Raising Hong Kong’s birth rate is an economic imperative

Hong Kong’s first five-year plan and latest policy address have put demographic sustainability on the public agenda. Among the measures announced are an extension of the newborn bonus scheme and increased financial support for the second and subsequent children. These are welcome steps.

But the fertility debate should not be reduced to whether a bonus is large enough to change family decisions. The bigger challenge is whether Hong Kong can remain dynamic and competitive while its younger generation continues to shrink. Demographic trends are often discussed in terms of ageing, labour shortages and pressure on public finances. Yet low fertility has a less discussed consequence: its impact on innovation.

Innovation ultimately depends on people: scientists making discoveries, entrepreneurs building companies and skilled professionals turning ideas into products and services. The stronger the talent pipeline, the greater the likelihood of breakthroughs. This matters even more in the age of artificial intelligence.

AI may offset some labour shortages, but it still depends on capable people to develop, deploy and improve it. Economies competing in an AI-driven future will need more highly skilled workers, not fewer. That is why low fertility should be viewed not only as a social challenge but also as a competitiveness challenge.