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Following is a speech by the Secretary for Commerce, Industry and Technology, Mr John Tsang, on "2004 Digital 21 Strategy: Sustainability and Opportunities" at the Hong Kong Computer Society Luncheon this (March 4) afternoon:

Daniel [Lai], distinguished guests, ladies and gentlemen,

I am delighted to have the pleasure of attending the Hong Kong Computer Society luncheon today, and to have the opportunity of sharing with you our latest thinking on how we could sustain the momentum of IT development in Hong Kong, and harness the benefits of IT for the entire community.

In the information age, we need to connect ourselves effectively and efficiently to all our partners in the global system, and use IT to sharpen our competitive edge. Different economies around the world have formulated specific strategies that are suitable for their own state of development to exploit fully the potential of IT in an effort to enhance productivity, generate economic growth and improve the quality of life for their citizens.

In Hong Kong, we first set out our Digital 21 IT Strategy in 1998. The focus was to build up Hong Kong's information infrastructure and create an enabling environment for e-business to prosper. Recognising that our strategy and programmes had to keep pace with the ever-changing technological landscape, we undertook to regularly review and revise the Strategy, and update our goals and targets. We duly did so in 2001.

Since then we have put in place the environment, infrastructure, skills and culture to encourage the development and adoption of IT by our community. We are now a mature and avid user of IT. Our achievements in IT development are recognised internationally. But we are not complacent.

Last October, we published a draft updated Strategy for public consultation and we received a total of 87 submissions, including one from your esteemed Society. We are grateful for your insightful and invaluable comments.

We have collated the many useful comments we have received into our draft and today, I am pleased to announce the promulgation of the 2004 Digital 21 Strategy. In the updated Strategy, we have identified eight main areas of action aiming to sustain the momentum we have created in the last five years to make Hong Kong a leading digital city, and to continue to harness the benefits of IT for the entire community. I shall highlight the key directions and initiatives under each one of these eight action areas.

(1) Government leadership

We believe that Government should be an advocate and champion of new ideas and technologies, as well as an effective facilitator to enhance the innovative capability and business environment of the industry, and in this process encourage investment and innovation in IT.

With the resources at our disposal, the Government should play a leading role, not only in adopting IT in our own management, operation and communications, but also in driving the wider use of IT in business and community, and fostering the development of the industry. We shall press on with our e-government strategy and expand our outsourcing policy, covering new projects, application maintenance, and system management and operation. In particular, we intend to review the Information Technology Professional Services Arrangement this year and consider other measures to facilitate the bidding for government tenders by small and medium-sized IT enterprises. These measures will not only generate business opportunities for the IT industry, particularly the SMEs, but also create opportunities for innovation, entrepreneurship and technological development.

(2) Sustainable e-government programme

The Government is committed to leading by example in the use of e-business, both in conducting internal business and delivering public services. As with other e-government programmes, our initial focus was to provide an e-option. We have now met the target of providing e-options for 90 per cent of the public services amenable to the electronic mode of delivery. Looking ahead, we intend to sharpen the e-government focus even further, drive utilisation, enhance accessibility to Government, focus more on service quality and effectiveness in service delivery through re-engineering of government procedures, and seek to bring value to customers as well as to Government. We shall formulate a road map in the first half of 2004 for the further development of e-government services.

(3) Infrastructure and business environment

One of the biggest achievements under the previous Digital 21 Strategy is the establishment of a world-class information infrastructure and e-business environment that have so successfully contributed to the development of Hong Kong as a digitally connected city. The two flagship technology projects, namely, the Cyberport and the Science Park, will sharpen their technology foci and intensify their support to the industry, particularly in the areas of wireless applications and services, digital media technologies, integrated circuit design and more.

In the light of the rapidly changing technological landscape and the new business models brought about by convergence, we intend to review our policies and regulatory framework in order to facilitate the development of the broadcasting and telecommunications industries, as well as the growth of the broadband infrastructure and wireless access.

We shall also continue to encourage e-business and IT adoption by the business sector, in particular the small and medium-sized enterprises. In addition to our existing generic programmes, such as the provision of advisory services and financial support, we shall enhance our collaboration with trade associations in rolling out sector-specific programmes to promote e-business adoption in individual sectors. We have started with the travel industry, and we intend to expand the initiative to cover other sectors.

In view of the community's concerns about information security and economic loss caused by spamming, we shall step up our efforts to maintain a secure environment for the conduct of e-business, and review in 2004 the effectiveness of existing measures in containing spamming, and consider the case for legislative approach, among other things.

(4) Technological development

IT is an integral part of a knowledge-based economy. We need to strengthen our ability to apply IT, and develop our capability for the development of innovative applications and services. To this end, we shall continue with our investment in research and development, and strengthen the commercialisation arrangements for these results to ensure more effective technology transfer. We shall also seek to foster the development of innovative applications and services in areas, including wireless technologies, digital entertainment, open source software and other new technologies through the provision of funding and other support measures.

In the area of wireless technology, the Hong Kong Wireless Development Centre was established with Government funding support at the Cyberport in December last year. The Centre brings together wireless solution developers, mobile operators and equipment vendors, and provides a neutral and central platform for the development, testing and marketing of innovative applications and services. In the coming year, the Centre will, in collaboration with local and overseas industry support organisations, help wireless developers explore new market opportunities and deploy new technologies, such as the often mentioned RFID, or radio frequency identification technology.

The availability of new technologies and equipment, the convergence of different media and businesses and the increasing demand for entertainment products worldwide and in the Mainland, in particular, have provided a golden opportunity for our digital entertainment industries. Hong Kong has considerable advantage in developing this sector with our well established industrial base in film production, broadcasting and advertising. Together with the trade associations, industry support bodies and training institutions, we are fleshing out a programme of initiatives to promote and support the development of the digital entertainment industries in Hong Kong. One of the major initiatives is the establishment of the Digital Media Centre at Cyberport to provide state-of-the-art post-production facilities as well as technical and marketing support to multimedia content creators at affordable costs. The Centre will be opened by the end of this month. A series of events will be organized to upgrade the skills and technological expertise of our many aspiring George Lucases and Peter Jacksons.

(5) Vibrant IT industry

We need to promote a vibrant, competitive and innovation driven IT industry in Hong Kong. While the Government's economic policy is not to subsidise industry, there is a lot that we can do together with the trade associations, professional bodies, such as your esteemed Society, and industry support organizations to support the industry, including the identification and exploration of business opportunities locally, in the Mainland and other overseas markets.

Our programme of support includes the brand-building and trade promotion efforts of the Hong Kong Trade Development Council, the integrated services for Hong Kong companies in the Pearl River Delta provided by the Mainland offices of the Hong Kong Productivity Council, and our programmes to help the local industry enhance service quality and build capability, such as CMM. We shall also continue to work closely with the industry to leverage on the opportunities arising from CEPA and our economic integration with the Pearl River Delta.

(6) Human resources in a knowledge economy

Our ability to master IT and its many applications is vital for Hong Kong's transition to an innovation-driven and knowledge-based economy. We need to have the necessary human resources in IT to meet the demand of a knowledge economy. The Education and Manpower Bureau is now formulating the strategic direction for the further development of IT in education, and will consult various stakeholders in the coming months. Teachers and school heads will be continuously trained with a view to harnessing the power of IT for learning and teaching of different subjects. E-learning and enhanced partnerships between schools and the private sector will also be encouraged.

At the post-secondary level, our vocational training and tertiary institutions will continue to fine-tune their course contents to keep pace with developments in the IT field and to meet market demand. As with the rest of the world, we shall also facilitate the recruitment of talents around the world to fill gaps in manpower, expertise and experience.

(7) Bridging the digital divide

Of equal importance to enhancing the ability of the "haves" is the need to bridge the digital divide in the community, so that different sectors, including the "have-nots", will benefit from IT development in improving their quality of life. The Government has been collaborating with the industry and non-government organisations in introducing a wide range of measures to encourage and assist the community in adopting IT. As a further step to strengthen public/private sector partnership in bridging the digital divide, we shall work together with the social service sector and the industry in setting up a Digital Solidarity Fund to provide funding for non-government organisations to carry out activities to build a digitally inclusive society.

(8) Institutional review

Last but not least, we need to put in place the right institutions to lead, coordinate, monitor and ensure the effective implementation of the measures in the updated Digital 21 Strategy.

There is clear support from the community for the proposal to review the current government structure for delivering the IT functions. We have, indeed, started examining the case of merging the Information Technology Services Department (ITSD) with the Communications and Technology Branch of the Commerce, Industry and Technology Bureau (CITB) into a single entity. The new entity should be provided with the right mandate, visibility and organization to map out IT policies and strategies, drive the e-government programme, champion the development of new applications and services, promote IT adoption by business and the community, and foster the development of the IT industry. A Chief Information Officer (CIO) post will be created to provide strong and effective leadership to the new entity.

The convergence of telecommunications and broadcasting has also given rise to new regulatory issues. We have seen in recent years the evolution and transformation of regulatory bodies in other economies along the line of a single unified authority. We shall assess whether the current regulatory structure for the two sectors will best serve Hong Kong in the era of convergence and deregulation, and consult the public on our specific proposals later this year.

As you can see, we are seeking to substantially upgrade our Digital 21 Strategy through a public consultation exercise drawing on the input of our community. We also intend to give "life" to the Strategy and use it as a working document. For example, the new CIO will be required to measure progress at the end of each year against what is set out in the Strategy, and propose specific targets, actions and plans for the following year. In the next 12 months, we shall flesh out the details of the many proposals contained in the updated Strategy. This will be done in an open and transparent manner, involving the contribution and participation of all stakeholders. We look to your esteemed Society's continued support for this important endeavour.

Ladies and Gentlemen, IT development is an evolutionary process that can only be sustained by continuous inputs in terms of innovation, investment, regulatory and policy support, and most important of all, commitment of all stakeholders. The 2004 Digital 21 Strategy sets out a sustainable programme of measures with the aim of realising the full potential of IT to accelerate Hong Kong's transition to a knowledge-based economy, and to provide the impetus to economic growth and prosperity. We shall continue to work closely together with you all in harnessing the benefits and opportunities of IT for the good of everyone in our community.

Thank you.

Ends/Thursday, March 4, 2004

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