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POD Research Institute held a press conference today to release its latest research report, From Public Good to Strategic Industry: A Roadmap for Hong Kong's Transnational Education Sector. The report points out that Hong Kong possesses world-class educational resources, yet due to outdated statistical methods and the lack of an overarching strategy, it has failed to fully capitalise on the global education market opportunity, projected to reach US$10 trillion by 2030. It calls on the Government to immediately transform the education sector from a traditional public good into a strategic, high-value export industry.

Mr. Ronny Tong, Head of POD Research Institute, stated: "Hong Kong's education sector has long been regarded as a public service, with its immense economic potential severely underestimated. Our research reveals this 'statistical illusion,' which has led policymakers to overlook the true contribution of education to Hong Kong's economy. Against the backdrop of intensifying global competition, Hong Kong must break away from old paradigms and view education as a key engine for driving economic diversification, creating high-value employment, and enhancing international influence. This is a critical moment to take decisive action and transform Hong Kong into the 'Global Academy of Asia'. In the formulation of a new HKSAR Five-Year Plan, 'building an international education hub' must be established as one of the core development pillars."

Using the four "modes of supply" under the World Trade Organization's General Agreement on Trade in Services (GATS) as an analytical framework – Mode 1 (Cross-border supply), Mode 2 (Consumption abroad), Mode 3 (Commercial presence), and Mode 4 (Presence of natural persons) – the report points out that Hong Kong's official statistics only cover Mode 1 (direct cross-border payments). They almost entirely overlook the economic value, amounting to tens of billions of Hong Kong dollars, generated by Mode 2 (inbound international students), Mode 3 (overseas branch campuses, such as HKUST (Guangzhou)), and Mode 4 (expert mobility).

Mr. Ray Poon, Research Director of POD Research Institute, elaborated: "Current official statistics classify education under 'Personal, cultural and recreational services,' recording education exports at only approximately HK$1.4 billion. This is severely disconnected from the actual economic activity generated by over 92,000 non-local students in the 2024/25 academic year. This 'statistical disconnect' is alarming and has seriously hindered the development of Hong Kong's education industry. We strongly recommend establishing an 'Education Satellite Account' to accurately measure the full economic contribution of education services, providing a solid data foundation for formulating effective policies."

Key Findings and Recommendations of the Report:

1.        Root Causes of the "Statistical Illusion": Official statistics significantly underestimate the true value of education exports, failing to reflect the economic contributions of Modes 2, 3, and 4.
2.       Hong Kong's Unique Advantages and Bottlenecks: Advantages include five world's top 100 universities, an English-language teaching environment, proximity to the Guangdong-Hong Kong-Macao Greater Bay Area, and the IANG visa policy. However, challenges include the lack of a unified export strategy, student accommodation shortages, the underutilised potential of HKDSE, and perceptions regarding political stability.
3.      Leveraging the Greater Bay Area and the Belt and Road Initiative: Hong Kong can act as an education "super-connector" for the GBA and countries along the Belt and Road, expanding its influence through "light-asset" models (e.g., franchising, online courses, teacher training).

Comprehensive Policy Roadmap:

1.       Establish a "Study Hong Kong" statutory office (modelled on Education New Zealand / British Council)
2.      Form a Cross-Bureau Steering Committee on Education Exports
3.       Resolve the student housing crisis (fast-track hostel conversions, master leases)
4.       Scholarship diplomacy targeting BRI nations (Saudi Arabia, Kazakhstan)
5.      Adopt "light asset" TNE models through VTC and other tertiary institutions.
6.       Invest in Muslim-friendly infrastructure for ASEAN/Middle East markets
7.        Reform the Post Secondary Colleges Ordinance (Cap 320) to enable offshore profit-generating branches

Mr. Poon added: "Our benchmarking analysis shows that successful education hubs all feature stable policies and diversified supply models. Hong Kong must learn from these experiences, avoid over-reliance on a single market, and adopt a 'whole-of-government' coordinated strategy to truly unlock the immense potential of the education industry."

POD Research Institute believes that by implementing these strategic recommendations, Hong Kong can not only achieve economic diversification and create numerous high-value jobs, but also consolidate its position as the "Asia Knowledge Hub," deepen its geopolitical influence in the Greater Bay Area and the Belt and Road region, and significantly enhance its soft power and diplomatic relations.

For more details on the proposal, please visit: https://podresearch.hk/en/duscussion-reports