Leading the agile enterprise in a rebuilding year

Following is the keynote speech by the Secretary for Labor and Welfare, Mr Matthew Cheung Kin-chung, at the Greater China Talent Management Summit 2010 organized by A-Performers.com on July 6:

Ms Fanny Chan (Publisher and Chief Executive Officer, A-Performers.com, Sing Tao News Corporation Limited), Ms Judy Inn (Executive Director, Sing Tao News Corporation Limited), ladies and gentlemen,

Good morning.  Thank you for inviting me to this high-powered summit this morning, and for the chance to meet and address you all.

Since its inception five years ago, the annual Greater China Talent Management Summit has provided a useful platform for HR managers to enhance their competitive positioning.

I have been given a rather challenging topic to speak on – “Leading the agile enterprise in a rebuilding year”.  As we all know, we are living in a global village.  This means that Hong Kong is quick to share the gains of a global economic boom as well as to bear the pains of a bust.  Our economy is gradually coming out of the woods. Having registered a positive year-on-year growth of 2.5% in the fourth quarter of last year, our Gross Domestic Product grew markedly by 8.2% in real terms in the first quarter of this year.  But given the Eurozone debt crisis and its contagion plus the rather fragile global recovery, there is simply no room for complacence. We need to remain vigilant and agile in response.  Indeed, our unemployment rate has reversed its downward trend since mid-2009 and rose by 0.2% to 4.6% in the period from March to May this year.

Agile enterprises look beyond our local economic performance, since financial capital is very mobile, and so is talent.  They will go to areas that can maximize their return on investment.  The Mainland is of course an obvious and attractive place with a targeted growth rate of around 8% in 2010. Taiwan’s economy is also expected to grow substantially this year on the basis of strong export performance, with some recent forecasts putting the growth rate at 7%.

On the whole, the Greater China region, together with some other emerging Asian economies, has become an economic powerhouse in the global economic recovery after the financial tsunami. The Greater China region is indeed a safer bet for business investment and global talent, particularly when seen against the relatively sluggish recovery in the United States and with the Eurozone debt crisis still unfolding.  

Hong Kong has been a successful international financial centre and a regional business hub, attracting financial capital and talent from all over the world.  Some of the recipes for our success are our rule of law, a clean government, and low and simple tax system. All these are conducive to the conduct of business and inspire confidence.  

But as a relatively mature, developed economy, Hong Kong can no longer compete with regional economies on labor and land costs.  Indeed, we must continue the transformation into a high value-added, knowledge-based economy in order to compete on quality and productivity, while leveraging our increasing integration with the Mainland economy to tap both the “supply” and “demand” sides to the north of our boundary.  On the hardware front, there are current or imminent infrastructure projects that will increase the efficiency of the flow of people and goods.  On the software front, the Mainland and Hong Kong Closer Economic Partnership Agreement (CEPA) and the Framework Agreement on Hong Kong-Guangdong Cooperation (Framework Agreement) offer business opportunities as well as enhanced cooperation.  I urge agile enterprises in the Greater China region to take full advantage of such golden opportunities, while having the peace of mind that comes from our institutional strengths.

Indeed, in a globalised age, talent is one of the world’s most sought-after commodities. After all, quality human capital is the key to building a knowledge-based economy in a globalised environment.  It follows that we need to address the key and thorny question of how we can facilitate our agile enterprises in Hong Kong to win the “talent wars”, not only in attracting outside talent to come to Hong Kong, but also in nurturing our own local talent.

The first essential ingredient for a knowledge-based economy, needless to say, is knowledge itself.  And the wealth of knowledge is closely linked to the education level of our workforce, or what we refer to as human capital.  Expenditure on education alone now takes up a significant 23% of the HKSAR Government’s annual recurrent expenditure – the largest share among all policy areas.  This underlines the importance that we attach to education and our belief that education is fundamental to enhancing social mobility.

At present, we provide 14,500 first-year-first-degree places to about 18% of the 17 to 20 age group through the eight institutions funded by the University Grants Committee (UGC).  For the 2009/10 academic year, the UGC-funded institutions also provide a total of 1,927 senior year undergraduate intake places for graduates of sub-degree programs and students with other relevant qualifications.  We also have many youngsters who receive tertiary education abroad and return to work, further boosting our talent pool.

In view of the rapid development of higher education on the Mainland and in the region, the Government has also implemented measures, including increasing non-local student quotas for local institutions and establishing a scholarship fund to internationalize the tertiary sector and to assist talented non-local graduates to live and work in Hong Kong to enhance the city’s talent pool at the tertiary level.

With the wave of globalization, the advent of a knowledge-based economy and the rapid development of technology, it is of paramount importance that our local workers at all levels are given the opportunity to pursue life-long learning and cope with ongoing changes. Continuing education and training/retraining for those already in the workforce, particularly for less-skilled workers, are therefore high on the Government’s agenda to enhance their employability and better equip them to rise to the challenges in the labor market, thereby improving the overall productivity of Hong Kong.  Let me cite a couple of examples.

First, the Government has injected an additional $1,200 million into the Continuing Education Fund (CEF) in July last year as a one-off measure in the light of the economic downturn. Hong Kong residents aged between 18 and 65 are eligible to apply for reimbursement of 80% of the fees of any of the 7,000 CEF registered courses provided by around 290 course providers upon successful completion of the course, up to a ceiling of $10,000 for each applicant.  

Second, the Employee Retraining Board (ERB), an independent statutory body, has also re-positioned itself to meet future challenges by improving the breadth and depth of its services to provide a flexible, quality and resilient labor force for Hong Kong.

The ERB has expanded its service targets to cover eligible Hong Kong residents aged 15-29 with education level at sub-degree or below in addition to those aged 30 or above with educational level at secondary 3 or below.  At present, it is offering around 540 courses covering 27 industries through a network of more than 70 training bodies at over 340 centers.  

ERB courses are developed based on the Qualification Framework (QF) so that its graduates can secure recognized qualifications, or even professional qualifications, apart from placement support. Up to now, the ERB has provided more than 1.5 million training places, benefiting over 630,000 trainees in total.  In 2010-11, the ERB plans to provide 123,000 training places, and has reserved resources for providing 20,000 additional training places if and when circumstances warrant.

Nurturing home-grown talent aside, as an international, pluralistic and open economy, our door is always open to expatriate professionals and managers from all over the world.  

Overseas and Mainland individuals with special skills, knowledge or experience of value to and not readily available in Hong Kong may apply under the General Employment Policy and the Admission Scheme for Mainland Talents and Professionals. The only prerequisite is that the individual needs to secure an employment offer in Hong Kong before entry. Since the handover in 1997, more than 260,000 professionals from all over the world have come to Hong Kong through these schemes. 

The Quality Migrant Admission Scheme offers another admission channel for overseas and Mainland talents to Hong Kong.  Applicants under this scheme are not required to have secured local employment prior to application or admission. They are assessed under a points-system based on objective criteria such as age, language skills, academic attainment/professional qualifications and work experience. Since its inception in mid-2006, some 1,570 quota places have been allotted to talents from overseas and the Mainland. 

These talents who have been attracted to Hong Kong over the years have helped to enhance the overall quality of our workforce, raise the competitiveness of our agile enterprises, and contribute to Hong Kong’s overall economic success.

As the Policy Secretary responsible for both the labor and welfare portfolios, I should stress that investment in inclusive growth is no less important than investment in tangible economic growth, because social harmony and stability form an essential part of the bedrock of economic success and gives businesses the confidence to invest.  In Hong Kong, social stability is sustained by our long-term strategy of social protection which seeks to build the capacity of the less advantaged and narrow the ability and opportunity gap among the population.  We also invest in human capital in order to get people out of exclusion and poverty and build resilience to risks and vulnerabilities.

On this, the Government’s rather brave decision to put in place a statutory minimum wage (SMW) across-the-board in Hong Kong, despite our basic philosophy and strong belief in minimum interference in the market, is a case in point. 

I am pleased to report that the Statutory Minimum Wage Bill has been thoroughly scrutinized by the Legislative Council after 30 meetings.  I will be on my feet in the Legislative Council next Wednesday (July 14) to resume the second and third reading of this important bill, which aims at devising an optimal statutory minimum wage regime which provides an hourly wage floor to forestall excessively low wages, offer wage protection for our elementary workers and promote social harmony without, at the same time, unduly affecting our labor market flexibility, economic growth and competitiveness as well as causing significant job loss at the low end. This will be a fine and difficult balancing act. It marks a significant breakthrough in protecting the well-being of our workforce at the grassroots level. 

The structural shift of the Hong Kong economy to high value-added and knowledge-based activities will lead to greater disparity in income and wealth distribution.  Such a phenomenon is commonly observed in other knowledge-based and fast developing economies. We are acutely aware of the wealth gap in Hong Kong and are doing everything within our power to alleviate poverty.  Apart from promoting our overall economic growth and equipping our people with the means to move up the social ladder through education and training/retraining, we adopt a pragmatic and multi-pronged approach, mobilizing the private sector, business community and non-government organizations (NGOs) as we know that this is a mammoth task that the Government cannot achieve alone.

The Partnership Fund for the Disadvantaged, introduced in 2005, promotes collaboration among the social welfare sector, the business community and the Government through funding support on a matching basis in helping the disadvantaged, thereby enhancing social cohesion. So far, around $130 million has been approved under the Fund, attracting a total donation of a similar amount from over 560 business corporations to support over 300 welfare projects.  The total number of beneficiaries has already exceeded 650,000.  To keep up the momentum, we have just injected an additional HK$200 million into the Fund.  I wish to appeal to the business community to consider contributing to this meaningful initiative and help the less privileged.

Another example is the $300 million-Child Development Fund set up in April 2008 to promote the longer-term development of children from a disadvantaged background, to help under-privileged children build up financial assets and social networks with a view to reducing inter-generational poverty. We aim to benefit some 13,600 children through the pilot project. 

In the face of a fast changing socio-economic landscape, social welfare nowadays means far more than basic relief work.  It should be viewed as social capital, social investment and social development.  To this end, we need to involve the community in a fuller way. It is against this background that we established in 2001 the Community Investment and Inclusion Fund (CIIF) as a new policy measure. The HK$300 million Fund seeks to promote the development of social capital in Hong Kong. More specifically, it provides seed money to create social capital by fostering mutual support and assistance among people, developing cross-strata neighborhood networks, and promoting community participation and cross-sector collaboration. So far, over 200 projects have been approved under the CIIF and some 530,000 people from different age groups, social strata and cultural or ethnic backgrounds have participated in the projects.

Ladies and gentlemen, I have given you a pen picture of Hong Kong’s economic outlook and institutional strengths in very broad terms.  I have also outlined briefly how we seek to promote social harmony and narrow the wealth gap.  As you all know, Hong Kong came through a number of serious challenges over the past decades.  We managed to weather the storm every time and came out all the stronger and with renewed vigor. Indeed, Hong Kong has not only lived through but thrived from crisis to crisis. The key to every rebound lies in our people.  With few natural resources, the human factor is of paramount importance to propel Hong Kong ahead.   A hard-working, dedicated, resilient and conscientious workforce and our “can-do” spirit underpin our present-day success.

I have full confidence that in our path towards a knowledge-based economy, our investment in human resources – both high-skilled and professionals as well as grassroots workers – should continue unabated. We will keep on investing in education and training and strive to provide an environment conducive to doing business.  We will also keep on improving the social environment, which will foster social harmony and create a fair and caring society, ultimately benefiting our agile enterprises based in Hong Kong.

On this concluding note, ladies and gentlemen, I congratulate A-Performers warmly on aging this prestigious and very meaningful conference.  I am sure that you will all come away far better equipped, informed and much wiser.  Thank you.

Source: http://www.info.gov.hk/gia/general/201007/06/P201007060110.htm

Advertisements

1 Comment

Filed under Economy outlook

One response to “Leading the agile enterprise in a rebuilding year

  1. Pingback: Table of Contents of July 2010 « GOLD MONEY TALK

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s