Speech by Chief Executive at HK Science and Technology Parks

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Following is the speech by the Chief Executive, Mr Tung Chee Hwa, at the opening ceremony of the Philips Electronics Building at the Hong Kong Science and Technology Parks this morning (February 2):

You know Mr Wente, we are so proud to have Philips here. We want to make you feel at home all the time, especially on this very auspicious occasion. So we even make sure the weather is like that of Amsterdam, Holland.

It gives me great pleasure to take part in today's opening of Philips Electronics' new facilities at the Hong Kong Science Park. Royal Philips Electronics is of course Europe's largest electronics company. It is also a world leader in the manufacturing of medical and health care equipment and life-style electronic products. We are delighted that they operate their Regional Headquarters for Asia Pacific out of Hong Kong, employing in Hong Kong a total of 3,000 staff.

The company has been in Hong Kong since 1948 and its commitment to Hong Kong is shown both at this regional headquarters in the Pacific Place Three in Central and the number of business units it operates in the Science Park. Indeed, I understand that two of the business units located within the Science Park have global responsibilities.

In August last year, I met the President and Chief Executive Officer of Royal Philips Electronics, Mr Gerard Kleisterlee, when he visited Hong Kong with senior members of his management team and with Mr Wente. We had an excellent meeting then. I am also delighted that Mr Kleisterlee has kindly accepted my invitation to be a member of my Council of International Advisers. The opening of your facilities here and of your new Regional Headquarters reinforces the confidence which he told me the company has here in Hong Kong.

Philips' new presence at the Science Park and the high value-added services that you bring reinforce our position as a prime location for innovation and technology-based companies, and strengthen the innovation and technology clusters at the Park.

Indeed, the past seven years have witnessed our very substantial and persistent investment in science and technology. Today, we have a pool of talent and skilled labour; excellent infrastructural support such as the Science Park and Cyberport; world-class universities and research personnel with a strong link with the business sector; and a robust and vigorously enforced intellectual property legislation which is on a par with international standards. Added to these are a low and simple tax regime; the largest pool of venture capital companies in Asia; and government support for research and development (R&D) through our Innovation and Technology Fund.

Of course for international companies like Philips, the Mainland of China is likely to be their ultimate target and this is why we are doing all we can to give first-mover advantage to Hong Kong-based companies with the implementation of CEPA. The Hong Kong Science and Technology Parks Corporation has also done an excellent job in achieving collaboration with other strategic IC design bases in the Mainland under the Central Government's strategy for the industry. We have also recently signed an agreement with Guangdong Province to mutually support R&D collaboration between Hong Kong and the Province.

I am confident that we will attract more investment in innovation and technology over the next few years. The Innovation and Technology Commission has been consulting Hong Kong's industry and R&D communities to ensure Government's support is targeted to nurturing next-generation technologies in areas where we can compete with the rest of the world. After a public consultation conducted last year, we decided to strengthen support for R&D in nine technology areas through the Applied Science and Technology Research Institute (ASTRI) at the Science Park and to set up four new R&D Centres. In particular, ASTRI will take the lead in applied R&D in five technology areas including consumer electronics, communications technologies, IC design and opto-electronics. Other new initiatives like DesignSmart have also been introduced to attract and support the design industry. I am sure Mr Wente is already aware that some of these areas coincide with Philips' interests.

Indeed our aim is to build Hong Kong as an innovation and technology hub. Although this will take time, I believe we have now all the important ingredients to realise this objective.

I would like to thank Philips for your vote of confidence in the Asia Pacific market and in Hong Kong. Philips is an excellent example of how a successful international technology company can take advantage of all that Hong Kong and the Mainland have to offer. By combining your own design and research capability with Hong Kong's world-class infrastructure and business environment, coupled with manufacturing facilities and high market potential in the Mainland, you have a success model which we are proud to promote around the world.

The Asia Pacific market will provide tremendous growth opportunity for Philips. I am sure that Hong Kong will play an integral part in helping you achieve that growth. I wish you every success here in Hong Kong, regionally and globally in the years to come.

Thank you all very much for coming.

Ends/Wednesday, February 2, 2005

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