intensive manufacturing to capital-intensive high-tech industries, and from there to a knowledge economy driven by innovation and basic research. Every time an industrial plank moves, there is always a group of people left behind by the market because their skills don't match the needs of the new era. Currently the global economy is facing a complete industrial restructuring. What will become the new growth industries? Green power? Healthcare? Tourism? No one knows for sure. Those who lost their jobs in the wake of the economic tsunami may find that they are unable to return to their old line of work. Traditional human capital theory needs to be re-imagined.

"Recently, scholars of human capital have started to use the 'protean career attitude' theory to gain a new understanding about the labor market." As we enter the 21st century, stable employment has long since ceased to exist, Lee says. We should regard the loss of employment as nothing out of the ordinary-just "an accident" that will happen from time to time on the road of life. It's like catching a cold or having appendicitis: Your body needs some time to recover. Individuals can use the time they are out of work to reassess their life values and core skills.

"The world is changing too fast for one to make long-term plans. What's important is to have the ability to respond and adapt when needed." Lee suggests that it's worth looking at the national competency standards that various countries have been adopting. (Listing the knowledge and skills needed for various professions, governments provide these standards as a guide for employers and workers.) Individuals can use the standards to create their own "employment realm maps." You used to be able to rely on "learning by doing," but it is now essential to be able to pursue self-directed study, so that you can survive no matter the circumstances of the job market.

Lee stresses that to help the unemployed plan for this new employment realm, the government needs to clearly point out new directions for industry and the new core skills that will be needed for the new jobs. The government also needs to re-chart its employment training direction. Apart from providing more detailed labor market information, it also needs to strengthen the information functions of employment assistance agencies. Only then will the government be able to adapt to constantly changing retraining needs.

No standard answers

Zhong Huizhen, 36, has a master's degree from a British university. Originally she worked in the personnel department of a home furnishings company. In April of last year, she was laid off. In June she applied to take the baking class at the Taipei Vocational Training Center. After three days in the class, she decided that she wasn't physically up to standing for eight straight hours as required for work in the food industry. It was too exhausting. Discarding the idea of starting her own business, she finished the class anyway-though not thinking it would do her any good.

A year later, the BEVT gave her the name of a foreign company that needed someone to work in marketing. It turned out they only needed a temporary English translator. But in talking to the company contact person, a foreigner, she learned that a Hong Kong company that had the rights to market various Italian brands of flour, butter and chocolate was just then looking for a marketing manager for the Taiwan baking ingredients market. Zhong immediately grasped the opportunity to go for an interview in Hong Kong. She now works for that company in Hong Kong. Responsible for exports to Taiwan, she has a monthly salary of NT$80,000. "It was totally by chance I found the work. I can't say it was anything other than coincidence. But fortunately, I had studied in the field."

"The 21st century is an era in which there are no standard answers," says Kenichi Ohmae. In his book Sokusenryoku no Migatikata he notes that under the rules of the game in the new era neither businesses nor workers will be able to rely on successful past models. Only by maintaining an inner desire to continually learn can one gain control over guiding one's own professional life.

To combat unemployment, the government has announced an "immediate employment" plan, providing NT$10,000 per month to businesses for every unemployed worker that they hire. The plan has already put 20,000 people back to work.

With estimates that put the number of workers in Taiwan now enjoying "vacations without pay" at 200,000, Hsinchu's technology workers are no longer causing traffic jams. Fortunately, mainland China's policies aimed at bringing electric appliances to households in rural villages have brought orders to Hsinchu's largest technology factories, which are operating at 60-70% of capacity.