With the economy shedding more jobs, corporations shifting back-office functions to the Mainland and unemployment rolls at a 12-month high, Hong Kong workers have plenty to worry about.

Those in the job market face the added dilemma that in the knowledge economy, workers without skills need not apply.

But the doom and gloom hanging over the labour market today makes one question if the track record is fact or fantasy.

Eddie Ng, chairman, International Committee, Hong Kong Institute of Human Resources Management, and managing director, AP, Learning and Development, JPMorgan Chase, said he believes our past success has made us soft.

Another concern is that the Hong Kong workforce has become its own worst enemy. Its past successes have generated confidence, but also a superiority complex that blinds it to competition from neighbouring countries, he added.

It has been said that one of the problems Hong Kong faces in developing manpower is that it must decide which direction it is heading.

This neglect of education for a city as wealthy as Hong Kong has been called disgraceful.

Recent manpower projections estimate that, Hong Kong will face a shortfall of about 16 per cent in manpower supply against requirement by 2005. This translates into about 110,000 people, of whom about three-quarters are in the sub-degree and associate professional levels.

Secretary for Education and Manpower Fanny Law said the government has set a target of increasing the age participation rate in higher education progressively from 30 per cent to 60 per cent within 10 years.

Maintaining and even upgrading the quality of education is another issue that needs to be addressed. Many in the business sector say that the quality of university graduates is declining, with the most common complaint being poor language and communication skills.

But she concedes that universities must ensure that the highest standards are maintained.

According to a recent survey, about one-fifth of the adult population in Hong Kong take up different forms of continuing education on a self-paying basis. The survey also revealed that only 8 per cent of Hong Kong firms have provided formal training for their employees, and most of those were large companies.

Multinational corporations in Hong Kong place high importance on staff training and spend up to 3 per cent of their payroll on training to make employees more productive, Mr Barrett said.

Many local small- and medium-sized enterprises -- which account for about 98 per cent of local enterprises -- on the other hand, consider training an unnecessary cost. They also fear that staff will leave for a higher-paying job if they are better qualified. However, training helps create a sense of loyalty to a company because employees know they will continue to grow if they stay at the firm.

But the gesture is considered a half-hearted attempt at tackling the problem of upgrading the workforce.

More recently, Mrs Law announced on Sept. 7 the launch of the Skills Upgrading Scheme (SUS), which provides focused skills training for in-service workers with secondary or lower education levels.

Mrs Law said that 70 per cent of the cost of the training course would be met by the public purse, with the remaining 30 per cent to be shared between trainees and their employers.

At the APEC High Level Meeting in Human Capacity Building in Beijing this May, Mr Wan said there was a consensus that for businesses and trading areas to remain competitive, they need to implement strategic programmes. These include continuing education or lifetime learning in different forms for different groups of people in society.

Carrie Willis, deputy executive director (Corporate), Vocational Training Council, said that the organisation annually reviews its courses and content to ensure they provide students with the skills employers need.

Geoffrey C K Ng, deputy executive director, (Training & Development), VTC, said that the council regularly examines courses to ensure centres are turning out students with the right skills.

Critics of the VTC say that its centres are wasting resources by still training students for industries that are disappearing in Hong Kong, such as textiles and heavy-mechanical engineering. But Dr Lim said the VTC has reduced the importance of courses that are no longer in demand or restructured others. So instead of teaching textile production, it now teaches about textile and fashion industry R&D, for example.

VTC said it has found that employers increasingly cite generic skills such as communication and English skills as being important in addition to vocational and technical skills in students.

Teaching multiple skills could be considered to conflict with academic disciplines, but this is the reality of the workplace.

One of the accutest manpower shortages is in information technology, where there is clearly a drastic shortage.

A survey by the Vocational Training Council (VTC) estimated that, as at March 2000, over 61,000 persons were engaged in IT-related work in Hong Kong. The survey forecast that the number of IT personnel would increase to 106,000 in 2004, of whom around 55 per cent should be at degree level or above.

Also, a report on Manpower Projection to 2005 predicted that the overall demand for IT personnel in Hong Kong would grow at an average annual rate of 11.8 per cent.

These figures represent an average additional demand of between 8,000 and 11,000 IT personnel annually.

Immediate measures include allowing Mainland IT professionals, as well as streamlining the admission process for overseas IT professionals, to work in Hong Kong. The report also calls for encouraging world-renowned private IT training institutions to operate in Hong Kong, accredit IT skills below degree level, as well as collaborate with the industry to provide professional IT training for secondary school students, among others.

Longer-term measures to be explored include upgrading university graduates in IT and related disciplines and increase IT content in both IT and non-IT disciplines, promote and accept credit transfer/exemption in universities for IT-related disciplines, and set up corporate schools in the IT field in collaboration with the industry, among others.

The report says that at the high-end of its projections, Hong Kong will need an additional demand of 11,000 IT personnel annually. Some 6,000 at degree level or above should be able to be met by the estimated 5,000 students who would graduate from local universities in IT and related disciplines each year.

The remaining gap could be bridged by various means like admission of Mainland or overseas IT professionals, or local talent overseas returning to Hong Kong.

The mobility of talent is a worldwide trend that is sweeping the world's economies, and those that try to stop it run the risk of isolating themselves. Some quarters in Hong Kong have said that importing talent will be detrimental to the local economy and workforce. By contrast, the Mainland, especially the Pear River Delta has benefited tremendously through importing Hong Kong talent.