Research | Social mobility and wellbeing | 2014-11-25

Level up! Let our youth reach for the sky



Aiming to clear the runway for youth to take off and fly high, Bauhinia Foundation Research Centre (the Centre) today (25 November 2014) released a study report on ‘Level Up! Let our youth reach for the sky’, which examines challenges facing young people aged between 15 and 24, particularly on socio-economic changes, education, employment as well as start-up business and its environment in Hong Kong over the past 20 years, and recommends twin sets of ‘Ups’ and ‘Minds’ to help young people.

The Centre’s Chairman Dr Donald Li said, “Young people hold the key to the world of the future, their belief and vision have long-term impact on the development of Hong Kong. If young people are uncertain about the opportunities of moving upward, they will have no interest and passion in the society and thus drag their feet to the development of the city and is harmful to social stability.”

Attitude towards skill-based training

Education remains one of the best ways for young people to move upward and acquire the necessary knowledge to thrive. The findings show that in 2011 the proportion of higher income group for people who attained tertiary education (40%) is larger than the working population with a lower level of educational attainment (7%). Similarly, the proportion of higher income group for people with degree or above qualification (48%) is more than those with sub-degree or equivalent qualification (21%). In other words, young people with higher academic achievement will obtain higher earning power after years of workings, can climb up the social ladder.

Some European countries, such as Germany, set out educational frameworks that recognise vocational training as a legitimate channel to groom skill-based young talents who are not suitable for the mainstream curriculum. Contrary to European countries, highly-educated talents are far more valued than highly-skilled talents in Hong Kong, this limits opportunities and obstructs social mobility.

Youth paying off study and home loans

Post-secondary students need to shoulder more burdens after graduation. Apart from seeking jobs, they have to pay off student loans. The study finds that the monthly income of fresh sub-degree graduates is about HK$10,000 at the initial stage and approximately 10% of this is used for loan repayment.

In Hong Kong, the rise in home prices is faster than the income growth of the local working population. In an attempt to track the changes of home affordability in 2011 and 20 years ago, the study examines the median income of a couple with 10 years of working experience and the price of a housing unit with size below 400 square feet. The finding shows that a couple required 8.8 years of savings to settle the downpayment for home purchase in 1991 but the saving time had increased to 12.7 years in 2011. In the second quarter of 2014, it took the couple 14.4 years to save enough for the deposit, and the monthly mortgage payment accounted for over 40% of the median income. Property prices in Hong Kong are not affordable for most people.

A long way to make a fortune

Looking at the labour market, the findings show high value-added industries such as finance, insurance, real estates and professional business service tend to create more high-paid job vacancies while sectors like wholesale, retail and import/export trades, restaurants and hospitality sectors that require a larger workforce create relatively lower income growth.

With regard to entrepreneurship in Hong Kong, data shows that both the actual number and the proportion of employers to working population have been declining over the past 10 years. Despite a rise in number of business enterprises, most of them are small and medium businesses with 1-9 employees. In other words, successful business startups are rarer and the business environment is more challenging than 10 years ago. Even though more youth in Hong Kong are interested in starting up their own businesses, they unavoidably have to overcome plenty of challenges such as fund raising, putting in place the business knowhow and operational model, establishing social networks, and excelling their businesses with creativity and courage.

Open ‘up’ your ‘mind’ to let our youth reach for the sky

The following ‘ups’ and ‘minds’ are suggested to the Government and business sectors who can help young people overcome hurdles in climbing the social ladder.

Team Up

Reforming the apprenticeship scheme and fostering industry-education collaboration

Match Up

Reviewing the supply of sub-degree graduates in light of the demand of the labour market

Upgrade

Encouraging lifelong learning and enriching the experience of young people

Uphold

Integrating knowledge and experiences systematically under the Qualifications Framework

Money-minded

Easing the financial burden and advocating early lifelong planning

Open-minded

Reducing housing expenses and increasing youth hostels

Bold-minded

Thinking out of the box and creating well-paid jobs

Broad-minded

Creating favourable environment and nurturing young entrepreneurs

Teaming up industry and education helps upgrade the apprenticeship scheme and gain professional recognition. Dr Li said, “In recent years, the United Kingdom and Germany have re-positioned the apprenticeship scheme, creating more diversified career opportunities for the youth with a great success. Hong Kong should also rebrand and recognise the high standard of vocational training.”

Noting that reforming the apprenticeship scheme should gain support from enterprises and employers, the report encourages more employers to take part in designing programme curricula, technical standards, assessment criteria and also to hire more apprentices.

“Comparing with skill-based talents recruited from other companies, apprentices attached to the company will have a stronger sense of belonging and will adapt more easily in a familiar working environment, operational model and work culture. We also suggest the Government to provide a monthly subsidy to employers who offer places under the apprenticeship as an incentive. The scheme is particularly suitable for industry with manpower shortages,” said Lau Ming-wai, the Centre’s Vice-chairman and convenor of the study.

In order to attract more young people to join the high skilled sector, the Centre suggests fine-tuning the label ‘apprentice’ to best reflect the career prospect of the trainee under the apprenticeship scheme. The report also points out that the Apprenticeship Ordinance is not comprehensive as it covers only 45 designated trades that overemphasize on electrical engineering, construction, mechanical engineering industry. The ordinance only applies to youth aged between 14 and 19. The Centre suggests the Government to extend the coverage of more professions (e.g. cruise and maritime entertainment, bartending, information and communications technology services) and remove the age limit for apprentices. Similar to the honours degree classification at the university, completion certificates with grades will have more credibility and differentiation. The certificate of completion can be further graded in accordance with the level of achievement and standard of apprentices. The Government should consider amending the ordinance in the long run.

Level up is easy

In the wake of globalisation, young people should not only equip themselves with textbook knowledge, but also upgrade themselves to the next level by enriching their exposure and experiences. The global economy is shifting from west to east. The Centre suggests the Government to allocate extra resources to provide more activities and courses engaging the latest developments in Mainland China, especially their economic and business development. Ahead of joining the labour market or starting their own businesses, young people should be prepared for the market opportunities arising from rapid economic growth in the Greater China region.

As for young people already in the job market, the Centre suggests the Government to inject more money into the Continuing Education Fund. Young people can increase their competitiveness through lifelong learning and be better prepared for future job promotions. As far as young people at work is concerned, it is important to enhance the Qualifications Framework and recruit more industries to participate in the ‘Recognition of Prior Learning’ and credit-transfer mechanism. An enhanced comprehensive Qualifications Framework will raise the competitiveness of non-academic achievers with experiences and allow them to obtain a recognised qualification for further advancement.

Broad-mindedness and bold-mindedness are two attributes vital to entrepreneurship. Personal effort, however, is not the only success factor. To think out of the box, the Government should team up with the business sectors to create a favourable environment for start-ups and facilitate youth in Hong Kong to level up. All roads lead to Rome, but how can we pave roads accessible to youth in Hong Kong? The Centre suggests the Government to enhance the transparency of the ‘Microfinance Scheme’ approving criteria and to review whether the degree holders can be exempted from taking its training courses. As such, young entrepreneurs who need start-up capital and knowledge can therefore have greater chance of getting approval and sustaining their businesses.

To ease young people’s financial burdens on student loan repayment, the Centre suggests the Government to give an option to borrowers with income below a certain level to defer repayment schedule for up to five years after graduation. Not only can it nurture young people with better financial planning, it can also give young people more flexibility in achieving various life goals.

To uphold Hong Kong’s long-term competitiveness, nurturing creative and innovative minds of our next generation is of paramount importance. The Centre suggests the Government to establish a code of practice and guidelines on crowdfunding in order to strengthen investors’ confidence. The suggestion is favourable to the development of crowdfunding, which in turn stimulates creative thinking of our youth in product design and project development.

To facilitate youth in accessing resources, the Government should provide more serviced offices for young entrepreneurs with a view to lower the startup cost. Revitalising industrial building and encouraging the use of less utilised public facilities such as Youth Square in Chai Wan.

Revitalising the traditional industry with new initiatives

In light of their solid foundation, the Centre suggests the highly competitive industries to develop into high value-added industries with an aim of creating more well-paid jobs. The tourism industry, for example, can be transformed into international meetings, incentive travels, conventions and exhibitions (MICE) tourism. Traditional industries should incorporate more initiatives into their niche products and diversify target customers; this would help create more jobs that are attractive to young people.

“In 2013, Hong Kong launched the pioneering Art Basel. The art exhibition has not only attracted collectors to visit Hong Kong and benefited the art industry directly, other related industries such as legal services, insurance and logistics also benefited. Apart from creating lots of jobs, the art exhibition itself and its related industries require different levels of talents, from low-end to high-end. There is hope for youth to move onto a higher level,” said Lau Ming-wai.

Lau also added, “Another finding of this study is that official data tracking social mobility is not really available in Hong Kong. To better understand the change of social mobility, we suggest the Government to collect and publish socioeconomic data of groups of people periodically and to establish a set of indicators on social mobility in the long run.”

Confronted with a challenging and competitive environment, young people have to acquire not only confidence, ambition, vision and strong personality, they must boldly step out of the ‘comfort zone’ and to think out of the box. “Extrinsic motivation from the Government and business sectors can have a powerful influence on youth development. With good life and career planning, young people can enjoy better quality of life which helps sustain the development and growth of society,” Dr. Li concluded.




Appendix

Full Report (Chinese Only)
Executive Summary
Presentation Materials