Employment issues rank high on the agenda of governments around the world. The Hong Kong Government also attaches great importance to this subject. Improving employment is one of our main policy objectives.

Economic restructuring, globalisation, wide application of information technology, corporate downsizing and the Asian financial crisis in 1998 as well as the outbreak of SARS last year have brought Hong Kong structural unemployment problems, as well as challenges resulting from cyclical unemployment.

While Hong Kong had enjoyed full employment back in the '80s and '90s, the unemployment rate has been hovering between 5% and 8% in recent years. The rate reached an all-time high of 8.7%, with 310,000 people out of work, last summer following the outbreak of SARS.

Nevertheless, there are signs of improvement in the labour market alongside the recent revival of the local economy. The latest unemployment rate was 7.2%.

Against the backdrop of high unemployment, youngsters lacking in work skills and experience are particularly hard-hit. Of all the age groups, the unemployment rate for young people aged 15 to 24 was the highest, at 11.6%, with 44,000 jobless.

Although it is not uncommon to find in other places around the world youth unemployment rate higher than the overall rate, we must not treat the problem lightly.

Many factors contribute to youth joblessness

The causes of youth unemployment are complex, involving a host of factors relating to the labour market and individuals, such as supply and demand in the labour market; attributes, academic qualifications, skills, experience and aspirations of the youngsters, as well as influence from families and peers.

Young people remaining unemployed may lead to social and family problems, resulting not only in an increase in social cost, but also a waste of human resources. To tackle the situation, the Government is responding positively through an open mind, pragmatic measures and innovative thinking.

Given the rapid changes in the labour market, young people nowadays must equip themselves with, in addition to academic knowledge, a range of transferable skills - such as communication skills, information technology literacy and commercial knowledge, and a positive attitude, being flexible and adaptable as well as committed to lifelong learning, to survive in the new economy.

Plans to enhance youths' knowledge, skills

Against this background, we have gone for the fundamentals by vigorously reforming our education system. To encourage our youths to venture beyond the boundary of conventional academic studies, the Government has invested substantially in ensuring that those with the right motivation and ability for further education are provided with school places and various pathways.

In 2003/04, expenditure on education accounts for nearly a quarter of the total Government spending or $61 billion in money terms. Apart from setting up a Continuing Education Fund of $5 billion in 2002, the Government has just established a qualifications framework to provide clear progression pathways for further education and articulation arrangements to help promote lifelong learning.

While education reform will get to the root of the problem, it will not solve the youth unemployment problem in the immediate term. In view of this, the Labour Department has launched various pre-employment and on-the-job training schemes to enhance the employability of the young people and prepare them to enter the labour market.

From planning to implementation, these initiatives are aligned with the development of the employment market. Emphasis is placed on the co-operation among multi-sectoral "social partners" including the Government, businesses, the social services sector, professional and training organisations as well as labour associations. The aim is to mobilise the whole community and bring in synergy.

Training programmes appeal to youths

Targetting youngsters who do not have a well-planned career path, the Government launched the Youth Pre-employment Training Programme (YPTP) in 1999 and the Youth Work Experience & Training Scheme (YWETS) in 2002. The two schemes are complementary and supplementary to each other.

Through collaborating with non-governmental organisations, they provide personalised "through train" pre-employment and on-the-job training services for each young participant. The annual cost for implementing the two schemes amounts to about $300 million.

YPTP provides school leavers aged 15 to 19 with a wide range of pre-employment training. The focus is on the various skills that youngsters should possess before they start working. These include work discipline, team building skills, job search and interpersonal skills, computer operation and application as well as vocational skills.

Furthermore, employment counselling and workplace attachment are also available. With the assistance of professional social workers, the participants can select appropriate training programmes in accordance with their own aspirations and interests. So far, over 45,000 young persons have been trained under the scheme and close to 70% of them have secured employment. A highly successful scheme, I dare say.

On-the-job training offers chance to gain experience

On the basis of the successful experience gained through YPTP, YWETS was launched in 2002 to provide on-the-job training for young people aged 15 to 24 with education attainment below degree level.

The training, lasting six to 12 months, comprises an induction course intended to impart necessary pre-employment knowledge, career counselling and support services provided by professional social workers, as well as on-the-job training in the form of workplace attachment and other vocational training .

As an incentive to encourage more enterprises to engage YWETS trainees, a monthly training subsidy of $2,000 is offered to participating employers, who will appoint an experienced staff as the mentor to the trainee, for each trainee engaged for a maximum of 12 months.

YWETS trainees will not only be able to acquire vocational skills, they will, more importantly, gain valuable experience. They are also entitled to receive subsidies up to $4,000 for attending relevant training courses leading to vocational qualifications.

Up to now, more than 21,000 trainees have received on-the-job training or other job placement under YWETS, surpassing the initial target of training 10,000 young people within two years.

Programmes are effective partnership efforts

YPTP and YWETS are without a doubt social programmes. The two schemes have attracted the participation of over 6,000 employers, including established companies, small and medium-sized enterprises as well as social services and educational organisations.

They point to an effective partnership of the Government, social services and business sectors. Apart from receiving training, participants will also be provided with guidance, assistance and support by professional social workers in the form of case management, to enable the former to progress gradually along their career paths. The two schemes are well received and supported by the community at large and have received public recognition for their success.

Young people need more room to develop multiple intelligence and creating an enabling environment for youth employment demands more than a single strategy. In a knowledge-based economy, self-employment is an alternative to traditional salaried employment.

Initiative aims to help youths become self-employed

To provide youngsters who have motivation and creativity with systematic training in vocational skills and basic self-employment techniques, the Government has just committed $30 million to launch a one-year 'Youth Self-employment Support Scheme'. The aim is to assist 1,000 youths to become self-employed in areas such as the performing arts, multimedia design, personal care and image building as well as information technology.

Young persons are our valuable assets. The Government will spare no efforts in mobilising all sectors of the community to help generate employment for them. In preparing youngsters to enter the labour market, we will emphasise character building and all-round personal development, in addition to knowledge and skills training, so as to equip them with a positive attitude and outlook on life.

Strategies combine pragmatism, vision

All in all, the Government is adopting strategies which combine pragmatism with vision to promote employment. We shall continue to improve the business environment in Hong Kong and seize the opportunities arising from the "Mainland and Hong Kong Closer Economic Partnership Arrangement".

We shall capitalise on Hong Kong's strategic geographical location and world-class infrastructure, as well as our major economic role in the Pearl River Delta, the Motherland and the Asia Pacific region to attract foreign investment, revitalise the economy and create employment opportunities.

We are committed to upgrading the skills and competitiveness of our working population as a whole through training and re-training. We shall rise to the challenges of the new economy.

Permanent Secretary for Economic Development & Labour Matthew Cheung gave this address at the China Employment Forum in Beijing.