Economy is important in every city to support its development, maintain people’s living standard and increase its competence among other cities. Cities with good economic status can provide their people better living conditions and have better reputation in the world. I am going to discuss the issue from the perspective of economic stability and economic growth. In terms of economic stability, the government can develop in more diverse industries instead of focusing in one single industry. It is unsustainable for a city’s economy if it over rely on a few industry. Once the major industry decline, the overall economic performance of a city would be seriously destructed and people’s living standard would be adversely affected. Take Hong Kong as an example, Hong Kong is a good example of over relying on financial industry. When there was an economic downturn a few years ago, many companies closed down and people became unemployed. Local Gross Domestic Product (GDP) also dropped. To develop a city with stable economy, the government can set up some policies to support high-end industry, especially those required creation and innovation. For example, Silicon Valley produces high-tech products to support its economy with well-developed infrastructures. As they are less able to be replaced by other cities, city can work on the industry for a longer time. In terms of economic growth, it is important to provide favourable business environment for firms to do business. Small and medium enterprises take up over 98 percent of total Hong Kong business enterprises. They usually face more difficulties as their financial strength are weaker and lack expertise. Government can support them by providing business start-up fund and facilities and reducing business barriers. With favourable policies, people can do business with less constraint. Moreover, there will be more companies in the industry and increase competitions. People in the industry will work harder to improve and think in creative way in order to stand out from competitors. Take local supermarket business as an example. There are a few supermarkets dominate local market and drive away other competitors with their strong financial strength. It is difficult for small firms to enter the market. If there are more competitors, it can make companies to do better and enhance local economy. Also, government can reduce profit tax rate to increase companies’ incentives in doing business; organizing international events to promote the city and attract foreigners to do business with local firms. These methods can improve a city’s business environment and thus supporting local economy. Labours are important in a city’s economy. To increase labour supply, government can encourage and support companies to carry out family friendly policies to release labour force. Nowadays, there are many women need to work and take care of family at the same time. If company can provide more elastic working hours, for example, part-time job and home office policy, this will convince more women and increase labour supply. On the other hand, although there is ageing society, many early retired people still have good physical fitness due to technology advancement and better health policy. The government may consider lengthen the legal retirement age so as to keep more labour force in the market. With more labour, the competence of a city can be kept. To boost economy of a city in long run, nurturing talents is essential. Human resources are important properties of a city and many cities have put a lot of resources in education sector. To nurture talented people, government can spend more on education sector. In the past three years, education expenditure took less than four percent of Hong Kong GDP. In Finland, which is said to be the place has with great education policies, spend over six percent of GDP in education in 2009. To improve the education in Hong Kong, government can contribute more resources to provide better education. For example, provide more subsidies for students with financial needs, so that more students can enjoy better education; provide better education by reforming the education and examination structure to improve human resources’ quality; provide more training to workers to make them become skilful. Moreover, more vocational schools and mentoring programme can be provided to train teenagers to have professional craftsmanship and meet the labour demand of the city. With more well-educated and skilled workers in the society, productivity can be risen and enhance local economy in long run. It can assist development in other aspects and bring favourable effects to local economy. This will form a virtuous circle. Apart from increasing education spending, the government can attract talents to enhance competence of a city. Talents from other places can bring in new insights for the city. For example, their education and life experience are different from that of local people, which may bring new insights and innovative ideas to the city. Government can construct better living condition and provide attractive fringe benefits to attract talents. To conclude, the government should carry out more long term policy, instead of short term policy, to maintain a city’s good economic status. It can maintain the economic status through develop diverse industry, construct a favourable business environment, increase labour supply and improve human resources. Through these methods, the economic can keep growing in a more sustainable way. References: Governement expenditure on education edb.gov.hk/en/about-edb/publications-stat/figures/gov-expenditure.html 吝嗇教育投資 香港跑輸鄰區 (2013), 經濟日報 hket/eti/article/cd11dc44-141f-4c64-8d06-197f2bfdbea5-681040?source=print&printable=true
Posted on: Wed, 12 Mar 2014 15:58:15 +0000
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