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Chapter 30: Numbers 1998-2001
30.1 In our Interim Report we gave an analysis of student numbers in UGC institutions up to the year 2001 based upon the Education and Manpower Branch publication "Manpower Outlook in the 1990s (December 1991)" and other sources. We now need to revise and extend that analysis in the light of more recent data and the fact that this report covers the whole of higher education. Current numbers for students in higher education, as we noted in Section C, are in full-time equivalents:

Undergraduates in Hong Kong 56,000
Undergraduates overseas 28,000
Postgraduates in Hong Kong 7,000
Postgraduates overseas 12,000
Students on sub-degree courses 22,000
Continuing and professional education 46,000


These numbers (which apply to 1994/95) will grow in the next few years for a variety of reasons. The full-time undergraduate population in UGC institutions will increase by about 5,000 due to rising intakes in previous years; it will then stabilise. Postgraduate numbers in UGC institutions are planned to reach 8,700 in 1997-98. There will be some growth in sub-degree numbers as the VTC Technical Colleges reach full capacity, and demand for CPE courses is expected to increase. The numbers of Hong Kong students taking first and second degrees overseas have fluctuated greatly in the past, but at present seem to be stable.

30.2 According to "Manpower 2001 Revisited" (Education and Manpower Branch, June 1994), which is based upon current government policy of providing undergraduate places for 18% of the 17-20 years old age group and providing sub-degree places for another 6% (excluding HKIEd), the output from the higher education system which will join the workforce during the first half of our decade (the years 1997 to 2001 inclusive) will be :

Holders of first degree or higher qualification,
Local graduates 56,300
Returned overseas graduates 25,900
Immigrants or returned emigrants 34,400
----------
116,600


Holders of sub-degree qualification,
Local graduates 34,100
Returned overseas graduates 8,100
Immigrants or returned emigrants 8,500
----------
50,700
The new entrants holding degree and higher degree qualifications will in 2001 represent 36% of the workforce at that level. The degree graduate workforce will thus be relatively young, with two-thirds less than forty years old. The sub-degree new entrants will in 2001 form 28% of the workforce at their level, with 69% under forty. One-third of the degree or higher qualification holders and one-half of the holders of sub-degree qualifications in the 2001 workforce will be women.

30.3

The new entrants holding degree and higher degree qualifications will in 2001 represent 36% of the workforce at that level. The degree graduate workforce will thus be relatively young, with two-thirds less than forty years old. The sub-degree new entrants will in 2001 form 28% of the workforce at their level, with 69% under forty. One-third of the degree or higher qualification holders and one-half of the holders of sub-degree qualifications in the 2001 workforce will be women.

Table 30.1 The Numbers and Percentage of the
Workforce of Different Educational Levels Required in 1996 and 2001


Educational Level 1996 2001
  Number % Number %
Lower secondary or below 1,400,100 47.1 1,361,000 43.8
Upper secondary and craft 937,500 31.5 996,100 32.1
Sixth form and technician 250.600 8.4 284,000 9.1
Sub-degree 145,300 4.9 173,400 5.6
First degree and above 241,300 8.1 291,600 9.4
Total 2,974,800 100.0 3,106,100 100.0

Source: EMB Manpower 2001 Revisited


30.4

Table 30.2 Distribution of Total Manpower by Educational Level

Educational Level oversupply 1996 oversupply 2001
Lower secondary or below 84,200 49,800
Upper secondary and craft - 52,800 - 40,600
Sixth form and technician - 23,400 - 45,200
Sub-degree - 2,100 6,800
First degree and above - 5,900 29,200
Total 0 0

Source: EMB Manpower 2001 Revisited


It will be seen that as the result of the recent expansion of the higher education system, the current deficits of labour at both the sub-degree and degree level will be turned into surpluses by 2001. In terms of the requirement in the workforce there will be a 4% surplus of holders of sub-degree qualifications and a 10% surplus of degree holders in 2001.

30.5 It is important, however, to recognise that these calculations are based upon a number of assumptions on the supply side which may or may not prove valid. As we noted in paragraph 30.2, 60,300 of the new entrants to the labour force in 1997-2001 who hold degree qualifications are expected to come from outside Hong Kong, as are 16,600 of the sub-degree holders. Indeed a report (September 1994) by Dr Wing Suen of the Hong Kong Centre for Economic Research (HKU) on labour market conditions suggests that recent immigrants are in general more highly skilled than the indigenous population. During that same period 300,000 people are expected to emigrate from Hong Kong, of whom 13.5% will have degrees and 5.7% sub-degree qualifications, again a higher than average proportion. All of these figures are sensitive to political and economic factors and in particular to perceptions of employment opportunities in Hong Kong and elsewhere.

30.6 A further uncertainty in the figures is caused by migration of labour out of and into China. MR does not take into account the recent scheme to admit 1,000 professionals from China or the 16,500 per year increases in legal immigration. Movement in the other direction is already very substantial and might become important to our present considerations if the context lay outside Hong Kong related activities. We return in more detail to the China dimension in Chapter 33, but the various uncertainties which we have listed suggest that the surpluses in 2001 may prove illusory.

30.7 There are also uncertainties on the demand side. We mentioned in our Interim Report that some employers believed that the projections of need for skilled manpower in "Manpower Outlook in the 1990s" were underestimates. There is certainly some feeling that the implications of IT have not been taken fully into account. MR differs only slightly from the previous report, and the same criticism may apply. The problem is particularly acute in some industries at the sub-degree level. As an example, a recent (August 1995) survey, commissioned by the Construction Industry Training Authority, showed an annual output of 1,079, an annual loss of 765 and 2,844 vacancies. 6,343 of those in employment (one-third of the total) were said to be underqualified, with only 426 places available on upgrading courses.

30.8 On the basis of the findings of manpower surveys of major industries, a report published by the VTC in 1994 showed that overall annual supply met annual demand for technologists, but that there was a small shortage at technician level. The situation was, however, uneven between industries and levels, with electronics, manufacturing and production engineering and textile technology in surplus and architecture, clothing technology and mechanical engineering in deficit at the technologist level. At the technician level, jewellery and textile technology were in surplus while numbers in clothing technology, manufacturing and production engineering, printing and surveying were insufficient. The report did not cover vacancies or underqualification. Within the professions, demand is again variable. A survey carried out in 1993 for the Hong Kong Society of Accountants showed that the demand for partially qualified accountants would increase by 100% in the decade up to 2003 and that for fully qualified accountants by 40% in the same period, much of this related to China-based projects. These figures are much above the supply, which is expected to grow by about 30%.

30.9

The general picture which emerges from the preceding paragraphs is that in the half-decade up to 2001, assuming current levels of production within higher education, the overall output of holders of first degrees or higher qualifications will be adequate, with a 10% surplus in the workforce in 2001 to cushion uncertainties in supply and demand. We do, however, need to consider whether those current levels can be sustained. The POSTE study (paragraphs 1.5 - 1.8) raised considerable doubts as to the availability of qualified entrants to higher education. In our Interim Report (see Annex A, paragraph 30), we gave EMB figures for school leavers possessing at least two A-level passes and grade E in use of English. We now have revised EMB figures based upon a minimum of one A-Level pass, two AS levels and grade E in English and Chinese. The revised numbers assume, in the light of experience, a lower pass rate than the earlier ones. Table 30.3 shows both sets of figures.

Table 30.3: Potential Entrants with HKALE Qualifications, 1995-2003


  Interim Report Revised Actual
1995 18,000   14,105
1996 18,650   13,810
1997 19,000 14,270  
1998 19,300 14,390  
1999 19,450 14,560  
2000 19,550 14,850  
2001 19,700 14,850  
2002   14,680  
2003   14,040  

Source: EMB


30.10

There is a perception in the community (rightly or wrongly) that the assumptions as to the availability of good matriculants on which the recent expansion of higher education was based were over-optimistic, and that some institutions, in some subjects, have filled their places by recruiting students of inadequate quality. Figure 30.1 shows the HKALE scores of students (normalised to a maximum of 10) admitted to UGC institutions on the strength of their A-level scores for the years 1990-91, 1992-93 and 1994-95.

Figure 30.1 HKALE Scores of Entrants to UGC-funded Institutions

Fgure 30.1

Source: UGC Secretariat


It will be seen that although there was a large fall in scores attained between those of 1990-91 and those of 1992-93, the drop to 1994-95 was much smaller. Scores for 1995-96 are similar to those for 1994-95. This suggests that any fall in the overall quality occurred early in the expansion, and that thereafter the standard of the intake has been maintained. Table 30.3 does, however, give rise to some concern about quality in the future. If the revised figures for matriculants prove accurate, there will be no competitive element in entry to the current 14,500 FYFD places. If, however, one considers the government's intention to provide FYFD places for 18% of the 17 - 20 age group, the picture is rather different. The 1995 revised population projections show that this cohort increases in size by 10% between 1995 and 2001. The 18% proportion is shown in Table 30.4.

Table 30.4 : 18% of Mean of 17-20 Age Group, 1995 - 2001

  1995 1996 1997 1998 1999 2000 2001
18% of 17-20 age group 14,450 14,780 14,920 15,210 15,550 15,800 15,900

Source: Census and Statistics Department (unofficial figures)


30.11 Faced with the somewhat conflicting evidence of the preceding two paragraphs, and bearing in mind the supply position described in "Manpower 2001 Revisited", we recommend that government holds entry for young people to full-time first degree courses at 14,500 during the 1998-2001 triennium. That number should include entry to the HKIEd as well as to the other UGC institutions, but not to the APA. It should continue to exclude the 2% of non-Hong Kong students paying standard fees (see paragraph 33.10) who are at present permitted outside target, and we believe that that opportunity should be extended to a further 2% within the 14,500. The fact that, according to MR, the overall supply of graduates is adequate does not, however, mean that this will be true of individual subject areas. It is very important that UGC HEIs respond rapidly to the need for additional numbers, whether expressed by government or private employers. The corollary, within a constant global intake, is that in other areas numbers will need to contract. Our institutions, accustomed to decades of expansion, are unfamiliar with the reduction in size or even closure of less popular activities, but it is a skill which they will have to learn. There is plenty of experience elsewhere in the world on which they can draw.

30.12 Outside the present UGC institutions, the only current supplier of full-time FYFD places is the APA, which in 1994-95, had an intake of 61. The Academy has, however, plans to replace some of its diploma work with more teaching of undergraduates, and the full-time FYFD places may rise to about 104 by 2001. The HKIEd may also be taking small numbers of undergraduates during the next triennium : nothing has yet been agreed but it would be prudent to assume an intake of 100 - 200 by 2001.

30.13 Both the OLI and the CPE units of other HEIs will make an increasing contribution to first degree output in the coming years. Even if our recommendation in paragraph 24.9 is followed, however, their total subsidy from public funds will still be slight, and numbers should be determined by demand for "second chance" opportunity. In the longer term, numbers are likely to fall as a result of the recent increase in full-time opportunity and the through-life educational role of these bodies will become dominant.

30.14 Postgraduate numbers require special consideration. Taught postgraduate (TPg) courses often have a strong affinity with CPE. The fte number of TPg students is expected to rise to 5,110 in 1997-98, although excluded from that number are those on nominally self-funding courses. As we explained in paragraphs 12.3 and 27.11, taught master's courses will increase in numbers and importance in future years, although it does not follow that this growth should all be supported from public funds. The number of taught postgraduate students whose courses should properly be publicly supported is in fact closely related to undergraduate output. Since this is now stabilising, we recommend that subsidised TPg numbers should also do so in the 1998-2001 triennium at slightly above the 1997-98 level, but we have to add to this an allowance for the introduction of PGDE programmes at HKIEd. We suggest 5,600 fte by 2000-01 including up to 2% from outside Hong Kong, with a further 2% permitted outside target. This still leaves the institutions free to take additional students from Hong Kong or elsewhere (MBAs for example) at cost.

30.15 Research students (see paragraphs 13.1 and 28.2) still largely serve the internal purposes of the HEIs. Overall employment demand for those with higher degrees does, according to MR, fall far below supply (37,200 needed in 2001, compared with 69,800 available). There is in fact a worldwide problem with the over-supply of PhD's (estimated in the United States to exceed 25%), who may not get jobs appropriate to their talents and qualification. To quote one American author, we need to "produce research without producing the disillusioned." Nevertheless, we are not inclined to recommend a reduction in the number of research students. Apart from their institutional role, we believe that the presence of employees with higher degrees, even when there is no strict occupational requirement, can give firms a useful capacity to analyse and interpret for their benefit high level work both in Hong Kong and in other countries and cultures.

30.16 We recommend that for the 1998-2001 triennium the research postgraduate (RPg) student numbers remain at their 1997-98 level (3,595), but within these numbers the permitted proportion of non-Hong Kong students be raised to one-third. We are at present engaged in a study of research student numbers, their means of support, and their allocation to institutions, in an attempt to put the whole of this area on a more rational basis. It is much less subject to market influences than in the case of taught postgraduates.

30.17 As we noted in paragraph 30.2, it is current government policy to provide publicly-funded sub-degree places for 6% of the 17-20 year old age group compared with 18% degree places. This ratio of 1 to 3 seems low in relation to world-wide experience of relative demand. In most countries, with the possible exception of Germany, there has for many years been a shortage of sub-degree holders, but an adequate supply overall of degree graduates (albeit shortages in some subject areas). Even allowing for external sources of supply (paragraph 30.2), the ratio for the new entrants in 1997-2001 only improves to 1 to 2.3. Output at the beginning of that period (1997) is expected to be in the ratio 1 to 1.73, although this changes to 1 to 1.36 if student and pupil nurses and non-graduate teachers are included. According to MR, the actual ratio in the total labour force in 1991 and the projected demands up to 2001 all lead to desired ratios in the range 1.62 to 1.68. A pointer to the fact that Hong Kong is beginning to experience the same imbalance as the rest of the world lies in the survey by the Construction Industry Training Authority mentioned in paragraph 30.7, where graduate substitution for technician labour is recorded for the Building Services area.

30.18 It seems probable that a ratio of sub-degree places to degree places somewhat larger than the current projections would be more satisfactory in terms of subsequent employment. Any change would, however, be difficult to implement. Because of perceptions about status and earning power, any educational system offering courses at degree, sub-degree, technician and craft level will find the upper levels filled and the lower ones facing recruitment problems if the total number of qualified entrants roughly matches the available places, as is the case in Hong Kong. Currently the 18% degree places are filled (with occasional difficulties in some subject areas and some worries about quality), the 6% sub-degree places are also filled, but, as was pointed out in the 1994 VTC Report (mentioned in paragraph 30.8), there are empty places on courses for craftsmen.

30.19 Any attempt to increase the number of sub-degree places at present would simply add to the vacancies on technician and craft courses, unless the extra places were found by reducing entry to degree courses, which is an improbable scenario in terms of current expectations among young people. We therefore recommend that the entry to sub-degree courses in the triennium 1998-2001 should remain, in the subvented institutions, at present levels (for the UGC institutions excluding HKIEd, 9,450 fte). Exceptionally, the sub-degree numbers at HKIEd should be allowed to increase from 4,950 to 5,200 to accommodate additional provision of kindergarten teachers.

30.20 Further growth of initial higher education depends upon increased supply of qualified entrants and thus changes within the school system. If such growth becomes possible, we are quite clear that it should take place largely within those institutions under the auspices of the VTC. It is improbable that any substantial expansion can or should take place before 2001, but that should not preclude planning.



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