*************
Following is the full text of a speech by the Secretary for Commerce and Industry, Mr CHAU Tak Hay, at the XIIth World Productivity Congress today (November 6): (English only)
Cultivating Innovation
Distinguished guests, ladies and gentlemen,
It is a great pleasure for me to take part in the World Productivity Congress. The staging of this prestigious and important event in Hong Kong, which brings together a distinguished group of world leaders, scholars, and productivity experts, is a great honour for Hong Kong, and provides us with an opportunity to share our experience in promoting "innovation", its effects on the modern economy, and what public policy we should embrace in order to cultivate innovation.
Innovation is widely recognised as an important means to maintain growth and stay competitive. There are numerous academic definitions and interpretations of "innovation". In Hong Kong, the former Chief Executive's Commission on Innovation and Technology headed by Professor Tien Chang-lin relates "innovation" to "include both improved technology and better methods of doing things". A more detailed description can be found in the United Kingdom's White Paper entitled "Excellence and Opportunity - A Science and Innovation Policy for the 21th Century". It refers to innovation as "the motor of the modern economy, turning ideas and knowledge into products and services"; and "an economic and social process fundamentally related to technical change". It considers the innovation process as "a cycle in which ideas, talent and design skills, money and management come together to create products and services which consumers want"; and that "the cycle of innovation must be fed by ideas and basic knowledge".
Innovation manifests itself in the form of new business opportunities; new products or services; job creation; and improved productivity and business efficiency. Therefore, innovation is to a large extent market driven and private sector led. Nevertheless, the government has a critical role to play in providing support and in creating the right environment in which innovation and technology may flourish. Let me share with you the key elements of our programme in Hong Kong to promote and facilitate innovation and technology.
In the pursuit of innovation and technology, human capital is the single most crucial factor that will affect our chance of success. In the knowledge-based economy, intellectual capital is an important factor of production. We need a good system of education and training to create dynamic and creative human resources and build up a solid knowledge base. We have continuously increased our investment in education. Funding has increased from US$4.9 billion in 1996-97 to US$7.1 billion in 2001-02, representing a 46 per cent increase over five years. Education is now the Hong Kong Government's largest expenditure item.
While we continue to invest heavily in education in order to upgrade the knowledge and skills, and broaden the intellectual horizons, of our people, we also see the benefit of bringing in additional talents to Hong Kong. In addition to attracting talents from abroad, the Government has introduced an Admission of Mainland Professionals Scheme and an Admission of Talents Scheme to attract people from the Mainland with expertise and skills not readily available in Hong Kong. I believe that our efforts in this respect will augment Hong Kong's intellectual capital.
To strengthen our capability in developing and applying technology for innovative commercial use, an Innovation and Technology Fund amounting to US$640 million was set up in 1999. The Fund finances applied research and other support projects that contribute to innovation and technology upgrading in our economy. We have also built up an effective network to link the universities with industries to facilitate the transfer and commercialisation of R&D results. This is done through industrial sponsorship and university-industry collaboration schemes under the Fund. We aim to foster an environment and culture to encourage creativity and entrepreneurship in deployment of R&D results through the Small Entrepreneur Research Assistance Programme under the Innovation and Technology Fund, and a US$96 million Applied Research Fund for supporting new technological ventures. Complementing these funding schemes are the grants made through the Research Grants Council for our universities to conduct R&D.
For R&D activities to bear fruit, funding alone is not enough. The availability of an effective infrastructure and mechanism to facilitate technology transfer and development is essential. To this end, the Government has established the Hong Kong Science and Technology Parks Corporation. The Corporation offers a one-stop and comprehensive range of services, from providing premises and services for intensive R&D activities, nurturing technology start-ups through an incubation programme, to offering land and premises in the industrial estates for production. The first phase of a Science Park being developed by the Corporation will open in March next year. The Cyberport is another piece of quality infrastructure which will create a cluster of high-tech talents where creativity will be enhanced through the amalgamation of various information and technology disciplines working in close proximity. The first phase of the Cyberport will be completed in the first half of 2002.
The Hong Kong Applied Science and Technology Research Institute set up last year is an important addition to our technological infrastructure to help stimulate the growth of technology-based industry through performing R&D for transfer to industry. The Institute's subsidiary, the Institute of Chinese Medicine, will take forward our vision to position Hong Kong as a world centre for the development of health food and pharmaceuticals based on Chinese medicine.
Recognising the importance of intellectual property rights to innovation and technology, the Government has put in place a set of intellectual property laws which fully complies with the world-class standards set out in the Agreement on Trade Related Aspects of Intellectual Property Rights under the auspices of the World Trade Organisation. These laws are enforced vigorously in Hong Kong and, through education and publicity, the community at large is increasingly aware of the vital importance of respecting intellectual property rights.
In order to promote the widespread adoption of innovations, we must ensure that public sector policies are designed to foster, rather than stifle, competition in the private sector. This means that we have to reduce barriers to competition. We are catching up on this front with greater attention to competition issues. The deregulation of the telecommunications sector is a case in point.
Technological collaboration brings about mutual benefits to the collaborating partners. In the case of Hong Kong, collaboration with the Mainland of China has been our focus. The Mainland has built up a strong research culture and technological capability. It has many world class universities and research institutes which provide fertile ground for new ideas and concepts to germinate. This will be a key source of input and a critical catalyst for the promotion of innovation and technology in Hong Kong. In order to tap the Mainland's rich R&D resources, we encourage, facilitate and support closer co-operation with Mainland bodies through joint projects, seminars, visits and conferences.
The XIIth World Productivity Congress, co-organised by the Hong Kong Productivity Council, the Chinese Association of Productivity Science and the China Productivity Centres Association is a very good example of co-operation between Hong Kong and the Mainland. I wish the event every success. Thank you.
End/Tuesday, November 6, 2001
NNNN
