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The Government will lead to usher in the knowledge economy supported by innovation and technology and will give everyone in the society a hand to sign on as we embark on the great journey, the Chief Executive, Mr Tung Chee Hwa, said tonight (Tuesday).

Speaking at a gala dinner after receiving the 1999 Leader of the Year Award, Mr Tung said Hong Kong was quite well prepared for a knowledge economy. Hong Kong had open and highly efficient markets and its IT infrastructure was already among the best. We just need to strengthen our culture of innovation and technology and we would then be well on our way, he said.

The Government would, in particular, play its part by creating the best environment to support innovation and technology; revamping the school systems and multiplying the educational opportunities for everyone; and further opening up our markets to the benign forces of competition.

In the race into the knowledge economy, Mr Tung expected that the middle class would benefit most relative to the rest as knowledge, brain power, or innovative human capital, was worth more than physical or financial capital in a knowledge economy. The middle class, who traditionally valued hard work and education, was the group most at home with innovation and technology.

Mr Tung said members of the middle class were extremely rich in human capital. "They are, and will be, the engineers, the research scientists, the professors, the innovative art designers, the managers, the professionals, in short, the knowledge workers," he said.

Acknowledging that the knowledge economy would be a challenge for people without adequate education or whose skills were outdated, Mr Tung promised that no one who was willing to work hard to move up would be denied a fair chance.

The Government would play its part to help by providing ample opportunities for those who were determined to improve themselves through learning, training and re-training. The "lifelong learning" concept espoused by the Education Commission would be a most important step.

Taking the US as an example, the Chief Executive observed some interesting trends. Throughout the seventies and into the mid-eighties, US income distribution had been worsening for the lowest quartile. Starting from the mid to late eighties and throughout the nineties, real income growth of the lowest quartile had been mostly positive. In fact, the growth was often just about as fast or sometimes faster than those in the top quartile. The exceptions were those in the bottom fifth percentile or lower. But starting from 1990, even those in that bottom rung had seen positive income growth at higher rate than those at the top quartile.

Mr Tung noted that last fall, new statistics showed a declining overall income inequality in the US economy. This happened at about the same time as the recent productivity pickup became apparent. This new evidence was encouraging, he said, adding that in Taiwan, where the economy had long embarked on the high-tech path, the income distribution pattern had been benign all along as well.

He said, "Therefore, for those who are left behind can also take heart that the knowledge economy is to your benefit in the long run. Furthermore, your sons and daughters certainly can participate fully in that knowledge economy."

Turning to the business sector, Mr Tung noted that there might be some froth in high-tech stocks everywhere, and perhaps in Hong Kong too. He reminded investors to be prudent and invest within their means. Certainly, they must understand the activities and the strengths and weaknesses of the companies they were investing in. He added that underneath the froth, however, there were many real activities going on. These companies were providing new investment and employment for the Hong Kong economy.

Referring to those companies that had not integrated IT fully into their management practices or had not even begun to embark on the road to the knowledge economy, Mr Tung urged them to come out from the sideline. "We will become truly and totally successful as a community if all our businesses, big or small, embrace the information technology as the way forward. Only then will our competitiveness be second to none in Asia," he said.

To sum up, the Chief Executive said the Government was working to usher in the knowledge economy to benefit everyone. He said, "The middle class, take heart, your future is bright! Businesses big and small, take part! I know some companies still need some gentle prodding to move ahead, and I am giving it! For those who lack the proper skills or whose skills are going out of date, we'll help you --- so gear up and train up. You can make it, and your sons and daughters will make it! The way ahead is clear for everyone. And I know as a community we have the will to make it happen."

Photo:Picture shows Mr Tung delivering a speech at the Award Presentation Ceremony.

End/Tuesday, February 29, 2000

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