LCQ8: Enhancing productivity of Hong Kong
Following is a question by the Hon Ng Leung-sing and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (November 18):
According to the Productivity Brief 2015 recently released by the Conference Board, an American think tank, the average annual growth rate of global labour productivity in 2014 was 2.1 per cent, a level similar to that in 2013, but was lower than the relevant growth rate of 2.6 per cent for the period from 1999 to 2006. The Brief projected that the average annual growth rate of global labour productivity in 2015 would further drop to 2.0 per cent, and pointed out that the average annual growth rate of global total factor productivity had remained stagnant in the past three years. In this connection, will the Government inform this Council:
(1) whether it has concrete measures in place to enhance the labour productivity in Hong Kong; if it does, of the contents of the measures (including the industries involved and the effectiveness expected); if not, whether it will expeditiously formulate such measures; and
(2) whether it has compiled statistics on the total factor productivity in Hong Kong; if it has, of the statistics compiled in the past 10 years; if not, whether it will consider compiling such statistics?
My reply to the two parts of the question is as follows:
(1) The Government attaches great importance to economic development, and the labour productivity of Hong Kong is one of the factors affecting economic growth. To ensure that the population quality of Hong Kong can promote the sustained economic development of Hong Kong, the Government is committed to improving education and training, as for example, by providing through the Vocational Training Council different advance education choices for school leavers and working adults to acquire knowledge and skills for lifelong learning and enhanced employability, so as to promote the manpower development of various industries.
In addition, the Hong Kong Productivity Council (HKPC) is committed to enhancing productivity for various industries. Though providing integrated support across the value chain, including product development, consultancy, training and technology transfer services etc, the HKPC promotes businesses' more effective utilisation of resources to increase the value-added content of products and services, with a view to increasing competitiveness and sustainability.
The Government also attaches importance to diversifying industries, thereby meeting the needs of Hong Kong people for start-up initiatives, investment and business operation, and for more choices in employment to put their abilities to full play, so as to maintain the productivity of Hong Kong in the long run. Established since 2013, the Economic Development Commission (EDC) personally led by the Chief Executive has been providing visionary direction and advice on the overall strategy and policy to broaden Hong Kong's economic base and to enhance Hong Kong's economic growth and development; and to explore and identify growth sectors or clusters of sectors which present opportunities for Hong Kong's further economic growth, and recommend possible policy and other support measures for these industries.
The Working Groups under the EDC (namely, the Working Group on Transportation; the Working Group on Convention and Exhibition Industries and Tourism; the Working Group on Manufacturing Industries, Innovative Technology, and Cultural and Creative Industries (MICWG); and the Working Group on Professional Services) have progressively submitted many specific recommendations on promoting the development of industry sectors concerned, which have been endorsed by the EDC and accepted by the Government. For example, the MICWG have submitted a number of specific recommendations, covering further improving the Innovation and Technology Fund, supporting the film post-production sector, and promoting the sustainable development of the fashion industry etc.
The Government will continue to collaborate with the Working Groups of the EDC to study the possible directions to support relevant industries and submit specific recommendations.
(2) According to the Productivity Brief 2015 issued by the American think tank Conference Board, the measurement of total factor productivity covers all inputs in the production process, including labour, innovation and technology application etc. We understand that different economies will, taking account of their economic structure and development etc, compile relevant productivity indicators.
For Hong Kong, the Census and Statistics Department (C&SD) regularly compiles the Labour Productivity Index (LPI), as an indicator of how efficiently labour input is used for generating real output. The labour input adopted by C&SD is measured by the person-hours worked, which is based on the Composite Employment Estimates of the whole economy and the average actual hours of work enumerated from the General Household Survey. Over the past 10 years (2005-2014), the LPI for the Hong Kong economy increased at an average annual rate of 3.3 per cent.
Although the yearly movement of Hong Kong's labour productivity may be influenced by fluctuations in business cycles, Hong Kong's economy has been developing towards the high value-added and knowledge-based direction. With the flourishing development of information and communication technologies since the mid-90's, business operations have more generally adopted new elements of technologies and innovations. At the same time, the continuous quality upgrade of Hong Kong's labour force has been increasing labour productivity and brought many benefits to the Hong Kong economy.
Ends/Wednesday, November 18, 2015