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The Chief Executive, Mr Tung Chee Hwa, said today (March 23) that he was confident that Hong Kong industries would be able to continue to respond effectively through the market and that their shrewd business sense would help Hong Kong meet new challenges and scale new heights.

Speaking at the 40th anniversary dinner of the Federation of Hong Kong Industries, Mr Tung noted that businesses were facing the challenges of globalisation and the impact of technological application.

Quoting British historian Arnold Toynbee's saying that "civilisations rise or fall depending on whether they are able to give the right responses to challenges under demanding conditions", Mr Tung said,"This situation of challenge and response is clearly where we, and in fact our competitors, are today."

The Chief Executive said that Hong Kong was coming precisely across the "third strategic inflection point" in our economic history. He referred to the knowledge-based economy and urged businesses to reflect deeply on their established business model.

The Information Age was clearly relevant to all businesses in Hong Kong, he said.

Mr Tung said that Hong Kong passed the first historical strategic inflection point when its role as an entrepot to the Mainland diminished in the 1950s. The second strategic inflection point was passed in the late 1970s when land and labour costs became major constraints for our industries. Expansion of our industrial base into Southern China solved these problems.

He said that Hong Kong was indeed facing a new major challenge now and that to manage this change, his view was simply that "we should harness the potential of technology to add value to our economic activities, and particularly information technology, which holds the key to our future".

"Technology manifests itself as products, services, essential infrastructure and tools to improve business productivity and efficiency.

"We need to be able to make productive application of technology to add value to our businesses and to make ourselves more competitive in the global business environment, and this is not just for industries and big companies that can obviously benefit from technology, but also in many of the more traditional lines of business and medium and even small companies as well," he said.

Mr Tung stressed that the Government was committed to providing the necessary support to industry to help them meet the challenges, such as the $5 billion Innovation and Technology Fund and the Science Park, which had signed up three international technology companies already.

"In the next few weeks, I am going to announce the appointments to the Council of Advisers on Innovation and Technology and to the Board of Directors of the Applied Science and Technology Institute. This will strengthen our advisory framework with a successor to Professor Tien Chang-lin's Commission (on Innovation and Technology) and also our Research and Development infrastructure in mid-stream research," he said.

In addition, there were the measures announced recently to strengthen the institutional support for innovation and technology. These included the establishment of an inter-bureau committee chaired by the Financial Secretary to coordinate the government programmes for innovation and technology, the establishment of an Innovation and Technology Commission within the Trade and Industry Bureau, and the recruitment of technologists to strengthen professional expertise within the Administration, Mr Tung said.

Photo: The Chief Executive, Mr Tung Chee Hwa, attended the 40th Anniversary Dinner of the Federation of Hong Kong Industries. Picture shows Mr Tung delivering a speech at the dinner.

End/Thursday, March 23, 2000

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