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Speech by FS at International Telecommunication Union TELECOM WORLD 2006 Forum (English only) (with photo)

    Following is the speech by the Financial Secretary, Mr Henry Tang, at the opening of the International Telecommunication Union (ITU) TELECOM WORLD 2006 Forum at the AsiaWorld-Expo this morning (December 4) (English only):

Secretary General Utsumi, Minister Wang, Ministers, Excellencies, distinguished guests, ladies and gentlemen,

     Good morning. First of all, let me extend my warmest welcome to all of you. I know that some of you have travelled halfway across the globe to come here. It is a great pleasure to see such a distinguished gathering of ICT leaders in Hong Kong.

     The theme of the forum is "Living the Digital World". This is a very fitting subject for discussion among countries and regions at this important event. Over the next few days, many of you will be sharing your visions, insights, expertise and experience over various aspects of the digital world. I wish to make my humble contribution here by sharing with you my views of the roles of governments in the digital world.

Importance of Knowledge

     Digitalisation changed the way information is processed, stored, transferred and presented, immensely improving the efficiency of such activities. Together with the expanding reach of the Internet and the increasing amount of content being made available on this platform, it has become far easier for people or businesses from all over the world to obtain and disseminate information. But information has to be processed and internalised before it becomes knowledge. And it is the knowledge possessed by individuals or companies that will provide a competitive edge in the digital world.

Digital Divide

     One of the questions that the ITU has raised for this forum opening session is: how we can ensure that the digital world is open to all.

     There are many people throughout the world, whether in developed or developing economies, who may be deprived of the opportunity to access information digitally and process it into knowledge. In my view, it is squarely governments' responsibility to reduce this "digital divide" in a modern society.

     The United Nations ICT Task Force has identified three types of digital divide – access divide (on access to ICT facilities and connectivity), usage divide (on the skills to use the facilities) and usage quality divide (on how people use ICT to transform their lives).  While the access divide is a problem of infrastructure that could be tackled through providing additional hardware facilities to the less privileged segments of a community, the usage divide and usage quality divide could only be tackled through enhancing ICT adoption and knowledge building. Investments by governments in education and training is absolutely necessary, to enable one to utilise ICT properly and turn information into knowledge.

Productivity and Competitiveness

     Reducing the digital divide and raising the knowledge levels of individual citizens is not only for their own good, but also a key factor in raising the productivity and competitiveness of an economy as a whole. We have all seen how the manufacturing sector takes advantage of lower production costs of developing economies to increase the competitiveness of their products through globalisation of the production process. Through the so-called "off-shoring" of ICT-enabled business support services, the same trend has recently extended to the services sector, such as customer services, back-office services and professional services.  This is not only a cost saving exercise – the use of ICT in off-shoring also helps fill skills shortages in the home economies of the businesses.

     A study by the OECD last year pointed out anecdotal evidence that the off-shoring of ICT-enabled services is growing rapidly. As a result of the rapid developments in ICT systems and broadband communications, as well as the liberalisation of trade in services in general, service activities are now less constrained in their choice of location than they traditionally were.

     Indeed, Hong Kong is a prime example in this trend. Over the past decade, we have been leveraging on human resources available in the Mainland of China, particularly in Guangdong Province, to meet our skills shortages and to free up human resources in Hong Kong for activities higher up the value chain.  Today, one out of three in Hong Kong's labour force belongs to the higher-skilled, professional and managerial group, and this group has been growing at an annual rate of 4% a year.

     To developing economies, the digital world provides enormous opportunities to offer the services of their workforces to a wider group of businesses, provided that their workforces meet the cost or skill requirements.  It would be incumbent upon the governments of developing economies to invest to upgrade the knowledge level and skills base of their workforce to tap such opportunities.

     To developed economies, like Hong Kong, the digital world could mean more flexibility for businesses to increase their productivity and competitiveness, but at the same time, the part of our workforce with lower skills would face more competition from other workforces from all around the world. It is imperative for governments of developed economies to invest in formal and continuous education to help the workforce to consistently upgrade their knowledge base and skills levels so as to maintain their productivity and competitive edge.

Protection of Intellectual Property Rights

     Knowledge is most valuable to productivity and competitiveness when it is used for the creation of information goods. However, the nature of information goods is such that while it may take a significant amount of matter or energy to create them, it costs practically nothing to reproduce them. This means, once created, there is in theory no shortage in the supply of the information goods. This is detrimental to the innovative use of knowledge in the digital world and the problem can only be alleviated through a stringent system of intellectual property rights. Therefore, in the digital world, another important role of government is to create robust intellectual property rights regimes to preserve the value of knowledge and protect the information goods produced by the knowledge-based industries.

     Here in Hong Kong, we fully recognise our responsibility in this area.  We have set up teams in the law enforcement agencies dedicated to tackling piracy on the Internet through round-the-clock monitoring. Last year, we made the unprecedented move of prosecuting the world's first case of copyright piracy using the peer-to-peer file sharing programme called "Bit Torrent". Our courts recognised the importance of protecting the information goods and, in accordance with our laws, convicted the infringer. Information goods can be transferred over the Internet without regard to national boundaries. I sincerely hope that governments and law enforcement agencies all over the world can join hands to protect information goods in the digital world.


     Ladies and gentlemen. I have highlighted what I believe to be the key asset in the digital world – knowledge – and the role of government in fostering knowledge and in putting in place a system to protect it.  Indeed, if we look at the recent developments in the ICT industry, particularly the rapid rise of popularity (and very high valuation) of providers of free email services, search engines, video sharing platforms, etc. over the Internet, it is clear that the business and human dynamics of the digital world has been very different from the traditional world. As those who set public policies, it is our responsibilities in government to create favourable and safe environments to allow the brains in the community to absorb as much knowledge as they could and innovate.

     This TELECOM World event, as well as the World Summit on the Information Society also organised by the International Telecommunication Union, have provided important platforms for policy makers and private sector participants to gather and develop partnerships for the advancement of the Millennium Declaration of the United Nations, particularly for our “Generation @”.  I wish the forum a resounding success.

     Thank you very much.

Ends/Monday, December 4, 2006
Issued at HKT 12:39