Shu-Po Hsu Calls for Support to Help Traditional Industries Navigate Taiwan’s K-Shaped Economy

Table of Contents

• You might want to know
• Main Topic
• Key Insights Table
• Afterwards...

You might want to know

• How can artificial intelligence strengthen traditional industries and service businesses without leaving smaller firms behind?
• What kinds of government support could help Taiwanese companies manage domestic and overseas risks?

Main Topic

Taiwan’s business community is confronting a widening divide between sectors that are benefiting from rapid advances in artificial intelligence and those that are still working through the demands of transformation. At the annual Merchants’ Day celebration and Golden Merchant Award ceremony, Shu-Po Hsu (許舒博), chairman of the General Chamber of Commerce of the Republic of China, spoke about concerns that the economy could be developing along a “K-shaped” path. Semiconductor businesses remain buoyant as AI expands, while traditional industries and service businesses face more complicated adjustment needs.

Hsu said Taiwanese companies have considerable capabilities, but the structure of the economy matters: Taiwan is made up predominantly of small and medium-sized businesses, including micro-enterprises. These firms may have fewer financial and staffing resources than large companies to invest in new systems, retrain employees, or redesign operations. In his view, the challenge is not simply whether businesses adopt AI, but whether they can put it to practical use in ways that improve productivity, resilience, and prospects for long-term development. He urged the government to strengthen guidance for traditional industries and service businesses as they undertake this transition.

The Golden Merchant Award ceremony marked its 80th edition. Awards were presented across categories that included outstanding foreign commercial offices in Taiwan, outstanding merchants, foreign-invested businesses, established shops, and distinguished long-standing shops. Following a rigorous selection process, 63 recipients were recognized. The organizers described the winners as leaders in their respective fields whose work has contributed substantially to Taiwan’s economic development. The ceremony therefore highlighted both the breadth of Taiwan’s business community and the value of established enterprises alongside newer, technology-oriented sectors.

Hsu described Taiwan’s AI capabilities as internationally competitive and noted that the government wants AI to support a wide range of industries. One potential route is to connect traditional businesses with AI companies and expertise, enabling firms to modernize production, services, and decision-making. When suited to a company’s needs, such applications could help improve competitiveness and build capacity for sustained growth. However, access to technology alone does not guarantee that every business can make the transition. Smaller firms may need practical advice, training, and help identifying appropriate uses before they can adopt AI effectively.

Developments in the labor market also complicate the picture. Hsu observed that many service businesses have begun introducing AI, while some technology companies have already experienced layoffs following AI adoption. This does not mean AI will have the same effect in every sector or workplace. Rather, it underscores the importance of planning for changes to tasks, staffing, and skills as businesses introduce new tools. Hsu argued that AI should help strengthen the resilience of service businesses, not simply serve as a technology upgrade without support for the people and operations affected.

To help firms respond, Hsu said the General Chamber of Commerce would work with the Taiwan External Trade Development Council and the Ministry of Economic Affairs to offer specialized training courses. The stated aim is to help companies apply AI to their operations and transformation plans. Training can be particularly relevant for businesses that need to assess where AI could be useful, how to integrate it into existing workflows, and what capabilities employees may need as practices change. Such support is intended to make adoption more practical for enterprises with limited resources.

Hsu also pointed to the business environment as a factor in the ability of Taiwanese companies to plan and grow. He said a safe and stable political environment would create conditions for continued commercial development. In contrast, shifts in cross-strait relations and international circumstances create uncertainty that can make business decisions more difficult. He called on the government to devote attention to maintaining peace across the Taiwan Strait and keeping the broader situation stable. His comments framed stability not as a substitute for business competitiveness, but as one of the conditions that allow companies to invest and develop with greater confidence.

Overseas expansion was another part of Hsu’s proposals. He suggested that the government could help coordinate resources from Taiwan’s industrial parks and extend that approach to other countries, including the possible establishment of industrial parks overseas. The purpose would be to give Taiwanese businesses opportunities to cooperate when entering foreign markets, pool their strengths, and benefit from a more coordinated presence. Hsu also called for stronger investment safeguards, arguing that companies need a safer environment as they expand internationally. His proposal links overseas growth with collective support: firms could work together rather than face new markets entirely on their own.

The awards to foreign commercial offices in Taiwan also reflected the role of international connections in business development. The Belize Embassy has continued follow-up cooperation under the 2022 economic and trade agreement and worked to expand the Taiwanese market for Belizean products. The Finland Trade Office helped bring about the signing of the first aviation services agreement between Taiwan and Finland in 2025. The German Trade Office recorded bilateral trade totals exceeding US$20 billion for 5 consecutive years. The Netherlands Office Taipei has deepened cooperation between Taiwan and the Netherlands in high-technology industries. The Manila Economic and Cultural Office (MECO) has actively promoted business matching and investment cooperation between Taiwanese and Philippine companies.

The foreign companies recognized in this edition also represented a range of industries, including pharmaceuticals, technology, finance, and manufacturing. Taken together, the award categories and recipients point to a business landscape that depends on multiple sources of activity: established local businesses, foreign investment, cross-border partnerships, and technology-led growth. The ceremony’s recognition of these groups took place alongside Hsu’s warning that the benefits of economic change may not be evenly distributed.

The central issue, as presented by Hsu, is how Taiwan can build on its AI and semiconductor strengths while ensuring traditional industries and service businesses have the tools to adapt. That involves more than encouraging technology adoption. It also requires training, practical guidance, a stable business environment, and support for firms seeking to work together in overseas markets. Because smaller businesses form a large part of Taiwan’s economy, the reach and accessibility of those measures may influence how widely transformation benefits are shared.

Key Insights Table

Afterwards...

The next phase of Taiwan’s economic development will depend in part on whether the advantages created by AI can reach beyond the sectors already moving quickly. Training and hands-on guidance could help smaller firms identify suitable applications, while attention to workforce impacts may make adoption more sustainable. At the same time, stable conditions at home and coordinated support for overseas activity could give businesses a stronger basis for long-term planning.

Hsu’s comments present transformation as a shared responsibility involving businesses, industry organizations, and government. The task ahead is to help traditional industries and service businesses participate in technological change while preserving the strengths of Taiwan’s diverse commercial sector. If support is well targeted, AI, international cooperation, and business resilience may reinforce one another rather than deepen the divide between industries.