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Speech by CS at CEO Manpower Conference 2017 (English only)
     Following is the speech by the Chief Secretary for Administration, Mr Matthew Cheung Kin-chung, at the CEO Manpower Conference 2017 today (October 26):

Stephen (Chairman of the Hong Kong General Chamber of Commerce (HKGCC), Mr Stephen Ng), Shirley (CEO of HKGCC, Ms Shirley Yuen), Albert (Chairman of HKGCC Manpower Committee, Mr Albert Wong), distinguished guests, ladies and gentlemen,


     According to the latest projections, Hong Kong's labour force will reach 3.67 million in 2019, and then decrease to 3.51 million in 2031, and further down to 3.13 million in 2066. Today one in six people in Hong Kong is aged 65 or above. In 20 years, it will be about one in 3.2 persons, and the number of elderly persons will increase to 2.37 million (31.1 per cent of the total population) by 2036. The projections also suggest that the total manpower supply will fall short of the total manpower requirements, resulting in an overall manpower shortage of 117 900 in 2022. All of these figures reflect that our working population is shrinking fast as a result of population ageing. There is urgency for us to look for measures to ensure sustainable economic development under such a demographic trend.

     While we are facing a shrinking workforce, breakthroughs in innovation and technology development have brought about paradigm shifts in different economic and social spheres, changing our daily lives, business modalities and accordingly the labour market. To maintain our competitiveness in the global arena, we should rise to the challenges by taking a longer perspective and keeping an open mind. We should weigh the impacts of these changes on society and solve problems by nurturing a pool of talent for the long-term development of Hong Kong. We need to make early preparation by improving our education curriculum, promoting lifelong learning to prepare the shrinking workforce for new developments brought about by regional endeavours and technological breakthroughs, boosting local research and development, encouraging adoption of innovative thinking and new technologies by all sectors to scale up productivity of our labour market and enhance the value chain of various industries.

Improving Education Quality

     To help strengthen students' ability to apply interdisciplinary knowledge, problem-solving skills and innovative thinking to their daily life, the Government allocated $100,000 to every primary school and $200,000 to each secondary school in the past two years to procure and upgrade teaching and learning resources for supporting school-based science, technology, engineering and mathematics (STEM) education.  Last December, we released a report to further promote STEM education by adopting a multi-pronged strategy to enrich STEM learning activities inside and outside classrooms, foster professional development for school leaders and teachers, and enhance capabilities of students to pursue creativity, innovation and collaboration and sharpen their problem-solving skills.

     Recognising that education is the key to nurturing talent to sustain Hong Kong's continued development, the Chief Executive Mrs Carrie Lam proposed in her election manifesto to immediately increase recurrent expenditure on education by $5 billion a year. The $3.6 billion first-phase measures were announced in the first week after the current term of Government had assumed office. These enhancement measures include the provision of an additional recurrent monthly cash grant of $25,000 to strengthen IT staffing support for each public primary and secondary school (including special schools) starting practise e-learning and take forward various initiatives which will harness innovation and technology education in Hong Kong.

     In addition, the EDB is organising in collaboration with more than 20 tertiary institutions and relevant organisations the implementation of a Smart City Project Programme in this school year, which comprises an exhibition, study trips, camping activities, seminars, workshops and visits for primary and secondary students. The STEM Education Centre in the Arts and Technology Education Centre in Lok Fu will soon commence operation to provide training and teaching support for primary and secondary school teachers. We will also update the permanent exhibitions of the Hong Kong Science Museum to further promote STEM education by using the museum's facilities.

     As regards post-secondary education, there were some 8 500 undergraduates and postgraduates graduated from STEM-related programmes funded by the University Grants Committee (UGC), accounting for 33 per cent of the total number of graduates in 2015-16. The Chief Executive has also pledged in her Policy Address that an additional $3 billion would be injected into the Research Endowment Fund to provide studentships for local students admitted to UGC-funded research postgraduate programmes to incentivise more local students to engage in research work, thereby promoting innovation and technology development in Hong Kong.

Promoting Lifelong Learning

     The Government spares no efforts in developing a well-equipped workforce by promoting lifelong learning to meet the changing manpower demands of the economy and contribute to the overall competitiveness of Hong Kong as a high value-added and diversified economy.

     Together, the Continuing Education Fund, the Employees Retraining Board and the Qualifications Framework provide a wide spectrum of training modes and programmes in equipping our working population with new or enhanced skills to strengthen their employability and competitiveness.

     With the advent of a knowledge-based economy and the rapid development of technologies, we set up the Continuing Education Fund in 2002 and have since provided subsidies for 760 000 adults aged between 18 and 65 with learning aspirations to pursue continuing education and training courses. We have injected $6.2 billion into the Fund so far, offering 7 800 courses through 300 course providers. Many of these courses have strong information and communications technology elements. To further promote lifelong learning, the Chief Executive has announced in the Policy Address last week that the Government would inject an additional $1.5 billion into the Fund and improve its operation by expanding the range of the courses covered, stepping up quality assurance for the curriculum and enhancing protection for applicants. We estimate that an additional 150 000 people will be benefited from the subsidy and the Fund's operation will be extended to 2024.

     We also accord high priority to improving the employability of local workers by providing market-driven and employment-oriented training services. We have set up the Employees Retraining Board that currently provides some 700 training courses straddling 28 industries through 400 training centres operated by 90 non-governmental organisations across the territory. Over the past 25 years, the Board has provided 2.3 million training places for over 900 000 local workers. This year, the Board plans to provide 130 000 training places including those for courses related to innovation and technology such as animation production, mobile application development, network management and network system security.

     To keep enhancing the capability and competitiveness of the workforce in Hong Kong, we implemented the Qualifications Framework in 2008. At present, about 8 000 recognised academic and vocational qualifications are listed in the Qualifications Register, covering academic, vocational and professional as well as continuing education sectors to promote and support lifelong learning. We need to further strengthen and drive the continuous development of the Qualifications Framework, enhance recognition of qualifications for different industries and provide youngsters with quality-assured pathways for further studies and career development. The Chief Executive has made clear in the Policy Address that the Government would inject $1.2 billion into the Qualifications Framework Fund for the continued implementation of various initiatives.

Driving Research and Development

     The Policy Address also announced that the Gross Domestic Expenditure on research and development (R&D) as a percentage of the Gross Domestic Product will be doubled to about $45 billion a year (i.e. from 0.73 per cent to 1.5 per cent) by the end of the current Government's five-year term of office. To take the lead, the Government has set aside no less than $10 billion as funding for university research, which will be disbursed upon the completion of the review on research funding by a UGC task force led by Professor Tsui Lap-chee.

     To give private companies incentives to increase investment in technological R&D, we will provide additional tax deduction for R&D expenditure incurred by enterprises. The first $2 million eligible R&D expenditure will enjoy a 300 per cent tax deduction and 200 per cent for the remainder. With this measure, we hope to reverse the ratio of public sector versus private sector expenditure on the R&D from government-led to public-private participation, which will make R&D funding more sustainable.

     To train and pool together more technology talent and to encourage them to pursue a career in innovation and scientific research, the Government will also launch a $500 million Technology Talent Scheme in the coming year. One of the initiatives under the Scheme is to establish a Postdoctoral Hub to provide funding support for enterprises to recruit postdoctoral talent for scientific research and product development. In addition, we will provide subsidies for local enterprises on a matching basis for training their staff on advanced manufacturing technologies, especially those related to Industry 4.0, with a view to driving "re-industrialisation".  We will also expand the current Internship Programme to benefit more enterprises and STEM graduates.

     With the rapid advancement in technology, new economic models such as the sharing economy are becoming increasingly popular in the Mainland and overseas cities in recent years, leading to the emergence of many new economic activities. To remove outdated provisions that impede innovation and technology development, we will also review existing legislation and regulations. The Policy Innovation and Co-ordination Unit will be established to work with all policy bureaux to proactively review the policies and legislation within their policy purview to bring them up to date and remove red tape in order to foster the development of a new economy.

Making Forward-looking Manpower Planning

     The continuing development of Hong Kong's economy requires a supply of talent for different sectors. Nurturing local talent is thus the priority task of the Government. In this connection, we will set up a Commission for the Planning of Human Resources, to be chaired by me in the capacity of the Chief Secretary for Administration, to consolidate the resources and efforts of the Government and various sectors (including the business, education and professional sectors), and collectively formulate, examine, co-ordinate and take forward policies on human resources in a holistic manner. Through this initiative, we aim to ensure that our human resources will cater for the short, medium and long-term development needs of Hong Kong and keep up with our country's latest developments as well as the evolving trends in the global market. To this end, we are drawing up a talent list for attracting professionals to Hong Kong in a more effective manner to support our development as a high value-added and diversified economy.

     In parallel, we will enhance Hong Kong's training resources and policy initiatives to fully realise our soft-power and strengthen our training capacity in such areas as aviation, maritime, railway, finance, construction and city management. Prominent examples include the MTR Academy that aims to develop railway executives and professionals in Hong Kong, the Mainland of China and around the world; the Hong Kong International Aviation Academy established by the Airport Authority Hong Kong to nurture local and regional air transport management talents; as well as the CLP Power Academy that I officiated at their inaugural ceremony less than 10 days ago (October 17), by which professional diploma courses and other advanced programmes in power engineering are offered. The Construction Industry Council also plans to establish the Hong Kong Institute of Construction in the first half of 2018.

Unleashing the Potential

     Women are the main carers in Hong Kong families. To protect the interests and well-being of women and unleash their working potential, the Government will make efforts to strengthen the support for families on various fronts, including community and home care support services for the elderly, persons with disabilities and children. Key initiatives include the relaxation of the income limit for low-income families under the Fee Waiving Subsidy Scheme for After School Care Programme through the Community Care Fund and the provision of 2 000 additional fee-waiving and fee-reduction places. In 2018-19, we will inject $400 million into the Partnership Fund for the Disadvantaged, of which $200 million will be mainly used for implementing after-school learning and support programmes. About 130 000 grassroots children are expected to benefit from these programmes, which will alleviate the pressure on working women in looking after their children.

     Some of you may have in mind the question on the possibility of increasing imported labour. As stated by the Chief Executive in the Policy Address, on the premise that local workers' priority for employment will be safeguarded, we will also explore with stakeholders the possibility of increasing imported labour on an appropriate and limited scale. For example, consideration may be given to allowing subsidised elderly service and rehabilitation service units more flexibility in importing carers since the elderly care service sector has persistently suffered from labour shortage and recruitment difficulty. If the formidable challenge of an inadequate workforce is not dealt with properly, Hong Kong's economic competitiveness and its sustainable social development will be seriously undermined. Therefore, relevant policy bureaux and departments will discuss with relevant industries ways to enhance training and attract new recruits, especially young people.


     The measures I have just mentioned have already been covered in the policy initiatives proposed by the current-term Government. Through these measures and the support of the relevant sectors, we believe that these innovative new endeavours will help unleash the potential workforce and provide suitable talent for the long-term development of a high value-added and diversified economy in Hong Kong, thereby contributing to the rapid development of our country and supporting the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development.

     Nevertheless, the Government's effort alone is not enough. We need the wise counsel and support of the relevant sectors including schools, academia, business industry, venture capitalists and professional bodies to help chart the way forward. I welcome any views and suggestions from our business leaders here today on how our planning of human resources for the future development of Hong Kong should be taken forward.

     Thank you very much.
Ends/Thursday, October 26, 2017
Issued at HKT 14:15
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