Taiwans economy faces enormous challenges and might fall into the middle-income trap in the next decade, according to the regions top think tank.
Taiwan must make economic reforms, boost investment, and raise wages, according to the islands Academia Sinica.
In the past ten years, Taiwans average economic growth dropped to 3.82 percent, while annual salary growth was only 1 percent.
The research group believes that the driving forces behind industrial transformation are innovation and soft skills along with improved products and services.
Taiwan must speed up cultivation of talent, improve the environmental impact assessment system, reform taxes and raise administrative efficiency, the proposal pointed out.
Government agencies and enterprises need to cooperate to cope with the overwhelming changes brought by the Internet and to maintain the competitiveness of Taiwanese industries, the proposal added.