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FEBRUARY 25, 2000 VOL. 26 NO. 7

Hoping to Plug That Hole

Hong Kong and Singapore address a skills shortage

Be careful what you wish for, you just might get it. When the Hong Kong government launched a nearly $100-million venture capital fund two years ago, its aim was to kickstart an IT revolution. Something clicked. Now the SAR has an epidemic of dot-com fever - and the government has a new headache: how to address a chronic skills shortage that is threatening to smother its new baby at birth.

Hong Kong's business community has no doubt where to place the blame for their recruitment problems. For years, the government advocated the finance and real-estate industries at the expense of IT. Few students were interested in taking science courses and many who did found themselves venturing abroad upon graduation.

Now the authorities are trying to redress the balance by encouraging Hong Kongers to become more tech-savvy. According to government figures, 19,000 university students are taking technology-related courses, with a further 20,000 workers studying ITpart-time. But filling the labor market with a steady supply of future graduates is little help to firms in need of warm bodies right now. To ease the crunch, the government has done the unthinkable. It has thrown open the doors to talent from the mainland.

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Long afraid of being swamped by refugees, the government has always kept a tight lid on immigration from the north. But desperate to tap China's pool of science and engineering graduates, many of whom have been proving their worth in Silicon Valley, Hong Kong has instituted a new program that allows employers to recruit holders of science doctorates from China and Eastern Europe. Candidates will get fast-track status, with the Immigration Department promising to process applications within three weeks.

Since the scheme was launched in December, just nine applications have been received. But that number is expected to grow substantially in the months ahead. Because the program does not have a quota, thousands of mainland Ph.Ds could potentially be granted Hong Kong work visas.

The government still has critics. Trade unions are bitterly opposed to the influx of migrant labor, and even techies openly question the policy. "PhDs are not necessarily the best IT professionals," says Lily C. Q. Chiang, chief of Internet and multimedia design house E1 Media Technology. "That already shows that [the government is] not responding to what the market needs." Still, a wrong-headed policy is better than none, admits Chiang: "They are more serious than before. At least now they're talking about technology."

Theoretically, the booming job market will also tempt home Hong Kongers working abroad. "We want to reverse the brain drain," says Stephen Lee, an associate professor at the Hong Kong University of Science and Technology and president of local chip-manufacturer Analogic Tech. On a recent trip to Singapore, Lee was able to hire 10 people in less than two days - all of them Hong Kong-born and educated. "People in their forties and fifties increasingly feel that they want to come back," says Lee. "I would not underestimate the emotional aspect, the home factor."

Singapore will be reluctant to let such highly qualified workers go. "It is talent, talent, talent, not money, money, money that will lead to success," said Prime Minister Goh Chok Tong, laying out the country's IT policy last year. Recognizing that its small talent pool is insufficient to make the Lion City a technology world player, the government has set about reform with its usual gusto, controversially opening the doors to foreign talent. Research and development companies can now avail of the Foreign Researchers Recruitment Program to help pay for relocation costs and other expenses incurred when hiring from overseas.

The National Science and Technology Board is working closely with industry, business and schools, encouraging local talent to train for the information age. Schoolchildren can now take classes in HTML, the programming language used to create websites. In December, Nanyang Polytechnic launched Singapore's first graduate program in e-commerce. The NSTB supports such programs as Motorola Electronics' off-campus MSc in electrical engineering at the National University of Singapore.

Finally, to loosen up an economy built on detailed regulation and fear of failure, the government also launched its Technopreneurship 21 strategy. A $1-billion investment fund was set up to get venture capital flowing and laws were revised to make life easier for start-ups. Entrepreneurs can now operate out of their public housing flats, pay employees with stock options and sail closer to the wind before they are declared bankrupt. Even the education system has been overhauled to encourage risk-taking.

But after years under the watchful eye of a nanny state, the question is: How receptive will Singaporeans be now that they have permission to jump off the top of the climbing frame? "Getting skilled workers is definitely a problem. Getting workers who are willing to sacrifice on pay to work for you is another," says Paul Lim, the 36-year-old CEO of, a start-up online shopping mall. "Stock options don't make sense to some of these guys. They feel they are taking a big risk by agreeing to work for lower pay, since the stock option could have zero value as 90% of start-ups fail. I guess guys here are too pampered."

Employees can afford to pick and choose. In Singapore as much as in Silicon Valley, it's a sellers market. Jerel Kwek, a 21-year-old entrepreneur, spends one third of his time on recruiting. "You really need great people at the top," he says. It's no good going the traditional route, putting ads in newspapers and targeting unemployed, says Kwek. "The great people have jobs. You need to be creative. Go to online communities to spread the word. Go to sporting events, tech company parties - unusual places where you might meet people."

While Kwek lauds the Singapore government's efforts, he believes there is a way to go. For example, processing papers takes only a month, but in Internet time even that is too long. Kwek knows what he's talking about. His second start-up,, offers job listings and career advice. The site was born out of the frustration Kwek experienced when recruiting for his first e-business five years ago.

Out of an obstacle an opportunity - and a business - was born. That's the kind of talented, creative thinking both Singapore and Hong Kong want and so desperately need.

With reporting by Allen T. Cheng and Yulanda Chung/Hong Kong and Alejandro Reyes/Singapore

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