Hong Kong’s competitive edge in post-Covid talent competition
The challenge of talent retention is gaining traction in the City’s policy dialogue for post-covid economy recovery. Per statistics from Census and Statistics Department, the City witnessed a net population decrease of 68,300 year-on-year since 2021. Among the net population decline, 43% (29,500 persons) was caused by a natural decrease, and the remainder 57% (38,800 persons) by net population outflow. Noteworthy is that the City saw an annual net outflow of 60,000 Hong Kong residents, representing a sharp year-on-year increase of 220% compared to the record of 27,300 in 2021.
Per government officials, the net outflow is partially due to a low level of talent inflow during pandemic control. Other reasons may also include the increasing momentum among Hongkongers to settle overseas, given that the visa and residency policies are becoming more friendly in the UK, Canada, and other major economies.
As an initial policy response to the shrinking talent pool, the government has launched the Top Talent Pass Scheme (TTPS), which is expected to bring Hong Kong 35,000 elite graduates or talented high earners annually till 2025. With 7,700 approved cases out of 8,400 TTPS applications processed, the scheme’s current approval rate stands at 92%.
While the City expects to attract top-notch professionals to aid the local brain drain, concerns also pinpoint the need for more policy attention on nurturing local talents.
Indeed, Hong Kong still has to narrow the gap in cultivating locally-trained talents with other competitive economies. Per IMD World Talent Ranking 2022, Hong Kong recorded 14th in the global market competitiveness for talent, sliding three places from the ranking results in 2021. Hong Kong’s overall top strengths are public education expenditure per student, management remuneration, and STEM graduates, while the top weaknesses include education expenditure as a percentage of GDP and cost of living.
When comparing the leading economies in Asia, Hong Kong and Singapore have very similar characteristics, with the exception that Hong Kong is slightly behind Singapore in terms of how well its primary and secondary education system is prepared to meet the demands of a competitive economy. This assessment underscores Hong Kong's room for improvement in producing enough talented individuals from its local population to meet the workforce needs of businesses.
To ensure the sustained growth of Hong Kong as a hub for innovation and technology, it is crucial to promote training and educational programs that equip young Hongkongers with the skills and knowledge needed to compete in the talent pool that the city aspires to become.
Co-author: Ms. Ruoxi Li, Research Assistant, PReCIT, PolyU
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