Many in the business world see today's relationship between Taiwan on one hand and ASEAN or mainland China on the other, as being quite similar to that of yesteryear's relationship between Japan and Taiwan.

"After Taiwan replaced Japan as the main center of cloth production in the 1990s, firms in Japan moved farther upstream to materials development," says Cheng Kai-fang, deputy director of the Department of Industrial Information and Services (DIIS) at the Taiwan Textile Research Institute. To take "environmentally friendly textiles," one of the areas with the greatest potential for the future, as a case in point, the Japanese have more advanced technology than Taiwan for breaking down plastic bottles to make polyester chips (raw material for chemical fibers), and are far ahead of Taiwan in terms of differentiation and quality when it comes to industrial-use fibers. Taking the super-fine fibers used in wiping-cloths in the 3C chip industry, the price of exports from Taiwan is about NT$200-400 per kilogram, but the Japanese can get NT$2000 per kilo.

The direction for future progress is not limited to development upstream in the production chain; there is in fact also a lot of room for advancement in horizontal R&D.

Eclat CEO C.H. Hung says, for example, that in the area of fabrics work is ongoing to develop new materials, new functions, and new production techniques. "Ten years ago if you had talked about the 'light-fastness' or 'wash-fastness' of fabric, no one would have understood what you were saying," and today technology has advanced to the point where we even have "energy-producing textiles" and "environmentally friendly textiles."

"So long as Taiwan can utilize its assets-technology, human resources, facilities, materials-to produce the next generation of textiles, then we don't have to worry when traditional fabrics factories move overseas," says Kang Shu-teh, a senior manager at Tuntex (Thailand).

New uses, new potential

In fact, last year the Ministry of Economic Affairs finished drawing up a blueprint for future upgrading of the textile industry. They aim to turn Taiwan into a global production center for "technical" (or "engineered") textiles and "functional" textiles, and also to upgrade the fashion industry. The target is to achieve an annual production value of NT$580 billion in 2015 (up from NT$450 billion in 2008).

The term "technical textiles" refers to a huge variety of uses outside of the clothing or home-furnishing sectors. "Currently," explains Chiu Sheng-fu, director of the DIIS, "policy is being focused on three main categories of textile use-transportation, manufacturing, and healthcare." Textiles used in transportation include automobile interiors, fabric components of tires, and material for airbags. Textiles used in manufacturing include conductive fabrics for use in the electronics industry, machine belts, and fabrics used in all kinds of equipment in factories.

As for "functional textiles," besides the well-known examples of sweat-transporting, odor-eliminating, and high-elasticity fabrics, other products include clothing, luggage, or tents made from materials that are bulletproof, fireproof, or translucent, or even are capable of producing solar power.

"These are all very high-tech items, with correspondingly high unit costs and prices," says Chiu Sheng-fu. For example, fabrics rolled up inside tires need very strong PET fibers, thermal textiles for medical uses require bamboo-charcoal fiber, and some things even need glass fibers.

Currently technical textiles account for one-fifth of the total production value of textiles in Taiwan. Seeing as the figure in advanced countries is over 40%, there is still a great deal of room for development in Taiwan.

How are these products of the future going to be developed? How can all links in the production chain be correspondingly upgraded at the same time?

Assistant Professor T.H. Ying of the Department of International Business at St. John's University in Danshui points out that Taiwan certainly does not lack the technology to make technical textiles; what is needed is for the government to provide the necessary incentives to encourage large textile makers to invest in facilities and switch over their production lines, so that the technology developed by organizations like the Taiwan Textile Research Institute and the Material and Chemical Research Laboratories of the Industrial Technology Research Institute can be put to use. It is also necessary to link domestic and foreign markets so that new products and new technologies can be turned into new orders from customers.

Functional textiles, meanwhile, are suited to upgrading of small or medium-sized firms. The government should do more to encourage this, as there are many successful examples of such firms among those that have come back from mainland China to invest in Taiwan.

Over the past decade, although the textile industry has always been among the top three foreign exchange earners in Taiwan, total production value has been declining year on year, which is not unconnected to the out-migration of companies. If firms in Taiwan can come up with new products, new technologies, and new operational models, that will not only be good for the companies themselves, it is also the way for Taiwan as a whole to leave behind worries about deindustrialization and rising unemployment.