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Following is the speech by the Secretary for Commerce, Industry and Technology, Mr John Tsang, at the Hong Kong Information Technology Federation luncheon today (October 10): (English only)

Charles, Distinguished Guests, Ladies and Gentlemen,

I am pleased to have been invited to speak at the Hong Kong Information Technology Federation luncheon today.

This is the first time that I have addressed the local IT industry since I took up the post of Secretary for Commerce, Industry and Technology two months ago. With the presence of such a distinguished group of representatives from the local IT industry, this luncheon is, indeed, a most opportune occasion for me to set out my thinking on how I intend to nurture IT developments in Hong Kong.

In the past few years, the Government has assumed a leadership role in promoting the development and adoption of IT by clearly setting out the vision, the initiatives and the programmes on how the Government, business, industry, academia and general community should work together to reap the full benefits promised by the dawning of the IT era. We published the first Digital 21 IT Strategy in 1998, focusing on building capacity and infrastructure for both the public and private sectors to adopt IT and e-business, and to become active participants in the information economy. The strategy was reviewed and updated in 2001 to position Hong Kong as a leading digital city in the globally connected world.

Most of the initiatives set out in the 2001 Strategy have been successfully completed. The remaining items are ongoing and proceeding on schedule. We have now put in place the right environment, infrastructure, skills and culture to encourage the development, adoption and use of IT by the entire community.

Our progress and achievements have received international recognition. Hong Kong was ranked first in the International Telecommunications Union Mobile/Internet Index 2002. The Economist Intelligence Unit ranked Hong Kong first in Asia in 2003 in terms of e-readiness. Accenture ranked Hong Kong seventh in the world in 2003 in terms of e-government leadership. Hong Kong has come a long way in positioning itself as a leading digital city.

I don't believe that I need to go into the details of our achievements to date, which you already know very well. However, I would like to raise with you the most pertinent question of all, and that is, with what we have achieved to date, where do we go from here? As I see it, the challenge now is how we can sustain the momentum that we have created in the last five years, and how we can continue to harness the benefits of IT for business, the community and Hong Kong's position in the world.

We see this endeavour in eight main areas of action. We intend to set them out in an updated Digital 21 Strategy for release early next year. To realise our vision of making Hong Kong a leading digital city in the globally connected world, we need the input of the IT industry, business sector, academia and the public on how we should work together. We have put our current thinking into a draft 2004 Digital 21 Strategy, and we will publish the draft later today for a two-month public consultation.

Before I elaborate on each one of these eight areas, I have to say that, for those who are looking for grand, new earth-shaking initiatives, I am afraid they will be disappointed. In reviewing the progress of implementation of the 2001 Strategy and formulating our future action plan, we have taken a pragmatic, down-to-earth approach. We intend to build on the sound foundation that we have established, carry through the programmes initiated in the past years, deepen and broaden these initiatives, and add on new elements where warranted.

Government leadership

Let me now set out what I have in mind for these eight main areas of action. First, Government leadership. Government leadership and commitment is vital in realising our goal as a leading digital city. Public policy aside, the Government has strong influence through the use of its resources, implementation of information systems and procurement arrangements on how we seek to achieve our aspirations. The Government can be an effective facilitator to enhance the innovative capability of both industry and the community, promote the development of industry and enterprises, and in this process encourage investment and innovation in IT.

We will continue to be an advocate and champion to promote Hong Kong's international image as a dynamic digital city. We will press on with our aggressive IT outsourcing strategy and e-government programme to generate not only business for the private sector, but also opportunities for innovation, entrepreneurship and technical development. We will also facilitate the development of innovative technological applications through our information system requirements, procurement policies that demand the use of such innovations, and other support measures, such as opening up the intellectual property in Government IT systems for wider application by the IT industry. We also have a role to play in driving adoption of e-commerce through our e-procurement arrangements and the Electronic Service Delivery Scheme.

Sustainable e-government programme

The second main area of action is to sustain our e-government programme. As with other e-government programmes, our initial focus is to provide an e-option. Now that we are on track to meet by the end of this year our target of providing e-options for 90 per cent of the public services amenable to the electronic mode of delivery, we will need to deepen the e-government programme and demand a higher level of service quality and effectiveness in service delivery.

We will focus on driving up utilisation, promoting customer relations management and improving customer interface, promoting horizontal integration in service delivery, enhancing government accessibility and transparency, leveraging the most appropriate technologies, and enhancing the measurement of the benefits of e-government projects. Having regard to these and other considerations, we will formulate a strategy in the first half of 2004 for the further development of e-government delivery.

Infrastructure and business environment

Over the past few years, we have built a world-class information infrastructure and e-business environment. This achievement is, among other things, the result of public policy that promotes competition, investment and innovation in the telecommunications sector. Our third area of action is to keep up with these efforts and apply them to other sectors, where appropriate. We intend to strengthen our broadcasting policies and regulatory framework by facilitating convergence of different media, removing regulatory burdens, and providing an enabling environment for industry to innovate and develop new services. We will consult the public on our thinking early next year. We will also conduct a second round of consultation on digital terrestrial television regarding specific issues, such as technical standards, licensing approach and digital audio broadcasting.

The two flagship technology infrastructure, namely, the Cyberport and Science Park, will intensify their efforts in promoting wider industrial applications in different sectors. We will also continue to drive IT adoption by the business sector, in particular small and medium size enterprises, through sector-specific support programmes and development of common processes and data standards, as well as free or low-cost business solutions, with financing support from our existing funding schemes.

Technological development

The fourth area is technological development. Technology is a strong driver for productivity enhancement for any advanced economy. We need to strengthen our ability to adopt and apply IT, and develop our capability for the development of innovative applications and services. Under this main area of action, we have identified wireless technologies and services, digital entertainment, and open source software for promotion.

The Wireless Solutions Development Centre and Digital Media Centre at the Cyberport will provide comprehensive support services for the wireless and digital entertainment industries. We will continue to promote open source software technologies and solutions as viable options for adoption within Government, and promote their adoption in the private sector through provision of funding support from existing funding schemes. The Government will also continue with its investment in research and development, and its efforts to link industry to research organisations for more effective technology transfer and commercialisation.

A vibrant IT industry

The next main area of action is, I believe, close to your heart, and that is our commitment to fostering a vibrant IT industry. We need to promote a vibrant, competitive and innovation driven IT industry in Hong Kong. The reasons are obvious and require little elaboration. While the Government's economic policy is clearly not to subsidise industry, there is a lot that we can do as facilitator, together with industry support organisations and trade associations.

We can leverage the opportunities arising from the Mainland/Hong Kong Closer Economic Partnership Arrangement, or CEPA, economic integration with the Pearl River Delta, and Hong Kong as a window on the world for the Mainland information industry. We will also continue to work with the Hong Kong Trade Development Council to raise the profile and branding of Hong Kong's IT industry, and exploit business opportunities in the Mainland and overseas markets. To enhance the competitiveness of Hong Kong software companies in the international arena, funding support has been provided from different funding schemes to assist them in enhancing the quality of service and obtaining internationally recognised quality certification.

Human resources in a knowledge economy

Another main area of action for us is to work with educational and vocational training institutions and the industry to enhance the training and skills of our workforce and our next generation. Human resources are the backbone of every knowledge-based economy. The Education and Manpower Bureau is now reviewing the progress of integrating IT in education and formulating the strategic directions for the further development of IT in education. Our post-secondary institutions have been strengthening the IT component of their programmes and adding new ones in response to market demand. Separately, the EMB is working on the establishment of a Qualifications Framework across different sectors, including the IT sector, to provide clear information on the standards of courses and course providers.

Bridging the digital divide

To ensure that different sectors of the community will benefit from IT development in enhancing the quality of life, a wide range of measures has been introduced to bridge the digital divide in our community. Under the "IT Hong Kong" campaign, a wide range of activities and programmes aimed at raising awareness and promoting wider adoption of IT in the community have been organised. We will continue with these programmes and launch new ones, such as providing a sound version of selected information on Government websites to facilitate access by the visually impaired and elders.

Institutional review

We have proposed a visionary programme of measures with the aim of realising the potential of IT to its full in order to provide the impetus to economic growth and prosperity. To deliver the expected results, an institution acting as a central focal point is required to coordinate, monitor and ensure their effective implementation. We will consider the case of a more integrated structure within Government by merging the Information Technology Services Department into the Communications and Technology Branch of the Commerce, Industry and Technology Bureau. In addition to driving the e-government programme, the merged organisation will be able to have a co-ordinated role in promoting the development of applications and services, supporting the information industry and driving IT adoption.

Since 1998, the highest-level government advisory body on IT matters has been the Information Infrastructure Advisory Committee. The Committee is now covering de facto an increasingly wider range of issues related to information and communications technology, industrial development and other policy matters. We will examine how the terms of reference of the Committee and its operation reflect adequately this evolution.

The convergence of telecommunications, broadcasting and the Internet and the rapid changes in technological development and business models have presented major challenges to regulatory authorities in the world. In recent years, we have seen the evolution and transformation of regulatory bodies in other economies along the line of a single authority. In Hong Kong, the regulation of telecommunications and broadcasting falls on two separate entities, namely the Telecommunications Authority and the Broadcasting Authority. These authorities operate under different legislative frameworks, institutional bases and professional support with different organisational culture and competency. We will review whether this regulatory structure is capable of continuing to serve Hong Kong in the era of convergence and deregulation.

Ladies and gentlemen, I have just given you a snapshot of our thinking on where we go from here in making Hong Kong a leading digital city. These are our preliminary thoughts. As I have said earlier, we will issue later today a draft 2004 Digital 21 Strategy for public consultation. The draft will set out our current thinking in greater detail. We will write to organisations that have an interest in the Digital 21 Strategy to actively solicit their views. These organisations will include IT industry organisations like yours, relevant bodies in the business sector, professional bodies, and education and training institutions. We will carefully consider the public comments received before finalising the new strategy.

I look forward to receiving your comments and input to the new strategy. With our concerted efforts, I am sure we will be able to make Hong Kong the leading digital city in our globalised world.

Thank you.

Ends/Friday, October 10, 2003

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