Prof. Yeh, Kong-Ting
Dean, College of Management, National Taiwan Sport University (NTSU)
President, Taiwan Society for Sport Management (TASSM)
Taiwan's government as well as the general public recently have paid more attention to the development of sports. In all, there are more than 100 sports-related departments in all colleges or universities here. Meanwhile, the demands of sports are arising gradually. Accordingly, the domestic turnover of the sport industries is also on the rise.
However, the competition among the sport industries of different countries is getting fierce within the international economic system. The sporting goods industry which Taiwan used to be proud of has been under great impacts from the overwhelming competition from China and some newly developing countries in Southeastern Asia. Unlike before, the sporting goods demand in Europe and U.S. has been dropping because the economies of the importing countries in Europe or in America are in recession. Thus, the orders of sporting goods are also decreasing. It is impossible not to worry about this bad situation. Besides, it is uncertain if Taiwan sporting goods industry can set another export records. Additionally, it is worthy for us to obverse whether the signing of ECFA will bring the positive influences on the sport industry in Taiwan or not.
Based on the above-mentioned factors, the author of this article tried to analyze the sport industry development situation in Taiwan, so as to make suggestions to the decision makers when they try to develop the strategies related to the sport industry.
The sport industry is a part within the whole economy system of Taiwan. Therefore, to identify the current situation of macroeconomics in Taiwan beforehand may help the readers to have a better understanding related to the position of sport industry in the economy system of Taiwan.
1. From the perspective of Taiwan's macroeconomics
From the aspect of production, after going through the global financial crisis in 2008, the world economy has showed signs of recovering from the sluggish economies. In 2010, it is more certain that the industries have been gradually growing. Surely Taiwan's economy is not exceptional. On August 19th, 2010, the Directorate-General of Budget, Accounting and Statistics publicized the information related to the 2nd quarter national income first statistics, 2010 & 2011 estimated economic growth rates, 2009 household revenue-and-expenditure survey and statistics. Based on the said reports, the 1st quarter economic growth rate was altered from 13.27% (the 1st estimated figure) to 13.71%; as initially estimated, the 2nd quarter growth rate was 12.53%. Compared with that of May, it was 4.87% higher. After the seasonable adjustment, the quarter increased of the growth rate was 1.75%, that is, the annual growth rate is 7.23%. As estimated, the 3rd and 4th growth rates were 6.90% and 1.37%, that is, the annual growth rate is 8.24%. CPI is rising 1.23%, GNP is 13,723.7 billion dollars (429.7 billion USD). Averagely the Gross National Production (GNP) per capita is 14,255.6 billion dollars, which is 447 billion USD. Averagely, GNP per capita is 19,253 USD. From September 14th, 2010 onwards, Taiwan and China signed Economic Cooperation Framework Agreement (ECFA). Taiwanese will be entitled to obtain lower-duty privileges in importing many raw materials and the cost will be greatly cut down. Therefore many entrepreneurs anticipate that until the end of next year Taiwan's production shall be increasing and there shall be considerable profits.
From the all-around consumption level, in 2009 the average dispensable income per family was 888,000 NTD. Compared with 2008, it decreased 2.9%. Excluding the factors of rising number of families and the decreasing number of the people in a family, the average income per capita was 266,000NTD. Compared with 2008, it also decreased 2.6%. The percentage share of disposable income by percentile group of households and the income inequality indexes is 6.34 times more, with an increase of 2.9 times. It indicates the people's consumption expenditure is less and the poor-and-rich gap is wider. However, as expected, the lowest salary level of publicl servants will be uplifted in the next year. Hopefully, the consumption willingness and value could go up.
From the above evaluation of Taiwan's economic situation as a whole, industrial development and the supply shall be stable in next year.. Besides, there shall be more strategies to stimulate people's consumption so as to achieve more effects of the economic virtuous circle.
2. The development of Sport Industry in Taiwan
The article focuses on the development of sport industry within the macroeconomic environment in Taiwan.. The definition of "sport industries" refer to the set of goods (tangible products) and services (intangible products) with homogeneous functions which can meet the demands of consumers' sport behaviors, and can be substituted to one another.(Yeh, 2001).
The followings are the development of sport industries from the aspects of government policies, supply and demand sides..
(1) Government's policies
From the year of 2010, Taiwanese government has taken more actions in bringing up all kinds of sport industries and promotes people to join sports. In the policies and plans of Sports Affairs Council (SAC), Executive Yuan, "Reviving Taiwan's Sports Industries and Promoting Sports and Recreation Service" are listed as the major task. The reason is that the sport industries are regarded as the essential modern and uprising industries which help the promotion of doing sports as well as the national economic development. The followings are the main policies which SAC will implement for the sports industries: 1. According to the Sports Lottery Issuance Regulations, SAC will give counseling service and manage the issuing sports lotteries, etc.; 2. SAC setups the sports development fund and use the revenue of sports lotteries to boost the sports development; meanwhile SAC also reinforces the supervising mechanism and evaluating the efficiency of using lottery surplus; 3. SAC gives counseling service to help professional sports, sports tourism and recreational services industries; 4. SAC regulating the subsiding regulations of developing sports industries and also promote enterprises' investment in sports and recreation industries; 5. SAC is in charge of the establishment of the national sports museum (the official website of Sports Affairs Council, Executive Yuan, 2010). In the aspect of school sports education, it is known that the Ministry of Education in the recently years reinforces the enhancing of swimming abilities of all school students and the promotions of water sports.
For example, the government takes the lead to establish the Civic Sport Centers, National Stadium, and National Training Center and carries out the development, subsiding or counseling cases of the island-around biking trails The relevant law and regulations such as "Sports Industry Development Subsiding Regulations," "Sports Lottery Issuance Regulations," are undertaken and the regulations of Sports Development Fund to carry out projects like Sports Leisure Industry Exhibition, Enhancing the Swimming Ability of School Students, and Swim-Up and the subsidy to the people with chronic diseases who do sports are also put into practice.
From the above-mentioned, the government has setup relevant policies and put the plans into actions. Does it mean that the development of Taiwan's sport industries will be enhanced? Undoubtedly, based on the past 20-years observation of Taiwan's sports development, it is clear that the government dominates the sport promotion; Non-Profit Organizations, such as sports society or association, to initiate and execute sports projects. The investment of the private sectors is not fully investigated or publicized. However, the governmental policies are altered and the economy is unstable from time to time. Taiwan's sports industries, compared with traditionally industries or technology industries are not yet fully developed or invested by the public. And there is no special focus on a certain sports development, so Taiwan's international competitiveness related to sport industry is also limited. Thus, it needs to be taken into account if the government has long-term policies to promote sports and Taiwan's sports industries or simply has short-term visions without sustainable developing concepts.
(2). The aspects of supply
At present, the statistics from many other nations defines sports industries differently. Many separate sports industries are still categorized in other industries, such as all kinds of architecture, manufacture industries, as well as service industries; they are not treated as an independent industrial system (Yeh, 2006). Though sports industries are getting more attention and become more important because of the development tendency. Meanwhile, it has very close relationship with many other industries. Therefore, the unclear categorizations cause difficulties in calculating the industrial values. Thus without proper information as reference, it is difficult to carry out proper strategies to develop sports industries. And this awkward situation is what many other scholars and experts wish to make a breakthrough in their researches.
When reviewing the scopes and classifications of sport industry in Taiwan by referring to the Republic of China (Version 8) from Directorate General of Budget, Accounting and Statistics and All Business Operation, Items of the Department of Commerce under the Ministry of Economic Affairs. Through the comparisons of sport-related business, it can be found that these two governmental units do not share the same classifications. Not only some industrial titles and the definitions are different but also the industrial classifications are diverse. It is impossible to make comparisons of different sports industries. Without saying, it is fundamentally impossible to estimate the industrial values. Therefore, it is an urgent task that our government should standardize the sports classifications as well as definitions of sports industries.
From the aspect of economic production values, because there is no common survey and statistics on sports industries. However, when compared our sports industries with those well developed of sport industry countries, we can cite the top sporting goods, such as bicycle, golf clubs and equipments as well as fitness equipments, etc. Their excellent quality is highly esteemed in the international market and thus they have high international competitiveness. In 2009, their export value is more than 2 billion USD. For most of the other sports industries, their capital is below 5 million USD. Among, the sports service industry and sports facility and construction industry requires higher capital than many other sports industries. For the rest, due to the scale of economy the industry organizations have limited production value. Therefore, most of our sports industries belong to the small-and-medium-sized enterprises. Besides, the major large enterprises have not invested in the sports industries.
Accordingly, what our government shall focus on and what could be done in the near future is to encourage big enterprises to invest in sports industries and to help the establishment of small and medium sports service industries and give relevant support.
As to the single kind of sports, in Taiwan, the most popular sport is baseball. The history of its development in professional baseball industries have been for more than two decades. Currently, the Sports Affairs Council fully promotes "Reviving Baseball Project" and encourages all enterprises to setup their own baseball teams. Thus the level of playing baseball could widen. All levels of baseball games can be put into connections. Furthermore, baseball as the most popular sport of Taiwanese people could be sustainably developed and continued. Likewides, what Taiwan's athletes can compete with other nations in the international sports competition games, such as the Asian or Olympic Game are golf and tennis. The objectives: How to boost the development of sports and gain more support from the public, from the government and from private sectors; how to well use the sports development fund and make it industrialized to enhance the international competiveness; and how to promote sports for all more successfully and efficiently shall not be ignored and shall be carried out with long-term plans.
For the participative sports industries, the Taiwan centeral government will subsidize the local governments which have ideal locations to set up about 50 civic sport centers in the major metropolitan cities all around the island within 4 years and adopt BOT style. How to realize this concept, what facilities shall be installed, and the way to manage the center, etc, it is indeed a great challenge to gain support from Taiwan's enterprises and have their bids so to achieve this objective of the government's plan: all Taiwanese people are engaged in doing sports. It is unsure if to build island-wide bicycle trails can bring prosperity of the tourism, dining service industries and the bicycle and maintenance-related industries. We do not know whether people accept or support the sports lottery issuance, the objects for the sports lottery, the relevant regulations, compensating ratio, sports lottery marketing and its marketing approaches whose expenditure come from the sports development fund. It co-related to the future budget of our government. Now the government fully promotes swimming at schools. It is a question: how does the government draw private investment so as to make up the shortage of swimming pools at schools? In correspondence with community development strategies, viewing the future sports facilities management at these community schools, how to involve the human power resources of approximately 100 sports and recreation departments at colleges or universities? How to help more than 3,000 graduates with professional competencies of sport and recreation to create their own business and provide relevant sports and recreation service in their local communities and further to enhance people's living quality.
In order to develop the above-mentioned sports industries, there must be a single unit within the government structure. This unit should be able to provide assistance to carry out the entrepreneurship establishment policies and provide professional certificates of relevant services or strengthening the service professionalism and also help understand the entrepreneurship loan law and regulations. What is more, it provides counseling service to establish inter-industrial strategy alliances.
(3) The aspects of demand
The traditional values of Taiwanese people paid more attentions to the children's' education and their academic performances. In additions, people thought that to engage in sports means to be a sports teacher, athlete, or to organize sports games ; to take part in leisure activities is equal to hang around doing nothing. These viewpoints are changed with fast information exchanges from other parts of the world and with the encouragement of our government. However, according to the Directorate-General of Budget, Accounting and Statistics, currently the average dispensable income per capita is 266,000 NTD, 2.6% less than last year. Accordingly, the consumption capacity is reduced. Among the expense items, the consumption on leisure, cultural activities and education is 0.6% less than 10 years ago.
Thus to change the sport value from our people, to motivate people to take part in sports, to stimulate sport consumption, and to promote sports products made by Taiwan's sports industries are the major goals. To have all people's engagement is the key to boost the overall sports industries in Taiwan. For instance, the basic goal of learning swimming is to maintain the right to life. Its purpose is not only for bettering health, for training swimming athletes, or simply for self entertainment. It shall be learned as basic skills for everyone. The World Games 2009 Kaohsiung, the 2009 Taipei Deaflympics and the warm-up games of the National Basketball Association (NBA), etc. all proved that holding sports games is a great chance for catching all people's eyes; in the meantime, in the sports events, it is a good timing to apply sports marketing strategies to bring more business opportunities. In accordance with the governmental policies to facilitate the sports industry policies, the market for Taiwan's sports industries shall be good and the future shall be promising.
|C. Questions Review and Analysis
From the above-mentioned Taiwan's macroeconomics and the aspects of the supply and the demand of sports industries, there are issues need to be taken into account as follows:
1. The government does not have a clear overview of the current development of Taiwan's sports industries:
On the government's level, it is now the Sports Affairs Council (SAC), Executive Yuan to guide the development of sports industries in Taiwan. However, the information of the major sports industries in Taiwan, the current product value of all kinds of sports industries, the marketing share of each sport industry and some other important information has not been gathered. Therefore, there is no base to setup national polices on the development of sports industries. In additions, as long as the law or regulations related to sports development, for better understanding and better implementation of sports policies, SAC shall coordinate with other governmental divisions or departments, such as Directorate-General of Budget, Accounting and Statistics and in charge of the classifications and definitions of sports industries as well as the Ministry of Economic Affairs; as to the promotion of water sports, SAC should also build connections with Tourism Bureau of Ministry of Transportation and Communications (National Scenic Areas), with National Fire Agency of Ministry of the Interior, Coastal Guard Administration, Executive Yuan, Construction and Planning Agency of Ministry of the Interior (National Parks), Ministry of Education and other governmental sections which have relevant woks. Without good internal network, the governmental officers can not have an overview and acquire the latest information; moreover, they might not know relevant law and regulations. Under these situations, the promotion of sports industries will be inefficient, if the governmental network is not established.
2. The development of sports industries in Taiwan is not in correspondence with the government policies
Only the governmental policies in coordination with private business operation could stabilize the national economy with sustainable development. For a long period of time, most of sports policies have been mainly promoted by NGOs or school systems. The government seldom involved private business to take part in the sports promotion. Though SAC currently has pushed through relevant plans and measures, the efforts which our government has made shall be put in publicity. Thus the people in the sports industries can be stimulated and further to take more actions in the relevant investment. Through virtuous circle, Taiwan sports industries can be developed as well as European or American countries or as the neighboring countries like Japan, Korea, China and other nations. Sports need all people's attention and it shall be part of people's the daily life. Thus sports products can become people's common consumption and the industries can have sustainable development.
3. Make concrete strategies to give counseling services to all kinds of sports industries.
The government should carry out more concrete counseling strategies to large, medium or small-sized enterprises in Taiwan's sports industries.
(1) Large Enterprises
a. Sports Manufacturers: for example, Johnson, Merida or Giant and other sports equipment companies; at present they focus on improving their international industrial competitiveness, R&D, and marketing capacity. Without saying, it is essential to develop the international marketing talents to meet their demands.
b. The relevant BOT manufacturers of sports industries: for instance, The Pen Bay International Co. offers multiple services. It would need matching service of personnel teams and finds the right the right alliance manufacturers.
c. Reviving Baseball Projects: among them, there are enterprises to sponsor county or city baseball teams. It is important to increase the publicity of successful projects, teams and enterprises. Thus enterprises would have more confidence and feedbacks in sponsoring baseball teams.
(2) Medium-sized enterprises: a great number of sporting goods or equipments manufacturers belong to medium-sized enterprises. Now they are in dire need of professional marketing personnel so as to increase brand publicity and to activate their brands. Besides, the medium-sized enterprises are rather the right type to take part in the OT projects of the civic sports centers which the government is going to build. From the government's side, there shall be one unit which could offer service to explain. Then the entrepreneurs can have better understanding of the national sports centers and more motivations to in bidding the projects.
(3) Small-sized enterprises: To keep the roots of sports industries and to foster local sports atmosphere in Taiwan, it is necessary to support the small-sized sport enterprises, for example, Mini (or individualized) Sports Creative Marketing Company. On this business scale, it is rather labor-intensive and offers services, such as the personnel to provide sports guidance, or to manage promotion activities on local sports, for example, Mountain-and-Sea LOHO Project. With regard to this project, currently there are more than 3,000 graduates from sports and recreation departments in Taiwan. They could be the right potential human power resources to carry out this project. The government shall make good use of young professionals and human resource just like what the government has done for fostering the cultural creative industries, that is, to encourage the relevant-fields graduates to establish their own business. Put the concepts of community empowerment and building into practice, the government can regularly hold seminars to enhance their professionalism and give certificates. Next is to give counseling service to help them apply for bank loans and have local business. In the other way, they help the government to build up the sports facilities. Afterwards, they can be in charge of their local sports and recreation projects assigned by their local governments.
4. The inter-support network among sports industries shall be strengthened.
Many promotions to boost sports activities cannot be accomplished by single sport industry. The sports industries shall buildup consensus to for strategic alliances, such as water sports promotions which require the brainstorm work from the industries, the government as well as the academics. Only doing so, the supply network for water sports can be completed. For example, the waters-relevant departments at the central government, the professors and students from the sports and tourism (or and recreation) educational institutes, all water transportation operators or businesspersons, water sports promotion organizations, restaurants, hotels, travel agents, activity organizers and water-sport association shall be all included in the net of communications. If there is no single section under the government to act as the leader to create a platform for all the said people, it will be extremely difficult to promote water sports and achieve the goal.
5. The key elements to produce the sports service industry shall be reinforced and upgraded.
The major elements to produce the sports service industry are the resource of professional personnel, facilities, capital, and operation strategies as counted as 4 categories. Regarding to the current resource of professionals, the government has not reacted to make adjustments. The government has the least ideas: where to find the resource? How is their professionalism? What subjects shall be strengthened? Nevertheless, looking at the professionals with certificates from the government for the future civic sports centers as well as the personnel for organizing the community sports events, the government cannot react to cooperate with these relevant organizations which are professional to provide classes for the interested; then to further test and award certificates. The demand will not be fulfilled and the promotion of the sports policies will be affected as well. For those who like to create their own business or those who are in need of capital to install facilities to create more revenue, the government shall also hold seminars to help them understand the relevant regulations and procedures to quickly get the loans to start their operation. More important, doing sports is not yet the habit for the Taiwanese people; thus their demand of sports products is not rising yet. If the government does not take the lead to promote sports for the sports industries, the consumptions of sports products will not take the wing.
After analyzing the above-mentioned questions, hereby I would like to make the following suggestions and proposals on the future development of sports industries in Taiwan:
1. Realizing the sports promotion plan and facilitate the government's sport policies: the governmental section shall not pay lid service but assign a single section to actively put into practice, to choose the potential sports industries to give assistance or counseling services; thus, the promotion of the polices could be realized and maximized.
2. Always getting the latest information on the sports industries development: the promotions of all policies need a base as reference. Therefore, the government shall act immediately clarify the present sports industries by taking international sports classification as references and carry out survey to redefine different kinds of sports. Then the government can count the industrial production values and afterwards, based on these statistics, the government can setup the industrial development and counseling policies and to assign a single section to establish the information integration platform of Taiwan's sports industries. Afterwards, the counseling mechanism can be provided so as to broaden the production values of the whole sports industries in Taiwan.
3. Upgrading the service professionalism of sports industries. From the previous analysis, it is the future for Taiwan to develop the service-oriented sports industries. The major feature of the sports service is the frequent interactions and communications between service personnel and customers. Accordingly, the relevant training of the sports service industry should be the main trend. The development of the human resource from all universities and colleges, from the professional organizations which provide training courses and award certificates shall be reviewed by the government to assure the legitimacy of the certificate and the level of the service quality. All the mentioned should cooperate with each other so that the personnel could work with professionalism to offer excellent service. And then the competitiveness of Taiwan's sport industries could be enhanced.
Directorate-General of Budget, Accounting and Statistics, National Income Statistics and Domestic Economic Situations and Future Perspectives (August 19th, 2010)
Sports Affairs Council of Executive Yuan, Creating an Sports Island: Plans, Relevant Projects and Implementation Cases of 2010 at All Counties and Cities of Taiwan (http://www.sac.gov.tw/News/NewsDetail.aspx?wmid=345&typeid=4&No=1265, June 25th, 2010)
Yeh, Kong-Ting, "On the Scopes and Classifications of Sports and Recreation Industries," Sports Management Quarterly (1), pp 8-21 (Taipei City: Taiwan Society for Sports Management, 2001)
Yeh, Kong-Ting, Kao, Chin-Hsung, Chen, Mei Yen and Bai, Wen Huei and others, Survey and Research on the Sports Industries Development in Taipei City, Taipei City: Assigned Project of Taipei Sports Office (2006)