The case examines two major transitions currently taking place in Hong Kong-the transformation into a knowledge-based economy (KBE) and the replacement of the Gen Xers by the Gen Ys in the workplace. It sheds light on the skills that workers require and the strategies that government and industries should adopt to suitably develop a KBE. In doing so, the case elaborates on the policy initiatives Hong Kong has undertaken to create the desired human capital and to leverage innovation and technology across knowledge-based industries. It tabulates the key statistics and trends that enable manpower planning and projections. While the case presents issues arising in the workplace due to intergenerational differences between Gen X and Gen Y, it questions how Gen Ys can effectively replace the retiring baby boomers and aging Gen X workers. It aims to arouse the attention of human resource (HR) managers in coming up with the appropriate strategies to incorporate and motivate the Gen Ys to fill the gap. In the end, can both transitions be successful and sustained? Can the new generation help transform Hong Kong into a KBE?

Established in 1908, General Motors ("GM") is a leading global automobile manufacturer. Though the company has maintained its global presence since 1931 and offers a vast range of brands, it is now considered a fading automotive manufacturing leader. GM witnessed a financial crisis in 1992 and successfully attempted to resuscitate its sales and earnings by implementing a revival plan. The success lasted for a decade, but the company observed fierce competition and declining global market share during this period. The company has since reported another loss in 2006. Dwindling sales figures, increasing competition and hefty staff costs are considered to be the key hurdles to GM's success. Furthermore, the introduction of a new pension accounting standard, the Statement of Financial Accounting Standards ("SFAS") No. 158, is expected to further deteriorate the financial performance of GM by recommending full recognition of pension surplus or deficit on the company's balance sheets. The management of GM is focusing on strategies to effectively manage the risks and returns of the pension schemes so that the new pension accounting standard does not adversely affect GM's financial performance.