The island of Taiwan is located at the western edge of the Pacific Ocean, adjoining Japan in the north and the Philippines in the south. Although only 36,129 square kilometers in area, Taiwan has a population of 22 million, making it one of the most densely populated areas in the world. Lacking natural resources, Taiwan has relied heavily on human resource to develop its economy. As a result of sustained and rapid economic growth over the last five decades, the per capita GNP of Taiwan has risen from US$97 per year in 1950 to US$13,235 in 1999, one of the fastest rates of growth in the world. Taiwan now has transformed itself from an agricultural economy into a newly industrialized economy. Although many factors have contributed to the outstanding economic achievements of Taiwan, the effective utilization of its human resources has been particularly crucial to the island’s success (Huang, 1997a).
In the mid-1980s, the global economic boom greatly accelerated the growth of the Taiwan economy and the growth rates were in double digits. The booming export trade spurred on the vigorous development of manufacturing industry, which accounted for 39.4 percent of GDP in 1986 and 38.9 percent in 1987, each a higher ratio than ever before. From 1987 onwards, export expansion slackened while domestic demand strengthened. The dampening of exports reversed industrial growth, resulting in an appreciable reduction in its share of GDP. The rapid expansion of domestic demand had led to the rapid development of the service sector whose relative importance in the economy rose tremendously (see Table 4.1).
The population growth rate during the periods of 1950s and 1960s was very high. However, as a result of the successful implementation of the family planning programs, the rate decreased dramatically to less than 2 percent in the 1970s and kept decreasing to around 1 percent in the 1980s. In 1998 it stood at 0.86 percent. Because of the baby boom in the 1950s and 1960s, the percentage of the population consisting of working-age people has continued to increase. However, it is expected that the ageing of the population will be accelerated in the coming years. The labor participation rate (LPR) was 67.6 percent in 1951, then dropped yearly and remained at 58.0 percent in 1998. While the LPR rate for males showed a downward trend, that for females moved in the opposite direction.