Service industry is the growth engine for Taiwan’s economy, and accounts for almost 70% of GDP and over 60% of employment in Taiwan.

According to the World Trade Organization, service industries could be classified in to 12 sectors: (1) business service; (2) communication service; (3) construction and related engineering services; (4) distribution services; (5) educational services, (6) environmental services; (7) financial services; (8) health related and social services; (9) tourism and travel related services; (10) recreational, cultural, and sporting services; (11) transport services; and (12) other services not included elsewhere. Currently, business, communication, distribution, recreational, cultural, and sporting services are the fastest growing sectors in Taiwan. However, distribution and financial services account for the most GDP.

Though the percentage of GDP service industries account for grows annually, the growth rate for the production of service industries is declining. Services in Taiwan centralize in distribution services; lack of R&D results in low value-added services and restrains the development of in the service industries. Also, the multi-dimensions of service industries make it difficult for policy makers and regulators to formulate appropriate policies.

The Ministry of Economics implemented the program “Three Sectors, Four Transformations,” to boost the economy. This program calls for (1) incorporation of a service element by firms in the manufacturing sector; (2) incorporation of an international reach and advanced technology by firms in the service sector; and (3) achievement of greater distinctiveness by firms in traditional sectors. It is aimed to enhance the overall value-added content of our industrial output, and build up the nation's industrial capacity.