1 December 1998
Speaking Note for Chairman UGC

I am delighted that so many senior business leaders have accepted our invitation to attend this informal get-together.

Some of you may recall that, as part of the UGC's comprehensive review of the development of higher education in Hong Kong - the subsequent report was called simply "Higher Education in Hong Kong" and was published at the end of 1996 - the Committee undertook a round of consultations with most major companies and business organisations. This is, however, the first occasion on which we have arranged such an informal get-together with business leaders.

The main purpose of this evening's meeting is to reach out to the business community, to let you know more about what the UGC sector is currently doing and to listen to your advice and suggestions about what more you think we might be doing to assist and support the social and economic development of Hong Kong and meet your needs for educated and trained manpower as well as research and technology transfer.

But first some basic facts. Hong Kong's higher education system has been greatly expanded in the past two decades, and is now close to being a mass higher education system. Twenty years ago, we provided first degree places locally for only about 2% of the 17-20 age group in just three institutions. It was an avowedly elitist system. Even ten years ago we still only provided places for about 8% of the age group, in just five institutions.

In just 5 years from 1990 to 1995, we doubled the number of first degree places and by 1995 were providing some 14,500 first year first degree places - equivalent to some 18% of the age group - in seven institutions. During the same five year period we also tripled the number of postgraduate places in those institutions. To achieve this involved a total capital investment of more that HK$ 7 billion (that is nearly US$ 1 billion) and it was necessary for the institutions to recruit some 3,500 new faculty, many of them of Chinese origin returning from North America, Europe and Australia, including I might add some very eminent scholars. Now we have eight degree-awarding institutions (with the arrival on the scene of the Hong Kong Institute of Education, which offered its first degree places this year).

Education, including higher education, is a major public investment and hence a matter of intense public interest - even more so in Hong Kong than elsewhere. Some 3% of our Gross Domestic Product, HK$ 43 billion in 1998-99 or about 22% of total Government recurrent expenditure, is being devoted to education. This is, in fact, the largest programme area in terms of public expenditure. Of this sum, one-third is devoted to higher and higher vocational education - a proportion that did not, incidentally, actually change materially during the expansion period.

Direct public subvention, in the form of UGC grants, now provides for about 82% of the operating costs of the institutions - a reduction of nearly 5% since 1990 when tuition fees, the other major source of the institutions' funding, were much lower than they are today (even after being frozen this year at last year's levels).

The UGC, as the Government's principal adviser on the development and funding of higher education in Hong Kong for more than 30 years, obviously has had and continues to have an important role to play in these developments. The Committee, as I am sure you all know, comprises both local and overseas members. The local members are both business and professional people, including several senior local academics appointed ad personam. The overseas (strictly speaking non-local, since one of them is from the mainland) members comprise eminent scholars and university administrators, currently from six countries (seven if Scotland is counted separately!) on four continents and give the UGC its unique and essential internationally informed character.

Apart from advising the Government on the need for and distribution of public recurrent and capital funding for the sector, the UGC also has two other important, but less well-known roles, namely to advise the Government and the institutions on matters of quality assurance in higher education and to bring to bear on the development of the Hong Kong system ideas and best practice from all over the world through the network of international contacts represented by members and their backgrounds.

In recent years, the UGC has introduced a number of new approaches in the quality assurance area which are both innovative and, we believe, effective. These include -

1. two Research Assessment Exercises (so far), which have been recognized by no less an authority than "Nature" magazine as the most sophisticated and effective in Asia, and were recently endorsed, at least in principle, by the Chief Executive's Commission on Innovation & Technology;

2. a round of Teaching and Learning Quality Process Reviews - "audits" if you will of the institutions quality assurance processes in the area of teaching and learning, which have been the subject of much interest and support from the international quality assurance community; and

3. a series of Management Reviews which is about half completed, but which is also being noticed as an innovative approach to quality assurance in this area.

Also being introduced this year, as means of encouraging our institutions to be the best that they can be, is a new scheme aimed at encouraging the development of "areas of excellence". The focus of this scheme is to support the development by the institutions themselves of their areas of strength in education, research and service into areas of excellence which can be recognised as of regional or international significance, which can - in other words - put Hong Kong on the map.

The aim is to develop Hong Kong as a regional centre for higher education, with links to the mainland and more widely in the South and East Asian regions and beyond, as is already the case in Hong Kong's business and financial dealings.

So much by way of my introduction. Now, before opening the session to questions and comments, I should like to invite Nigel French to add a few introductory remarks of his own drawn from his long association with the UGC as the Secretary-General throughout the exciting period from 1990 to the present. [A PowerPoint presentation of his remarks is available here.]