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Following is the full text of the presentation given by the Director of Information Technology Services, Mr Lau Kam-hung, at the Asian Information Technology Venture Capital Forum today (October 22):

Distinguished guests, ladies and gentlemen,

Good morning!

It is my pleasure to be invited to the Asian IT Venture Capital Forum and to speak to so many young and brilliant entrepreneurs today.

I would like to take this opportunity to share with you the information technology (IT) strategy of the Hong Kong Special Administrative Region (HKSAR) and the progress we have made in building Hong Kong into a leading digital city.

In the knowledge-based world of the Information Age, the competitiveness of an economy is determined by its ability to develop and exploit technology. The HKSAR Government is fully aware of the importance of IT and is committed to encouraging the development of IT to maintain our competitive edge and to drive our overall economic growth.

As a practical expression of our commitment, we published the "Digital 21" IT Strategy in November 1998 which sets out the vision and targets to enhance and promote Hong Kong's information infrastructure and services to make Hong Kong a leading digital city.

Four enabling factors have been identified under the "Digital 21" IT Strategy. Based on these enabling factors, we have set out our initiatives and work schedule. The four enabling factors are:

(1) developing high capacity telecommunications networks;

(2) establishing an information infrastructure with an open and common interface for secure electronic transactions;

(3) promoting IT education to ensure that our people know how to use IT; and

(4) cultivating a culture that welcomes the use of new technologies in the community.

Since 1998, we have been making remarkable progress in preparing ourselves for the Information Age. Instead of going through all the initiatives under the strategy, I am going to focus on several key areas which are more relevant to today's forum.

First of all, an efficient and high capacity telecommunications infrastructure is a pre-requisite for the development of IT.

Hong Kong already has a world-class telecommunications infrastructure. Our broadband network covers practically all business buildings and nearly 90 per cent of our households. Our external capacity, 44.1 Gbps at present, is amongst the top in Asia.

It is also our intention to grant four 3-G mobile licences by end 2001.

This first class infrastructure is complimented by our policy to further liberalising our telecommunications market, emphasising free competition and providing a level playing field to encourage investment which lead to lower costs, better services, innovation and more choices to our businesses and consumers.

Advances in IT have brought about huge changes, including the ways we do business. Electronic commerce has been widely recognised as the future way of doing business and also an important tool to drive our economic growth.

To foster the development of e-commerce, it is important to instill public confidence in the security of electronic transactions. The HKSAR Government is committed to providing a safe and secure environment for the conduct of electronic transactions through building up a public key infrastructure (PKI).

PKI covers the use of public key cryptography and digital certificates to enable us to authenticate the identity of the parties involved, to ensure the integrity and confidentiality of the messages exchanged, and to make sure that the transactions cannot be repudiated.

The Hongkong Post set up the first public certification authority (CA) in Hong Kong in January this year to address the basic security concerns in doing business in the cyberspace.

In addition to the Hongkong Post, the private sector is free to set up its CAs to meet the demand of electronic commerce in the community.

To encourage private sector initiatives, we do not impose a ceiling or mandatory licensing requirement for CAs. However, to protect consumer interests and to enhance users' confidence, there is a voluntary system of recognition whereby CAs are free to apply for recognition from the Government.

To enhance certainty and security in the conduct of electronic transactions, it is necessary to establish a clear and supportive legal framework. The Electronic Transactions Ordinance was enacted in January this year.

Under the Ordinance, electronic records and digital signatures are given the same legal status as that of their paper-based counterparts; and a legal backing is established to promote and facilitate the operation of CAs.

To take the lead, the HKSAR Government is now accepting submissions from the public in the electronic forms under the bulk of statutory provisions in the laws of the HKSAR.

To encourage the use of IT, the HKSAR Government has taken the lead to implement the Electronic Service Delivery (ESD) scheme.

Through the open and common information infrastructure of ESD, the public can acquire a wide range of services through the Internet and public information kiosks, 24 hours a day and seven days a week.

Services from various government departments and public agencies have been made available in the first phase of ESD, including bill payment, renewal of driving and vehicle licences, etc. Through ESD, we aim to improve the efficiency and quality of public services, and at the same time, familiarise our citizens with e-commerce operations and environment and give them confidence in e-commerce.

The ESD system also serves as a stimulus for the development of e-commerce in the private sector by allowing commercial services to be provided electronically via the same ESD information infrastructure.

The HKSAR Government is also committed to providing the necessary infrastructure to encourage the application of innovation and technology.

The Cyberport, our IT flagship project, will provide an important information infrastructure to create in Hong Kong a strategic cluster of IT companies and professional talents. In the Cyberport, we will provide a world class working and living environment aimed at attracting a critical mass of IT professionals.

The Cyberport has already attracted a lot of interests from international companies and acted as a catalyst for the growth of local IT companies. Up to August 2000, over 150 companies, local and overseas, have registered interest in becoming tenants, including 15 multinational corporations such as Cisco, IBM, Microsoft, Oracle and Yahoo!.

The Cyberport will develop itself into an international IT centre famous for creative and innovative IT application. It will be completed in three phases between end 2001 and end 2003.

Besides building the necessary infrastructure, the HKSAR Government also plays an important role as a promoter and facilitator to encourage the application of innovation and technology.

The Hong Kong Industrial Technology Centre Corporation is a statutory body set up by the Government in 1993. It aims to promote technological innovation and development, as well as the application of new technologies in Hong Kong industry. It has developed the Technology-based Business Incubation Programme to nurture technology start-ups and the Technology Transfer Programme to foster technology culture and business matchmaking.

To provide entrepreneurial training to university graduates in the IT field and to cultivate an environment conducive to technology transfer and company spin-offs in Hong Kong, the Government has sponsored a sum of $12.5 million for local universities to implement the IT Entrepreneurial Programme. This offers an excellent opportunity for our talented budding engineers in the IT sector to develop into the next generation of IT entrepreneurs in Hong Kong.

University-industry collaboration is vital to the betterment of Hong Kong's IT industry. Connecting the right technology to the right people will generate the momentum of success. To this end, my department has organised the Tripartite Forum to bring the industrialists, the investment community, and the academic researchers together with a view to promoting the commercialization of IT research results.

As a supporter to the development of innovation and technology, we have also established the Innovation and Technology Fund with an injection of HK$5 billion. The Fund aims to increase the added value, productivity and competitiveness of our industries through financing projects that contribute to innovation and technology upgrading in both the manufacturing and service industries.

In addition, venture financing is also provided through the Applied Research Fund (ARF) to the private sector to assist companies undertaking technologically innovative projects with real commercial potential. The HK$750 million ARF has been entrusted to and managed by the private sector venture capital firms since November 1998.

Hong Kong already possesses the critical success factors for an innovation and technology centre.

Hong Kong is well known as the freest economy in the world (ranked by the Heritage Foundation and the Cato Institute). Businessmen here are free in making their business decisions and we will make every effort to uphold that principle. Hong Kong is equipped with an excellent telecommunications infrastructure. We are one of the most important financial centres in the world and has a hard-working community with exposure to both the eastern and western culture.

But simply possessing these critical success factors are not enough. In a market-oriented economy like Hong Kong, innovations need to be commercialised in order to make an impact on the economy.

The HKSAR Government has an important role to play and we are indeed constantly striving to facilitate the development of advanced technology and strengthen the private sector's capability to develop innovative ideas for commercial use.

However, the ultimate success of our endeavours to facilitate, encourage and nurture our IT sectors will depend largely on private sector's involvement and the determination and courage of our young entrepreneurs to turn good ideas into popular, commercially viable products.

I thank the Island Junior Chamber and the Hong Kong Jaycettes Junior Chamber for organising this forum to provide opportunities for our brilliant and creative young entrepreneurs to turn their innovative ideas into reality.

I wish you a fruitful and rewarding discussion in the forum.

Thank you.

End/Sunday, October 22, 2000

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