With the advent of globalisation, rapid advancement in technology and Hong Kong’s further transformation into a knowledge-based economy, the local workforce needs to enhance its capabilities and competitiveness. To ensure sustainable manpower development in the rapidly changing environment, the Hong Kong Qualifications Framework (QF) was introduced by the Education and Manpower Bureau (EMB) in 2004 to facilitate life-long learning. More information on the QF can be found in Chapter 2 of this document.

The establishment of the QF will facilitate personal development in various aspects and provide inherent learning and training incentives for individuals to explore and utilise their potential, thus preparing them for success. To this end, the EMB has assisted various industries in setting up their Industry Training Advisory Committees (ITAC). One of the responsibilities of ITAC is to develop a set of Specification of Competency Standards (SCS) for the respective industry

The SCS mainly comprises task-based competency standards, which are benchmarked for skills required to perform different job functions of the industry, including industry-specific knowledge, professional skills and soft skills. The tasks, functions and functional areas in the SCS shall reflect industry perception on the need areas for best practices, as well as the consensual core requirements for employability. . The SCS does not only set out the work competencies required for today, but also reflect on the development trends of both the industry and the society.

In the long run, this industry-based SCS will provide a vocational competency benchmark for training. It will help training providers to grasp the needs of the industry and to develop responsive programmes to meet those needs. Together with the QF, SCS will provide employees insight on competency upgrading and learning articulation, in their planning of personal development and career advancement roadmaps. Further discussion on SCS can be found in Chapter 3 of this document.

In July 2005, the Information and Communications Technology (ICT) ITAC was formed. It comprises major stakeholders of the industry, including representatives of employers, employees and professional bodies,

Based on the classification of the International Telecommunications Union (ITU), which is also adopted in the Mainland China, the ICT ITAC identified the ICT industry in Hong Kong to have four distinct branches of business, namely:

a. The Software Products and Software Services (SW) branch

b. The Information and Communications Services*

c. The Electronic Product, Information Processing Hardware and Communications Equipment, and

d. The Electronic and Optical Components.

* The branch has been renamed as "Communications and Information Services"

In view of the broad spectrum of the industry, the ICT ITAC ventured to develop initially SCS for the Software Products and Software Services (SW) branch. Production of the Information and Communications Services SCS will follow in the next phase.

This document contains the complete set of SCS for the SW branch of the ICT industry endorsed by the ICT ITAC and is ready for industry-wide consultation. Chapter 1 is a general profile on the ICT industry, which highlights the business, technology and manpower trends of the SW branch in Hong Kong, Mainland China and other leading countries in the world. The present situation and the further potential of SW, with particular reference to the Pearl River Delta in Mainland, are considered. Chapter 2 is a discussion on the general Qualifications Framework and how it may facilitate the general public to pursue lifelong learning. Chapter 3 specifies the Competency Standards required by the SW branch of the ICT industry.

In the past few decades, ICT has advanced at an astonishing pace, shaping today’s civilization and the future of mankind. The productivity and efficiency gains resulting from the application of ICT have created tremendous wealth in many knowledge-based societies. ICT has penetrated and rooted in most sectors of today’s highly integrated economy. It has brought great conveniences to mankind and has caused some revolutionary changes to the way we lead our lives.

Highly developed and high-growth economies generally recognize ICT as a strategic asset, which can create societal wealth. In the Mainland China, to meet the challenges of the rapidly changing technological, social and business environment of the 21st century, the Central Government has strategically positioned ICT as a leading and pillar industry in developing the national economy. It is also a core industry to enhance people’s livelihood and accelerate societal progress as well as social transformation.

Societal wealth created by the ICT industry extends beyond the immediate economic benefits of individuals and enterprises. It means more quality job opportunities where individuals can realize their potentials. People are able to make more informed choices through ready access to relevant information. The integration of ICT in the full spectrum of our education system will produce a workforce more ready to accept challenges in this increasingly complex world. Bridging the digital-divide will create a more harmonious society and bring about a higher standard of living and a better quality life.

Hong Kong’s economy is undergoing a structural transformation, which is critically important to our long-term prosperity and sustainable growth. We must work hard to preserve and strengthen our core competence in the highly successful sectors of financial services, trading, logistics and tourism. At the same time, Hong Kong must explore and develop new industry sectors to open up new opportunities and equip ourselves to take up the leading role in the Asia-Pacific economy.

ICT is the most critical and essential force that has driven the economic transformation in the advanced economies. It has penetrated into numerous industry sectors and brought metamorphic transformation to many traditional businesses. New jobs and new business opportunities are constantly created by ICT. Many leaders in our communities clearly recognize the value of ICT. They have credited ICT as the indispensable tool for Hong Kong to maintain its leading and competitive position in the four pillar industries that we have worked very hard to develop.

Hong Kong possesses a world-class ICT infrastructure and personnel quality and stands as the pioneer in ICT applications. The successes of ICT applications by the SAR government and big organizations bear witness to this. Hong Kong boasts of a hundred percent in the personal use of wireless communication, taking pride in being number one worldwide. Broadband internet access covers all business districts and most residential buildings. More than 70% families have computers. ICT has brought us quality services in many aspects of our lives e.g. an excellent banking network, an efficient stock exchange, round the corner ATMs, a convenient electronic payment system, a reliable mass transport system, the best international airport, bustling cargo terminals and logistics services for containers, etc. The Government’s Electronic Service Delivery (ESD) Scheme brings us further conveniences.

In this era of globalization, ICT is the means to ensure that Hong Kong maintains its competitive edge. Considerable resources and manpower have been invested in related sectors by the government, the private sector and individuals. Government-driven initiatives included the Hong Kong Science and Technology Parks, the Hong Kong Cyberport and the Hong Kong Applied Science and Technology Research Institute. The Innovation and Technology Fund in Hong Kong was another measure to promote ICT research and projects. Besides the government, education and research institutions, professional and trade bodies, as well as the public, have increased their annual spending on ICT, especially in the areas of personnel training and human resources development. The impact and applications of ICT have penetrated all sectors and businesses and created numerous success stories.

To help the ICT industry (known to some as the Information Technology and Telecommunications (IT&T) industry) to board the international bandwagon and to promote regional reorganization and expansion, we have divided the industry into 4 branches (see previous sections) for the purpose of work competency standards development.

The combination of information and communications services, the digitalization of the electronic products, the integration of the optical and electronic technologies, the wide use of programmable-controlled machinery and software components in electronic products, the large-scale digitalized entertainment and media content have widened the scope of ICT and enriched its meaning. To give a young, vital and fast-growing industry a boundary is a task that will not get one any thanks. On the contrary, a certain level of ambiguity allows richer and more far-sighted ideas, giving the industry more flexibility and space to develop and expand.

Comparatively speaking, two of the branches, namely the Software Products and Software Services (SW) branch, and the Information and Communications Services sector, grew to be more significant economically than the others in Hong Kong. A large population of software professionals are employed in the ICT divisions of government departments, public services organizations and private enterprises.

In the past, the Electronic and Optical Components branch was grouped under the Manufacturing Industry. However, the traditional industry classification cannot satisfy the current economic development and the needs of this sector for two reasons. First, the wide use of technology and the increasing proportion of software components as well as intellectual content in these products distinguish the sector from traditional Manufacturing Industry. Second, the proportion of the manufacturing costs of these products and their values has been decreasing to a point that makes it different from those products covered by the traditional Manufacturing Industry.

According to the ICT Human Resources Survey 2006 conducted by the Vocational Training Council, about 64,000 professionals were employed in the first two ICT sectors. 45% of them (about 29,000) were engaged in software design and development. Half of the remaining number (about 14,000) was employed in software applications and the other half (15,000) in software related services.

According to the survey conducted by the Hong Kong Productivity Council in 2005, there were about 700 software product and software services companies in Hong Kong. Most of them were small companies with 20 staff or less but they worked aggressively to expand their business. More than 30% had subsidiaries in Mainland China in the form of wholly owned or joint ventures, and the percentage has been increasing. To lay down guidelines and explore new directions for our software industry, there is a need to understand the development of this industry in the Mainland.

Alongside strong economic growth of Mainland China is the continuous expansion of the scale and influence of the local software industry. The industry recorded a steadfast annual growth of more than 30%. Revenue rose from RMB440.5 billion in 1999 to RMB2,300 billion in 2004. Worldwide, the increase went up from 1.0% in 1999 to 3.55% in 2004. In terms of GDP, it was a rise from 0.54% in 1999 to 1.69% in 2004.

Up to September 2005, 28,401 software products were registered. Software sales in 2004 reached $920 billion, representing 40% of the revenue of the software product and software services sector and an annual increase of 14.3%. With the rapid growth of the software industry, people widely accept software services to include services such as software outsourcing, system integration, software standardization, customization and networking, call centre, and data processing. In 2004, revenue from software services (including system integration services) reached $1,165 billion, taking up 50.6% of the whole software industry, an annual increase of 46.5%.

The number of software personnel in China is increasing and so is their quality. Besides the universities, 35 software professional colleges and 35 software vocational training colleges have been set up to provide formal education for software personnel. At the same time, they also provide in-service training for the existing workforce. By these different modes of training, more software professionals can be produced. In 2004, more than 700,000 were employed in the software industry, and another 400,000 were working in jobs related to software application, research and education. It is estimated that within three years, China will rank second in its number of software professionals.

In terms of GDP, the scale of workforce and growth rate, the software industry in Mainland China far exceeds that in Hong Kong. However, one must not view this as a threat and lose confidence in ourselves for this will only obstruct our efforts of finding areas for co-operation. Matching our strengths to China’s needs, there is much room for co-operation. In fact, the software industry in Hong Kong and Mainland China can supplement and compliment each other. There will be wider scope and more opportunities for businesses and individuals in Hong Kong to develop and excel.

26. In 2005, the worldwide total software market size exceeded US$800 billion. As a highly internationalized industry, the software industry is often used as one of the benchmarks gauging the economic strength of a nation. It has become the industry “high-ground” that many economies are competing to capture. In the coming 5 to 10 years, the projected annual growth of the software industry will remain at a rate exceeding 13%.

Figure 1 : 2004 Software Market Share by Major Economies

At the 28th ICSE Conference held in May 2006, it was reported that China had taken up 3.55% of the total worldwide software market share in 2004, surpassing South Korea and India for the first time ever. In 2005, China’s market share expanded to 5.9%. With an annual growth rate averaging at 47.5%, the Mainland China software market had enjoyed a 7-fold growth in the past 5 years. However, when compared with America’s 47.5% market share and $3,213 billion revenue, China is dwarfed by more than one order of magnitude. There also exist sizeable gaps comparing the China figures with those of Western Europe and Japan. These gaps represent ample rooms for expansion. They are opportunities that the local software industry can tap into to fuel its growth.

The United States of America is indisputably the world leader in the software market. Being the largest user and exporter of software products, it also plays a leadership role in importing software services. It has pioneered the use of international software outsourcing services, such as IT Outsourcing (ITO), Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO). Leveraging on the innovative and strategic use of these services, the US has expanded its overall capability and capacity in the software industry.

In 2005, Global Insight (USA) Inc. conducted a study on the impact of offshore software and IT services outsourcing on the US economy [GIUSAICT2005]. Some of their major findings included:

a. While global software and IT service outsourcing displaced some IT workers, total employment in US increased as the benefits rippled through the economy. The incremental economic activity that followed offshore IT outsourcing created over 257,000 net new jobs in 2005 and was expected to create over 337,000 net new jobs by 2010.

b. Spending for global sourcing of software and IT services would grow at a compound annual rate of 20%, increasing from $15.2 billion in 2005 to $38.2 billion in 2010.

c. The benefits of global sourcing of IT services and software contributed significantly to the real GDP in the US, adding $68.7 billion in 2005. By 2010, real GDP was expected to be $147.5 billion higher than it would be in an environment in which offshore software and IT services outsourcing did not occur.

Through thorough study of the issue, pessimistic conservatism and the unfounded stigma associated with international software outsourcing have gradually been removed from the mainstream thinking of the society. International software outsourcing does not necessarily mean the displacement of positions or the elimination of jobs. Instead, new and higher-value-adding jobs are created with a net gain of positions in the overall job market. IT outsourcing, software outsourcing on a global scale, the re-distribution of jobs internationally, the re-design and rationalization of work-processes in software engineering are some of the irreversible trends in this increasingly globalised economy of today.

Through many years of hard work and supported by proactive government policies, India has developed into a world leader in the supply of IT and software outsourcing services. In the fiscal year 2004-05, India has recorded total revenue of US$17.3B in international IT related outsourcing services. The industry has employed 685,000 full-time professionals and contributed 4% to the GDP. Leveraging on the success of its IT-related outsourcing services, India has, in recent years, accelerated its economic transformation in various industry sectors. As a result, the internal demands of IT services and the overall ICT industry are also growing at a very healthy pace.

Leveraging on its language skills and geographical proximity, the North-eastern region of China has in recent years developed rapidly into a software outsourcing centre for the Japanese market. As a result, software companies with more than 10,000 employees are beginning to emerge in this region. ASEAN countries, including the Philippines, Vietnam and Malaysia are also devoting large amount of their resources and aggressively strengthening their infrastructures and capabilities in order to capture the international opportunities provided by this growing market sector.

Under the impact of a single world economy and the supra-speed economic development of Mainland China, the ICT industry in Hong Kong and the Pearl River Delta will see fundamental changes in the coming few years. The changes can be categorized as follows:

a. Reorganization of resources and markets – Within the region, the trend of complementing one another in terms of human resources and skill sets is becoming obvious. The deployment of human resources becomes more flexible and the division of labour more mature. Hong Kong’s ICT industry will wriggle out of its small and enclosed market and become a proactive player in the regional and international markets. The macro changes in the international arena will speed up merges and acquisitions within the ICT industry in this region and subsequently helps the industry to expand.

b. Rise in the use of proprietary and intellectual products – Taking advantage of the expanding market opportunities, more software companies will invest additional resources on software product development. Instead of simply providing services, they become software producers. This change marks the promotion of the industry from selling non-reusable intelligent services to selling highly reusable intellectual products.

c. Development of open standard technologies and fair trade – The rapid developments of open technology standards, common standards coming out of forum discussions and open source software have changed the direction of the software industry. When the related market mechanism and modes of collaboration become more mature, a fair trade environment will be created. This will contribute to the growth of intellectual products e.g. software, in the new markets.

d. Re-structuring of jobs – The combination of information and communication services, the use of artificial intelligence in electronic products, the digitalization of multimedia production and delivery, and the successful use of ICT in all business and sectors have changed the traditional modes of operation and division of labour. As a result, some businesses have become obsolete and some have reorganized. Without exception, they are looking for new directions and new business opportunities.

e. Creation and development of multimedia content – The rapid development in digitalized content for Interactive games, entertainment and education has opened up a brand new direction for the software industry. To meet new demands, software development will go beyond traditional programming to include a huge volume of highly interactive multimedia content.

f. Widening the scope and content of outsourcing services –With the advanced mode of communication and the wide use of ICT, more and more services can be procured and provided across regions. Outsourcing is the natural outcome of this single world economy. In the coming years, the expansion of software outsourcing is an irreversible trend. This includes ITO, BPO and KPO.

Confronted with the internal factors mentioned above and the changes in the surrounding environment, we should, on one hand, explore and take advantage of the opportunities created by these changes. On the other, we should learn to cope with the anxiety and resistance brought about by our fear of changes. To advance Hong Kong’s software industry to a new high, we must consider these issues: What kind of people do we need? What characteristics and skills should they possess? The answers are critical to the success of our software industry. The right decisions will help the industry to grasp the opportunities and move with the trend, but the wrong decisions will marginalize the industry and bring about its decline.

In our discussion for the future need of software personnel, let us leave “quantity” for the time being and focus on the more important issue of “quality”.

This set of SCS for the SW branch of the ICT industry has described the skills required by a professional software worker. We have classified the technological skills into 7 dimensions and explained them in detail. Clear and observable standards for each unit are also given. However, some areas need further explanations, e.g. how to cluster the skills, how to assemble the pieces into a complete whole, how to find out from the skills units concrete and tangible examples, what kind of character, behaviours and cognitive ability a software worker should possess, etc. The following paragraphs may provide some insights:

a. The Hong Kong software industry needs a great number of “synthetic” people – people with broad knowledge and professional skills, people who can extend beyond the technical level to other core areas of their industry and other industries, people who can understand and analyse the needs of a business, people who are persuasive and good at communication, and people who can drive the industry forward.

b. Young software personnel should have a good foundation of the specific skills required in each professional dimension. They should broaden their visions and skills first, and then specialize in the dimensions they are interested in. In due course, they can become experts in their specialized areas.

c. Hong Kong also needs world-class software experts with renowned research and academic achievements to drive research and development of pinnacle technology and guide the industry to new directions.

d. Distinguished software personnel should have a sound academic background, with the capability for self-learning, high adaptability and good EQ management skills. They can get to the core of the problem and find solutions and then solve the problem appropriately.

e. Software people should have a strong sense of professionalism. They should feel a sense of responsibility for their customers, society and country. They should set strict moral standards for themselves and their colleagues. They should love their jobs and have a good understanding of the nature of their jobs. They should appreciate the possible impacts their jobs may have on society and respond with professional actions.