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  • Apr 17, 2014
  • Updated: 3:28am
CommentInsight & Opinion

Hong Kong must invest in its people or fall behind

Darryl Jarvis says Hong Kong will certainly fall behind mainland and other regional cities if it doesn't quickly shake off its inertia and renew its commitment to invest heavily in education

PUBLISHED : Monday, 27 January, 2014, 3:21am
UPDATED : Monday, 27 January, 2014, 3:21am

Is Hong Kong destined to be a second-tier Chinese city? Posing this question 25 or even 15 years ago would have seemed absurd. Hong Kong could rightly boast economic dynamism, regional leadership in commerce, trade and finance, and a strategic position as China's window to the world. In terms of wealth, governance, rule of law, property rights and the quality of its institutions, Hong Kong was second to none.

More importantly, Hong Kong's investment in its future, specifically in education, research and development, and the city's pool of human capital, made it an object of policy emulation in the region and beyond.

However, while Hong Kong still likes to think of itself as a leading global city, the evidence that it can continue to do so for too much longer grows less convincing.

There is no magic formula for securing future competitiveness. But there is one necessary ingredient without which economic growth and prosperity are virtually impossible: education.

This might explain why so many states are accelerating their investments in education in an attempt to secure their future, prepare a workforce ready for economic adaptation, and to train the next generation of change agents - the inventors, innovators and entrepreneurs of tomorrow whose discoveries will shape new markets, products and businesses.

Most policymakers already know this. In Hong Kong, however, policy complacency and a continuing "lost decade" of policy inertia point to a looming decline in the ability of the city to compete regionally and globally.

Several indicators point to Hong Kong's relative decline.

First, investing in the future. Hong Kong has historically enjoyed a competitive advantage over mainland China and many states in the region through public policy focused on the development of its education sector, especially higher education. Consistent investment in infrastructure, capacity, talent attraction and research funding placed the sector on the global educational map.

More recently, however, the level of investment required to sustain the sector's competitive advantage has slipped. While spending on education accounts for about 4.2 per cent of gross domestic product, this places it behind countries like South Korea. In absolute dollar terms, Hong Kong's funding of the education sector has grown since 1997, but it is being outpaced by mainland China and South Korea, among others.

Second, the assumptions that Hong Kong enjoys continuing advantages in terms of educational quality, world-class facilities, an internationalised professoriate and competitive research funding increasingly no longer hold true. Capital injections by South Korea, mainland China, Singapore and Malaysia are fast transforming university capacity and quality. A trip to any university in Shanghai, Beijing, Guangzhou, Korea or Singapore, for example, cannot but impress.

By contrast, Hong Kong universities increasingly look like shabby counterparts, with less impressive information and communications technology, facilities and research funding. For local universities, this makes it more difficult to compete for international talent, provide the resources demanded by a globally mobile professoriate, or attract the brightest local and international students.

Third is stagnant higher education participation rates. While competitor economies have been cranking up higher education participation rates in order to prepare their economies to climb the value chain and enhance productivity, participation rates in higher education in Hong Kong remain embarrassingly low by international standards.

In Hong Kong, only about 20 per cent of high-school graduates enter universities, compared with 60 per cent in Korea, 40 per cent in the US and about 34 per cent in Britain.

Hong Kong rations out insufficient university places relative to demand, driving large numbers of students offshore. Hong Kong sent 11,335 students to British universities in 2011-12, ranking sixth among non-EU economies as a source of students, after mainland China, India, Nigeria, the US and Malaysia, all of which have considerably larger populations.

Add in enrolments in Australian, Canadian, US and European universities, and Hong Kong exports a great number of its high school cohort overseas. Some of the best and brightest students, in other words, are lost to Hong Kong; they graduate and remain overseas, or spend some of their most productive years contributing to competitor economies.

Fourth, educating for economic transition. Hong Kong needs a workforce capable of moving its economy up a gear to the knowledge services sector - for example, biotechnology, nanotechnology, professional consulting, medical and technology services, among others. This will help it fend off increasing competition from mainland China. Yet, at this time, low participation rates in higher education leave Hong Kong with insufficient capacity to navigate this transition or meet this competition head-on.

In his recent policy address, the chief executive pledged up to 100 scholarships for the most able Hong Kong students to study at world-leading institutions, and the provision of an additional 1,000 funded places to enable sub-degree students to enter advanced-year undergraduate programmes. These measures will only go a little way to addressing these broader structural problems and the looming skills and knowledge crisis Hong Kong faces. Nor will they do much for the 13,000 students who qualified for university admission but missed out on a place last year.

In the absence of substantial policy innovation, reform of the higher education sector and recognition of the larger challenges ahead, Hong Kong's brightest days may well be behind it and its future as a second-tier Chinese city simply a matter of time.

Darryl S.L. Jarvis is professor and associate dean (research & postgraduate studies) in the Faculty of Liberal Arts and Social Sciences at the Hong Kong Institute of Education

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henry.h.chan1
I am afraid it may be true some day! It saddens me that most of Hong Kong people still believe they have something to teach Mainland Chinese. In fact, Mainland Chinese live in the big city have broader view than Hong Kong people without college education. Harvard Alumni Association has 400 members registered in Mainland and how many are in Hong Kong? Even Oxford and Cambridge Alumni Club in Beijing and Shanghai has hundreds of members. The biggest Oxford & Cambridge annual ball was held in Beijing in 2013. In brief, I remember a Hong Kong judge once said, " a perception maybe a misconception."
pslhk
DslJ is stating the clear realistic and present predicament
that is overlooked amidst the hocus pocus of democrazies
but what to educate to reverse the disruptions caused by sophistries?
-
real and practical history
that atrocious steps have been necessary
to the actualization of ideals
goals approachable but unattainable
-
anglo amercian democracies were founded
on slavery genocides colonial exploitations
and military-financial hegemony
-
political campaigns that culminated in GPCR
were shock therapies for national transformation
from Confucian agrarian to realist pragmatism
needed for dealing with thuggish and adversarial west
-
anglous democracy necessitates foreign exploitation and domination
to satisfy the socio-economic needs of the deprived
that accounts for 80% of these “developed” democracies’ population
-
China’s democratization has been honorable and epic
through disciplined organization and diligence
for HK to restart sustainable development
we need to reorganize domestic priorities
order and law
and not the western disinformation of law and order
-
poverty is a sign of social failure
not a personal credential for welfare entitlements
Instead of mouthing empty slogans
fooling around out of their depth
young people should recognize practical realities
open their minds to practical possibilities in mainland and the world
with a proper sense of self-respect and self-reliance
other technical stuffs are just desserts
bpoon1pc
The problem is more serious when we check the progress of native Hongkongers. We basically can foresee the upward mobility of native Hongkongers will drop not only because we do not invest enough money in Education, we in Hong Kong, are losing the sense to nurture an environment, both from supply and demand to develop top talent. We are moving totally backward for the last 20 years with stronger emphasis in Cantonese based education and in politic. It is crystal clear that the English, Mandarin and Chinese for most Hongkongers are not competitive with our counter parts. From the demand side, we never seriously develop a technology intensive industry as low tech means make money quick and high tech basically loses a lot of money! If we don't seriously change this speculative centric, back to back trading and shallow mindset, HK can't be competitive and there is not much future for Hongkongers in Hong Kong. However, Hong Kong will continue to prosper as a bipolar city with the extreme of globalization and localization happen here. Sad but very true. There is no easy fix at least in 30 years time.
captam
@"In Hong Kong, only about 20 per cent of high-school graduates enter universities, compared with 60 per cent in Korea, 40 per cent in the US and about 34 per cent in Britain."
Well this hasn't done Britain's economy any good by sending ten of thousands of students to almost useless university courses providing them with "Mickey Mouse " degrees in such subjects such as home-keeping, woodwork or David Beckham studies as part of a sociology programme.
SpeakFreely
Professor Jarvis: is complacency not just happening in hk policy but also amongst universities in Hk? We have HkU and few other universities ranked so high worldwide but yet in the past 10 years or maybe even 20 years, we have zero or almost zero major local successful start ups that are over $1B Usd in mkt cap? Where in Silicon Valley u can easily find a startup worth more than 1B. Can you tell us whether keep poring money in education alone will solve the problem? I doubt. I think hk problem is structural as high property price will push out any innovation as majority of investment are poring into non innovative industries. Put it in simple theory, the current hk policy is guiding resource to anything but innovation. Remember how much capital we had raised in dot com era for tech and how many of them are still doing tech that are of high value rather than a simple data centre with zero innovation?

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