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Speech at Luncheon Meeting of The Hong Kong Institute of Directors

Speech by Mrs Fanny Law, GBS, JP

Permanent Secretary for Education and Manpower

at the Luncheon Meeting of

The Hong Kong Institute of Directors

                      on Wednesday, 17 May 2006               



Investing in People –

Building a Lifelong Learning Community



Mr Hui, ladies and gentlemen,


         Thank you for inviting me to lunch and giving me this opportunity to speak on a subject that is critical for the continual success of Hong Kong .


         I am not a financial analyst or planner, but after seven years in the education field, I am fully convinced that investing in people, by taking on education as a career or supporting education on a voluntary basis, is most rewarding.  The only caveat is: do not be a policy maker for this is a “no-win” position. 


Education pays off


         There is ample evidence to show that education pays off for individuals and contributes to economic growth.  Educated workers have three advantages: higher wages, greater employment stability, and more upward mobility in income.  For the community, a better educated workforce results in higher productivity.  And, in a knowledge economy, increased education increases labour force participation, decreases the probability of unemployment, and reduces involuntary job turnover.  The Rand Corporation estimated that 21% of the growth in output in the United States between 1940 and 1980 was the result of an increase in average schooling levels.  Educational attainment also brings other social benefits, such as better parenthood, a more stable society, and less reliance on welfare. 


Profile of the labour force

         So what is the situation in Hong Kong ?  From the time I was in school, the cliché in any textbook on Hong Kong is that human capital is the only natural resources in Hong Kong, and we pride on having a hardworking and versatile workforce that can adapt flexibly to change, e.g. from wigs to plastic flowers, textile manufacturing to real estate.  Nonetheless, before 1997, only 85% of S3 leavers, and only one-third of S5 graduates could continue education at the matriculation level, and subsequently only 18% of them could get into the university eventually.  



         The situation, coupled with the influx of immigrants with a low level of education over the years, has resulted in a labour force about 32% of whom have an educational attainment at or below junior secondary, another 35% at the secondary level.  Only about 19% have a degree and another 9% a higher diploma or associate degree.


         With globalization, the onset of the knowledge economy, the phenomenal economic growth in the Mainland, Hong Kong faces new challenges as we re-position ourselves as an international city of China .  Low skill jobs are fast disappearing, and the demand for better educated workers increases.  A manpower projection study in 2003 predicted that there would be a surplus of about 133,000 workers with secondary education or below, and a shortfall of about 102,000 workers with post-secondary and higher education by 2007.


         Employers today do not just look for academic qualifications.  They expect school leavers to: 


l             have a positive attitude to work and interpersonal skills;

l             be proficient in the use of English, Chinese and Putonghua;

l             be numerate and IT literate; and

l             have a broad knowledge base and problem solving skills. 



Measures to address the problem


         The mismatch of educational attainment and skills with the demands in the workplace is a potential impediment to economic growth, and the cause of unemployment and income disparity which threatens social harmony and stability.  To upgrade the human capital requires the concerted efforts of the community as a whole.  The Government takes the lead and facilitates but cannot do it alone. 


         We proceed in three directions: first, to import talents in the short-term; second, to provide more and diversified learning opportunities for our young people; and third, which is most important for sustainable development, is to develop a culture of lifelong learning in Hong Kong .


(a)      Inport of talents and professionals

         We have relaxed the admission of talents and professionals to meet the needs of the economy.  Since 2003, over 10,000 work visas have been issued.   We also increased the quota for tertiary students, including post-secondary, undergraduate and postgraduate students, to 10% of the overall provision.  Today over 4,000 non-local students are studying in the eight UGC-funded universities in Hong Kong .  Since 2003, over 500 non-local students have been approved to work after graduation.


(b) Expansion of learning opportunities

         Since 2000, we have diversified our education system, provided a second chance for students who had failed in their academic work, and introduced a number of schemes to help the unemployed or existing workers to upgrade themselves.  These include the Skills Upgrading Scheme with an initial injection of $400 million, the $5 billion Continuing Education Fund, and the Project Yi Jin with an average annual subsidy of $50 million.  We also expanded post-secondary education and the participation rate increased from about 33% in 2000 to 66% in the current academic year.


         More fundamentally, we have launched the education reform the core objectives of which are to motivate students to learn and learn how to learn so that they will become lifelong learners.  At the heart of the reform are changes to the curriculum, the approach to learning, and the mode of assessment.  The aim is to achieve learning with understanding and enable all children to succeed by broadening the curriculum and offering electives in the curriculum that suit their aptitude and interests.


         Despite all the ambient noises and complaints about teacher workload, I am pleased to say that the education reform has firmly taken root, and is beginning to bear fruit.  Schools have reported encouraging developments in the culture, as well as student outcome, much to the credit of the more enlightened principals and teachers. 


(c) Lifelong Learning

         In an era of change, it is the lifelong learners who will inherit the future.  To turn Hong Kong into a lifelong learning society, our education and qualification systems must provide multiple progression pathways and articulation of academic and vocational qualifications. 


         To encourage lifelong learning, we have developed a Qualifications Framework (QF).  It is a seven-level hierarchy that orders and supports academic, vocational and continuing education qualifications.  Each level is identified by a set of generic level descriptors, to assure uniformity and coherence of qualifications at different levels in the framework.  The new HK Diploma for Secondary Education, for example, will be equated to level 3 on the QF.  Levels 1 & 2 represent craft and skills qualifications.


         The QF provides users, including students, workers and employers, a clear idea about the standards at each level of qualification, so that learners will have a better sense of direction in lifelong learning and a reference to map out their progression pathways.  An important interface between the QF and the public is the Qualifications Register (QR), which will be a web-based database of all quality assured education programmes.  The QR will be administered by Hong Kong Council for Academic Accreditation (HKCAA).  All programmes, except those provided by self-accrediting institutions, will have to be quality assured by HKCAA and then placed on the QR.  To encourage lifelong learning, we shall promote a credit accumulation and transfer system to facilitate mobility of learners between institutions and programmes.  (slide on recognition of education and training programmes under the QR)


         We have so far established ten Industry Training Advisory Committees (ITACs).  Their role is to formulate a set of forward looking competency standards for each level of qualification that is relevant to the specific industry.  Four ITACs have drawn up Specifications of Competency Standards and three more will complete their work by the end of the year. 




Commitment of employers

         Being a low tax regime, we cannot rely on public funding to cover the cost of upgrading our human capital.   A study carried out by HKU in 2000 shows that only 8% of employers provided formal training for their employees.  Manufacturing firms had the lowest rate of formal job training.  The construction sector had the highest rate because of the existence of a training levy on all construction contracts. 


         Another study by the General Chamber of Commerce in 2004 showed that among 135 companies which responded, 42% claimed to have a well-structured training policy for newly recruited fresh graduates.  The level of employers’ participation in human resource development is much lower than many other countries, e.g. 93% in the United States, 83% in UK, and 68% in Australia.  This is not conducive to the long-term economic growth of Hong Kong.


Motivation of employees

           Hong Kong people are extremely hardworking.  According to a survey by the Federation of Continuing Education, in the 2003/04 school year, over 160,000 people were enrolled in part-time courses of 80 hours.  However, many others, in particular low-skilled and middle-age workers have less incentive to upgrade themselves.  One of the reasons given is long working hours.  The Government has taken the lead to introduce five-day week.  Hopefully, other employers would follow suit, so as to facilitate their staff to undergo lifelong learning. 


Business-school partnership

         Within the Government, EMB has overall responsibility for education and manpower development.   However, the community as a whole must work together to support education, if we wish to nurture a new generation of leaders with a moral purpose, global outlook, and a strong sense of commitment to the family, community, country and the human race.


         There are many ways in which businesses can support education.  The survey by the General Chamber of Commerce which I mentioned earlier, identified several areas of improvement to equip students better for employment.  The education reform addresses most of these issues but we need the support and advice of the business sector to provide opportunities for student exposure and develop business-oriented curriculum in school.


         Over the years, EMB has promoted business-school partnership in a variety of ways and have seen many good practices.  The time is ripe to institutionalize and expand the involvement of businesses.  We shall organise a luncheon to share good practices and appeal to more businesses to join in.  Your Chairman has been invited to the meeting and I am pleased to share with you today areas in which businesses can support education. 


         There are many caring companies and organisations in Hong Kong.  I hope you will pride yourself on joining the rank.  With you support, I am sure we will be mor successful in upgrading the human capital of Hong Kong. 


         If I manage to convince you to go back to your own organization and convince your Board of Directors to invest in people, by supporting school education or supporting lifelong learning among your own staff, for a start, you will find the time and money invested in this luncheon much more worthwhile, and Hong Kong will be a better place to live and do business. 


         Thank you.




Last revision date: 17 May 2006
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