Lack of opportunities, low upward mobility dragging HK's growth
Updated: 2013-01-10 07:07
(HK Edition)
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Unlike emerging economies capable of showing double-digit growth, Hong Kong's developed economy currently enjoys only low single-digit growth. The 1960s saw Hong Kong enter a period of rapid growth as booming light industries established the foundation for the city's industrial expansion. The transformation of our economy into the services sector then granted Hong Kong another opportunity for economic boom.
However, things changed after 1997. People, especially the younger generation, became disenchanted with the lack of opportunities and low upward mobility. Some people with immature thoughts have even linked the slow growth to the handover. But, the real threat is that many young people are blaming the government for the current situation. Given the current political climate, the government's hands are tied and it cannot do much.
This problem is not specifically Hong Kong's. There are many causes for this apparently global phenomenon.
First, the human lifespan is getting longer worldwide. At the onset of the 20th century, the average life expectancy in the United States was 46.3 years for males and 48.3 years for females. By the year 2000, it had hit 74.3 years and 79 years for males and females, respectively. Although Hong Kong's longevity data are not exactly the same, the pattern should be similar. When people become healthier and live longer, they can also work longer. The traditional retirement age of 60 does not seem to fit in with the current situation, and many people can still be productive in their careers after 60. However, if talented and experienced people do not step down from their positions, the young generation cannot move up either. These young people have to accept the fact that 60 is no longer the retirement age. The key point is that young people need to adjust their expectations. But this is easier said than done.
Another reason often cited for slow economic growth is the lack of opportunities. To a certain extent, when a market is developed, it's not possible to ask for rapid growth unless there's a major technological breakthrough. Yes, we need a breakthrough. If we want to see higher growth so as to give our younger generation greater opportunities, we need new breakthroughs in our economic development. This, in turn, calls for more investments in human resources. Only those with the knowledge can compete in a knowledge-based economy. Clearly Hong Kong can only solve the problem of slow upward mobility through education and enlarging the economic pie. Again, this is easier said than done. Education in a knowledge-based economy is expensive. The government is already tied up with a plethora of financial commitments. And the voice for greater social welfare is loud. If the government were to invest more in education without raising social welfare, the political consequences can be huge. Overseas experiences tell us that public education budget cuts are likely to be on the radar if there's a choice between cuts in social welfare and education.
From a long-term development perspective, the government should uphold the expansion of social welfare and concentrate on investing in the future. However, this is not likely as the current political climate calls for a more immediate rather than a long-term solution. People are only being short-sighted in demanding prompt action although such action may not be in the long-term interests of Hong Kong. A universal retirement protection scheme may sound somewhat unaffordable, but the voice of those advocating it is loud and clear. The decisions made nowadays are not based on economic rationality, but on political considerations.
The author is dean, School of Business, Hang Seng Management College. The views expressed here are entirely his own.
(HK Edition 01/10/2013 page2)