Explore how automation applications help Taiwan tackle the challenges of an aging population, improving efficiency and sustaining growth.
Table of Contents
The State of Automation in Taiwan in the Context of an Aging Population
Overview of the Aging Population Situation in Taiwan
Taiwan is facing a significant challenge with an aging population. According to United Nations data, by 2023, over 16% of Taiwan’s population is over 65, and this figure is expected to rise to nearly 40% by 2050. This situation is putting substantial pressure on the labor market, especially as the workforce continues to shrink due to low birth rates and increased life expectancy.
The labor market is heavily impacted as older workers tend to have reduced productivity and are retiring early. This leads to a shortage of personnel, increased labor costs, and difficulties for businesses in maintaining performance.
Maturity Level of Automation Technology in Taiwan
Automation has become a key factor in helping Taiwan address the challenges posed by an aging population. In recent years, Taiwan has made substantial investments in adopting automation technology, particularly in the manufacturing and service industries. According to a report by McKinsey & Company, Taiwan’s level of automation maturity is among the advanced countries, with over 60% of large enterprises having implemented automation solutions in their production processes.
However, the adoption and penetration of automation technology among small and medium-sized enterprises (SMEs) remain relatively limited. Many businesses still face challenges in implementing automation due to a lack of financial resources and technical expertise. This is a significant barrier that the Taiwanese government is working to overcome through financial support programs and training for SMEs.
The Need to Optimize Automation Efficiency in Taiwan
In the context of a labor shortage due to an aging population, optimizing automation efficiency has become more urgent than ever. Many businesses in Taiwan are under pressure to improve production and service processes to compensate for the labor deficit. Maintaining and enhancing operational efficiency has become a top priority.
Automation not only helps reduce reliance on manual labor but also improves product and service quality, thereby boosting the competitiveness of businesses. According to a World Economic Forum (WEF) report, Taiwanese companies have reported a productivity increase of 20-30% after implementing automation solutions. This highlights the significant potential of automation in addressing the challenges posed by an aging population.
Automation Platform Transformation and Two Key Trends
Trend of Switching to a Completely New Platform
Switching entirely to a new platform is not just about replacing old technology with new. Taiwanese businesses are actively seeking more comprehensive solutions to optimize processes, enhance productivity, and adapt to rapidly changing markets. Choosing a new platform involves not only modern technology but also meeting specific requirements for efficiency, flexibility, and scalability to provide sustainable competitive advantages.
Benefits of a Comprehensive Shift to a Modern Automation Platform:
- Enhanced Productivity and Efficiency: New platforms often integrate advanced technologies such as AI and Machine Learning, automating more complex processes and reducing human error.
- Improved Data Analytics: Modern platforms enable real-time data collection and analysis, providing businesses with valuable insights for swift decision-making.
- Increased Security: New platforms are typically equipped with advanced security technologies to protect data and systems from security threats.
Foxconn, one of the world’s largest electronics manufacturers, has successfully implemented a completely new automation system in its Taiwanese factories, including industrial robots and smart production management systems. As a result, Foxconn has improved production performance, minimized downtime, and optimized operational processes, contributing to maintaining its leading market position.
Duo-Platform Trend – Using Two Platforms in Parallel to Optimize Efficiency
Duo-platform is a trend of using two different automation platforms simultaneously within the same business to leverage the unique strengths of each platform. One platform may focus on managing production processes, while the other focuses on data management and analytics.
Benefits of Using Two Platforms Simultaneously:
- Cost Savings: Using two platforms in parallel helps businesses avoid high costs associated with replacing the entire system. Companies can retain well-functioning parts of the old system and only invest in necessary components.
- Increased Flexibility: Duo-platform allows businesses to adjust and customize systems according to the specific needs of each department, enhancing performance and adaptability to changes in the business environment.
- Reduced Risk: If one platform encounters issues, the other platform can continue operating, ensuring that the business is not completely disrupted.
Specific Situations Where This Model Should Be Applied:
- Businesses Want to Retain the Old System: Businesses can use the duo-platform model to combine the old system with a new platform, saving costs and minimizing risks during the transition.
- There Are Specific Needs: For example, a manufacturing company may need a powerful automation system for managing production lines while also requiring a different platform for customer data analysis.
- Businesses Are Expanding: Duo-platform is a flexible solution, allowing businesses to scale automation up or down without changing the entire system.
With its benefits and high flexibility, the duo-platform model is becoming a popular solution for Taiwanese businesses to optimize operational efficiency and address the challenges posed by an aging population.
How Taiwanese Enterprises Have Applied Flexible Automation
Manufacturing Enterprises
In the context of an aging population, manufacturing enterprises in Taiwan are facing a shortage of skilled labor. To address this issue, many companies have adopted automation solutions to improve production processes, reduce reliance on manual labor, and enhance efficiency.
TSMC (Taiwan Semiconductor Manufacturing Company) is a prime example of successful automation implementation in the semiconductor manufacturing sector. TSMC has invested in advanced automated production systems, including industrial robots and comprehensive process automation management systems. This not only helps TSMC increase precision in production but also reduces dependence on manual labor, ensuring uninterrupted production despite workforce shortages. As a result, TSMC has maintained its leading position in the global semiconductor industry.
Service Enterprises
In the service sector, the aging population has posed many challenges for businesses, particularly in customer service provision. Service companies in Taiwan have started using automation to improve customer experience and enhance operational efficiency.
Cathay Life Insurance has successfully applied automation in the financial services sector. Cathay Life has implemented chatbot and AI systems to provide 24/7 customer service, efficiently addressing customer inquiries. This not only improves the customer experience but also reduces the workload for staff, increasing customer satisfaction, especially among the elderly, the company’s primary customer group.
Overcoming Workforce Crisis with Automation Solutions
In the context of an aging labor market, adopting automation is not only a choice but a critical need to maintain operational efficiency and market competitiveness. Businesses must carefully consider and choose appropriate migration strategies, whether it’s a complete transition to a new platform or the parallel use of two platforms to optimize efficiency. Implementing flexible and creative automation will help enterprises overcome workforce challenges and achieve sustainable success in the future.
akaBot (FPT) is the operation optimization solution for enterprises based on the RPA (Robotic Process Automation) platform combined with Artificial Intelligence, Process Mining, OCR, Intelligent Document Processing, Machine Learning, Conversational AI, etc. Serving clients in 21+ countries, across 08 domains such as Banking & Finances, Retail, IT Services, Manufacturing, and Logistics…, akaBot is featured in “Voice of the Customer” for Robotics Process Automation” by Gartner Peer Insights, G2, and ranked as Top 6 Global RPA Platform by Software Reviews. akaBot also won the prestigious Stevie Award, The Asian Banker Award 2021, Everest Group’s RPA Products PEAK Matrix® 2023, etc.
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