Following is a speech by the Secretary for Education and Manpower, Mr Joseph W P Wong, at the Sun Yat Sen Square Forum Series-I "Re-discovering the Hong Kong Advantage in Times of Change" organised by Committee on General Education, University of Hong Kong today (Friday):
Developing Hong Kong's Human Resource
I think it is as timely as it is meaningful for the University of Hong Kong to organize the series of talks on "Rediscovering the Hong Kong Advantage in Times of Change". The organizer hopes to bring about a new ethos in the society through this series of talks so as to foster a new thinking among the community and students. In view of this, I will avoid detailing the measures on human resource development as announced by the HKSAR Government in the past few years. I will stick to the theme of the talk by explaining the rationale behind the Government's existing policies, highlighting some of the problems which are yet to have satisfactory solutions, illustrating the Hong Kong advantage and pointing out some of its hidden worries. I hope that this discussion will arouse the interest of the community to study thoroughly and reflect deeply on this subject, and to put forward well grounded proposals to assist the Government in its consideration of the future development of human resource strategy.
People are Hong Kong's Most Important Resource
In the past century or so, particularly the fifty years after the Second World War, human resource is the key to the development of Hong Kong's economy. The 50's saw the manufacturing industry, especially the textile and clothing industry, flourish when industrialists from the Mainland came to Hong Kong and turned it into an important manufacturing centre, which laid a good foundation for the development of trade and finance. Another important milestone in the development of the local economy is China's announcement of its decision to open up its economy at the end of the 70's, allowing Hong Kong access to cheap land and labour in the Mainland. This policy not only enabled the expansion of Hong Kong's manufacturing industry into the Pearl River Delta, thus creating numerous investment opportunities for Hong Kong, but also helped Hong Kong transform into a service-oriented economy. Today, Hong Kong is an international hub of trade, finance, transport and tourism. I am going to give you a set of figures to illustrate the momentous changes that happened to Hong Kong in the past three decades.
* In 1970, the manufacturing industry accounted for 31 per cent of our Gross Domestic Product. More than 500 000 workers were employed, representing over 40 per cent of the total workforce in Hong Kong.
* Employment of workers in the manufacturing sector reached its peak in the early 80's. At that time, 900 000 workers were employed. But in 1982, the contribution of the manufacturing sector to our GDP fell to 21 per cent.
* In 1997, employment in manufacturing fell to around 300 000, and its share in our GDP also fell to about 7 per cent.
* According to last year's employment figures, 80 per cent of the employed were engaged in the service industry.
That Hong Kong was able to start from scratch and stride forward with the passage of time owes much to its natural and acquired advantages. The most notable are of course its favourable geographical location and the deep water harbour, which give us tremendous edge in export and re-export trades. Other often quoted factors include an efficient government, the internationally recognized rule of law, an independent judiciary, and the pledge of China to uphold its policy of maintaining the unique status of Hong Kong, etc. But our success should be attributed, most of all, to our dynamic workforce which have served us so well through all stages of our economic development. Our human resource can be roughly divided into four categories. The first category is the industrialists who came to Hong Kong after World War II, particularly those arriving in the 50's. They were mainly in the textiles and clothing industry. Without their knowledge and experience, Hong Kong would not be able to build up a dynamic manufacturing industry within ten odd years, churning out quality goods at low prices which were sold far and wide. Many of these industrialists were subsequently able to respond to market changes and develop other industries.
The second category is the business entrepreneurs who appeared in scores from the 50's to the 80's. A lot of multi-billionaires in Hong Kong nowadays built from nothing in the 50's and 60's. Most of them were refugees. Past and present experiences both local and overseas show that refugees stand a far better chance of success in a foreign land than local people. The hardships they went through would harden their will, and the lack of opportunity cost would make them bold enough to strive for their goals. In the early 80's, the reform and open-up policy adopted by the Mainland offered entrepreneurs in Hong Kong golden opportunities which people in other places, without the connections and the courage, dared not venture upon. During this period, many Hong Kong people started their businesses empty-handed and built them into large operations, relying on their courage, connections, and a modern mind quicker than that of the people in the Mainland. Of course, failure cases abound all the time, but this is only natural. So long as a few managed to succeed, it is enough to propel economic growth.
The third category is the imported talents. Hong Kong has been adopting a very liberal policy towards foreign talents working here. They have made important contributions to our development in the areas of transport, telecommunications, securities and finance. Today these sectors play a pivotal role in our economy. Most of their top managers are local people and so are those in many professional and senior technical posts, this is the result of a free economy and fair competition. Hong Kong must continue to attract talents from all over the world. This was the key to our past success and will be an important cornerstone of our future development. I will speak on this important human resource policy later.
The fourth category, which is also a significant group, is our dynamic and hardworking workers at the basic levels. Hong Kong's economy started to take off in the 50's and its success owed much to the numerous diligent factory workers. From the 70's to the 80's, Hong Kong's economy has restructured from manufacturing-based to service-based. In 1979, about 870 000 workers were employed in the manufacturing industry and the number of unemployed manufacturing workers was 22 000. In 1996, the number of workers employed in the industry fell to about 350 000 but the number of unemployed manufacturing workers also dropped to 18 600, indicating that most of the displaced manufacturing workers were able to switch to other jobs. It also reflects fully that Hong Kong has a dynamic and well-motivated labour force, which contributes much to the economic success of Hong Kong. We are now possibly facing another major restructuring in our economy. What can our workers do in such circumstances? What policies should the Government take? Later, I will spend some time on this topic.
Cultivation of Talents Requires Education Reform
About one month from now, we will enter the third millenium AD. Given our current developments in technology, especially in the areas of biology, space and information, within the next one hundred years or so, if mankind has not already been destroyed either by itself or by the universe, our offsprings will become the "deities" as dreamed by our ancestors thousands of years ago. They can enjoy "longevity" (because body organs can be replaced any time), travel in space (because spaceships have become a common form of transportation) and they are omniscient (because they have portable information transmitter which can be hooked to the internet). I am not daydreaming, what I want to say is that we have entered a new era of unprecedented innovation. One of our major responsibilities to our next generation is to develop their creative power. Therefore, our basic policy on human resource development is to improve the existing education system. This means eliminating all practices which hinder our students' thinking ability, for example, abolishing the Academic Aptitude Test and encouraging innovations, such as developing more private schools. I do not intend to discuss the series of measures to improve education now being contemplated by the Government. But I want to emphasize that whether the reform can be successful hinges on the commitment and ability of the teaching profession. This key factor must be taken into consideration while people are engaged in enthusiastic discussions on how to reform the existing education system. I have said more than once that education is beyond economic interests and our vision is to nurture students to become whole persons. But we need not be too rigid-minded. Education and human resource development are of course closely related. At present, everywhere in the world, including the United States, the most powerful nation in the world, is carrying out education reforms. Would this be just a coincidenceĦH
Human Resource in Support of Economic Development
The direction of Hong Kong's future economic development is taking shape. Our geographical location, coupled with the economic developments in the region including that on the Mainland will enable Hong Kong to remain a regional transport and trading hub. With the construction of the Hong Kong Disneyland, our tourist industry will continue to flourish, if we will improve our customer service. Our sophisticated infrastructure and information network, plus strong government support, will facilitate Hong Kong's development in applied technology, particularly in the areas of information, entertainment, finance, trade and even education. The financial reform that we are now undertaking will help to ensure our leading role in the region. After striking a deal with the United States, China will become a member of the World Trade Organization next year and integrate into the global economic system. In the short-term, this may have adverse ramifications for many enterprises in China. But it will bring about long-term and profound benefits to China, offering China as well as Hong Kong endless business opportunities. However, the situation facing Hong Kong will be quite different from back in the 80's when China first opened up itself. This time, Hong Kong will have to compete with powerful rivals from all over the world for the China market. All in all, external conditions are ripe for Hong Kong to take off again, the question is whether we have adequate and high quality manpower to do so.
Manpower Forecasts for Hong Kong
It is difficult to analyze the manpower needs of various sectors, the number of employees for different jobs and the level of education and skills required on the basis of the direction of our future economic development and the prospects of major economic sectors such as finance, travel and tourism, technology, transport etc. A manpower forecast covering a short period, say one to two years, is not of much use whereas one covering a long period, say ten years, is not reliable. To address this issue, the Government is undertaking three tasks. One is forecasting the manpower and training needs of individual sectors for the next five years according to their past and present performance as well as their potential for future development. We have first picked the travel and tourism industry and information technology sector as the Government has a clear policy to promote the development of these two sectors. We also consider that a timeframe of five years as appropriate. It is not too long, so the information we have and the forecast we make will be more reliable. The period is not too short, either, so we can have time to plan for the necessary training requirements. Reports of these two manpower studies have been completed.
The second task focuses on the manpower and training needs of the financial services sector. The Government has set up a steering committee at the end of 1997 to undertake a feasibility study for a Financial Services Institute. Membership of the committee includes key members of the financial sector, principal personnel of educational and training bodies and representatives from the Government bureaux concerned. The committee has already completed its study and submitted a report to the Chief Executive last month.
For the third task, we have commissioned a consultancy study to find out and analyze the manpower forecasting models of seven countries (Australia, Belgium, Japan, the Netherlands, Singapore, the United States and the United Kingdom) and two cities (New York and London). The findings will serve as useful references for the Government in its further consideration of the feasibility of developing a manpower forecasting model best suited to Hong Kong. This study is still under way.
Let me first brief you on the manpower needs of the travel and tourism industry and information technology sector in the next five years. I will also highlight some human resource issues which are among our main concerns.
Manpower Needs of the Travel and Tourism Industry
Results of the study on the manpower needs of the travel and tourism industry (which includes related industries such as hotels, retail, catering, etc) in the next five years indicate that we have, on the whole, sufficient manpower to support the development of the industry but training, especially those on service and language, has to be strengthened. In fact, the tourism and related industries offered many employment opportunities for people of ordinary education background and with no special skills. The number of people employed at jobs related to the travel and tourism industry grew from about 220 000 in 1981 to about 270 000 in 1986, and further to 370 000 in 1997, in line with the growth of visiting tourists in this period, from 2.5 million visitor arrivals in 1981 to 10 million visitor arrivals in 1997.
The completion of the Disney Theme Park, apart from creating tens of thousands of jobs, will bring in more tourists, benefiting many related industries such as hotels, retail and catering. More importantly, if the service culture which underpins the success of the Disney theme parks can flourish in Hong Kong, then with the Mainland's continued economic growth and open-door policy, our tourism industry will prosper immensely. This is a target which is certainly achievable.
Here I would like to emphasize again the importance of service quality. The main purpose of taking vacation overseas is to enjoy foreign sceneries and experience the different customs and culture. To attract tourists to make return trips, we must impress them with high quality and homely service. Mickey of the Disneyland must be played by a person instead of a robot because the latter could not provide the same kind of service. Regrettably, some have pointed out that our services to customers have not improved as our economy prospers. This is not just a question of education, it is a social phenomenon and a matter of personal attitude, which must be addressed through the joint efforts of the Government and the community at large. To this end, the Administration will strengthen education and training. Let me give you just one example of our endeavours. Early next year, a major exercise entitled "English in the Workplace Campaign" will be launched by the Government, this will include setting aside $50 million to help employees to improve their English. The target groups include members of many tourist-related trades, such as taxi drivers. If employees who deal with tourists and foreigners could not at least communicate with them, how could Hong Kong claim to be an international city? So far, employers have shown strong support for the campaign. But support from employees is even more important. To be able to speak and write proper English is not just about improving the standard of the language. It is about a basic service culture, which is a key element of human resource applicable not only to tourism but also to all other industries. Thus I hope the quality service culture of Disneyland will bring a positive and far-reaching impact on the development of human resource in Hong Kong.
Manpower Needs of the Information Technology Industry
The results of the assessment on the manpower needs of the information technology industry in the next five years indicate that all kinds of expertise are in great demand. These include basic computer skills, maintenance, programming, software development as well as the skill to use existing technology to develop webpages and open up countless commercial opportunities in the on-line business. Although we have invested heavily in promoting the application of information technology in our primary and secondary schools, it will be some time before we see the results. In the short-term, we have an urgent need to train more people to meet different needs. In fact, we have already put in place many training programmes on information technology. For example, of all the students currently studying in various tertiary institutions in Hong Kong, 23 per cent of them, i.e. about 19 000, are taking courses related to information technology. In addition, about 20 000 employees are also taking continuation courses in information technology in tertiary institutions. The Vocational Training Council (VTC) now offers some 7 000 places in information technology courses. This figure does not include the nearly 10 000 places of the short courses run annually by VTC's IT Training and Development Centre. The Employees Retraining Board (ERB) has just started to run a course to train Information Technology Assistants and the response is overwhelming. But we are by no means complacent. The Education and Manpower Bureau is now working closely with VTC and ERB with a view to offering more training in information technology. In the next few years, we hope to organize more training courses, including post-secondary courses at the level of diploma or even degree or above, so as to provide pre-employment and on-the-job training to a large number of people to support the rapid development of the industry.
Information technology is also the subject of one of the three projects to be developed into areas of excellence by our higher education institutions. The University Grants Committee will fund HKU, CU and HKUST in the amount of HK$ 51 million in support of their joint project to promote IT development, including research and manpower training.
I want to emphasize that the development of information technology requires the best talents. This clearly explains the Government's two-pronged approach in human resource development. On the one hand, we will train up a large pool of local talents, and on the other, we will try to attract talents from around the world. Indeed, I expect that the most intense international competition in the next five years will be for innovative technology personnel.
Growth in the information technology industry will definitely result in the creation of many non-technological jobs, in areas such as administration, accounting, marketing etc. The development of information technology will also add value to other industries such as finance, trade, entertainment and education, which in turn will stimulate demand and create jobs. Recent experience in the United States is an obvious example of this development.
Manpower Needs of the Financial Services Sector
In the 1997 Policy Address, the Chief Executive expressed his support for studying the need and feasibility of setting up a Financial Services Institute. A Steering Committee was thereby established towards the end of 1997 to undertake the study. The Committee then commissioned a consultancy study to look into the existing and future human resource development as well as manpower supply and demand of the local financial services sector. The results of the study suggest that we need not be concerned about the quantity of training, but rather quality. It also points out that there is an imbalance of supply and demand in the types and standards of training courses. After deliberating on the findings of the consultancy study and consulting the industry, the Steering Committee is of the view that it is not necessary to establish a training institute specifically for the financial services sector, so as to avoid duplication of resources and confusion regarding the division of work and delineation of roles among the existing training bodies. To strengthen the work of human resource development of the financial services sector, the Steering Committee proposed to set up a new advisory body to provide a proper and standing forum for the industry and the training institutions to discuss the needs of human resource development of the industry.
The Chief Executive has already accepted the Steering Committee's proposal and it is expected that members of the new advisory body will be appointed by the end of this year. I believe that the new body will play an important role in co-ordinating the work of human resource development of the financial services sector.
The Importance of Continuing Education
With our economy showing signs of recovery, the supply of commodities and services in all sectors will increase. However, this may not necessarily lead to a greater demand in manpower because of the adoption of modern technology and management. As a matter of fact, keen competitions in the region or even worldwide have led to demands of higher service standards, prompting employers in Hong Kong to implement innovative measures and render value-added services. Moreover, employers will first require their employees to enhance their productivity before they consider hiring more staff. Elementary workers will also have to be more efficient in order to hold down their jobs. Thus, continuing education and training of employees will become the mainstay in the future development of human resource, and this will be the responsibility shared by the Government, employers and employees collectively. One of the Government's responsibilities is to facilitate the establishment of a comprehensive course accreditation system so that programmes provided and qualifications awarded by training bodies and institutes will be transferrable, and trainees can benefit from an education and training ladder. Further, the Government will continue to take measures to encourage school leavers to continue learning so as to enhance their ability.
Hong Kong's Advantages and Underlying Weaknesses in Human Resource
I have earlier on given a summary of the people who had contributed to the economic growth of Hong Kong in the post Second World War period and broadly categorized them into industrialists from the Mainland, local entrepreneurs who started from scratch, talents from overseas and our dynamic and hardworking workers. Can these four groups of people still be able to meet the needs of Hong Kong in future?
Firstly, a lot of successful industrialists have emerged during the economic liberalization in the Mainland in the past decade or so. They have been making full use of Hong Kong's financial status and our international business connections to expand their operations to Hong Kong and beyond. In the past ten years, we have witnessed the success of many Chinese-funded enterprises in Hong Kong which have been listed in our stock exchange. With the establishment of the new Growth Enterprises Market, more and more enterprises in the Mainland will seek listings in Hong Kong. This will be beneficial both to the Mainland and Hong Kong. As the economy prospers, the need to create new jobs will naturally become greater.
Secondly, Hong Kong has always been the breeding ground of entrepreneurs who start their business from scratch. However, though without actual figures on hand, I feel that the number has obviously dwindled in the past decade. Now, the financial turmoil has dealt a great blow to the Hong Kong's economy but it has also a cooling effect on the younger generation which may re-kindle their enterprising spirit again. The information technology craze may also present an opportune turning point for Hong Kong. I hope that a new generation of entrepreneurs will emerge wielding their innovative power in the internet world. However, they will find the situation quite different from that of the 80's. At that time, when Hong Kong people went back to the Mainland to start their business, they had every advantage in terms of timing, geographical proximity and affiliation with our compatriots. Today, if you want to start your on-line business, you will have to face the toughest competitions from around the world.
Thirdly, the implementation of Admission of Talents Scheme will bring in talents which are needed but unavailable in Hong Kong, including those form the Mainland. This is to ensure that the development of our economy will not be hindered by the lack of knowledge or skill. The Scheme will help raise the overall competitiveness of Hong Kong, facilitate economic development and create employment opportunities. Hong Kong's home-bred talents are never afraid of competitions. We must maintain our openness and confidence, face competitions from outside squarely and continue to learn and to improve.
I am more concerned about the fourth group who are our elementary workers. Now, more than 700 000 of these workers are over 40, have an educational level of S3 or below and their unemployment rate stands at 6.9 per cent. On average, they have 10 to 20 more working years before retirement. Following the gradual revival of the local economy, their employment prospect would improve in the next few years. But looking 10 years ahead, what can we do to raise their employability in an increasingly knowledge-based economy? This will be the greatest challenge in human resource development. Hong Kong is not alone in this, even the strongest economies, like the United States, have to face the problem of the widening gap between people who possess knowledge and those who do not. The income of those who have the knowledge, and the ability to create and update knowledge will increase in leaps and bounds. Conversely, people who are less educated and have neither the ability nor the motivation to learn will find it harder and harder to stay in employment that are satisfactorily remunerated. The Education and Manpower Bureau has embarked on a project to collect information about elementary workers who are relatively older and less educated for an in-depth analysis. It is expected that the results will be available in the coming year, and these will form the basis for Government's consideration of a long-term strategy. I raise up this issue specifically because it meets the purpose of this series of talks in the hope that all sectors of the community, in particular the academics, would devote time and energy to look into this problem.
Recently, our unemployment rate hovers around 6 per cent. However, for young people aged between 15 and 19, the unemployment rate is as high as 29 per cent. This is yet another concern in Hong Kong human resource management. The Youth Pre-employment Training Programme which the Government is now implementing aims to help these young people to find their first jobs by providing them with comprehensive training and workplace attachment. But this will not solve the problem once and for all. We must formulate medium and long-term measures in education and pre-employment training so as to provide young people in this age group with more learning opportunities, so that they may better adapt themselves in a more and more knowledge-based society. This will be one of the core tasks of EMB in the coming year.
The subject of human resource development is profound as well as extensive in dimension. When I first put pen to paper to draft my speech, I wanted it to be precise and concise. But then I find it necessary to present some statistics to support my analysis; and I have also put in some personal observations to provide food for thought. I hope my speech today will stimulate discussion on this subject and result in valuable advice from brilliant minds on how to better develop Hong Kong's human resource.
End/Friday, November 26, 1999