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Following is a question by the Hon Andrew Leung and an oral reply by the Secretary for Commerce and Economic Development, Mr Frederick Ma, in the Legislative Council today (December 19):
Question:
It has been reported when the Chief Executive met with the Premier of the State Council while he was in Beijing earlier to report on his work, the Premier made suggestions on four aspects, namely, innovation, knowledge, talents and the environment, regarding the development of Hong Kong, and pointed out that Hong Kong's neighbouring countries had been actively developing and reforming their industries in recent years, and had introduced the new elements of technology and innovation. In this connection, will the Government inform this Council:
(a) of the amount of investments in scientific research, development and encouraging creativity relating to commerce and industry made respectively by the Government and the commercial and industrial sectors in the past five years, and the proportion of such investments in the gross domestic product;
(b) whether the Government has plans to introduce new policies and measures to induce and encourage enterprises to inject more resources in the three areas mentioned in (a) on their own initiative; if it has, of the details of such plans; if not, the reasons for that; and
(c) given the Government's strong financial position at present, whether the authorities will, in addition to those funding plans already announced, inject more resources to develop innovative technologies and creative industries, so as to encourage more local and overseas enterprises to engage in creative industries in Hong Kong, and assist Hong Kong in establishing a regional cluster of creative industries; if they will, of the relevant details; if not, the reasons for that?
Reply:
Madam President,
Since the commencement of reform and opening of the Mainland in the late 70s, the manufacturing industry of Hong Kong has gradually moved northwards to the Mainland for development and has been adopting Original Equipment Manufacturing (OEM) as its main mode of operation. Hence, the enterprises have devoted relatively fewer resources to conduct research and development (R&D). Nevertheless, after pursuing firmly the basic national policy of opening to the outside world for nearly thirty years, the economic development and social progression of the Mainland has already reached a new stage and is developing in the direction of upgrading the industrial structure as well as actively attracting R&D and innovative technology. The Hong Kong Special Administrative Region cannot afford to stick to the status quo. Therefore, the Special Administrative Region Government has been encouraging and promoting industries to undertake R&D and innovation to upgrade and enhance their competitiveness. With the concerted efforts of the Government, industries and academia, the R&D foundation of Hong Kong has been strengthened gradually and the commercial and industrial sectors have attached increasing importance to R&D and innovation in recent years. We will continue the promotion work to push ahead the upward momentum.
Replies to the questions raised by the Hon Andrew Leung are as follows:
(1) According to the statistics compiled by the Census and Statistics Department, the expenditure on R&D and innovative activities performed by Hong Kong's commercial and industrial sectors increased from $2.1 billion in 2001 to $6.3 billion in 2006, while its ratio to gross domestic product (GDP) also rose from 0.16% to 0.43% during the period.
The total expenditure on R&D and innovative activities in the Government, public technology support organisations and higher education sector recorded an increase from $5 billion in 2001 to $5.3 billion in 2005. Its ratio to GDP maintained at around 0.39% during the period. The R&D expenditure relating to commerce and industry has been included in these figures. The compilation of the statistical figures of 2006 is still underway.
We currently do not have specific statistics on the amount of investments in encouraging creativity made by the Government and the commercial sector. But the Government has deployed substantial resources on directly promoting various creative industries and encouraging the development of creativity in recent years. I will elaborate in part (2) and (3) of the reply.
(2) To induce and encourage enterprises to undertake more R&D and innovation, we need favourable conditions. In this aspect, Hong Kong has a sound infrastructure as well as robust judiciary system and intellectual property protection regime, our society is free, open and pluralistic, and is an international metropolis. The Government will also continue adopting specific policies and measures to induce and encourage enterprises to inject more resources on creativity and R&D on their own initiative. Here are some examples:
(i) The Government set up the $5 billion Innovation and Technology Fund (ITF) in 1999 and implemented the new strategy of innovation and technology development in 2006.
(ii) The Special Administrative Region Government has strengthened technological collaboration with the Mainland, including the launching of the Guangdong/Hong Kong Technology Cooperation Funding Scheme and the setting up of the Shenzhen/Hong Kong Innovation Circle.
(iii) The $250 million DesignSmart Initiative was launched in 2004. In addition, $100 million was provided in 2007 to support the operation of Hong Kong Design Centre over the next five years to help our trades and industries to improve designs and build brands.
(iv) The Government has established the Digital Entertainment Incubation cum Training Centre and the Digital Media Centre to expand the digital content application.
(v) The Government has injected an additional $300 million to the Film Development Fund.
(vi) The Government will launch the West Kowloon Cultural District (WKCD) development project to gather momentum for the development of cultural and creative industries in Hong Kong.
(3) As announced by the Chief Executive in this year's Policy Address, the Government is determined to accelerate the development of the creative industries so as to promote Hong Kong as the creative capital in the region. The Chief Executive has appointed the Commerce and Economic Development Bureau to oversee the development of the local creative industries. Relevant work included the setting up of a cross-sector steering committee to work with relevant non-governmental organisations and professional bodies to plan and formulate overall strategic plans for future development, complementary facilities and manpower training.
The Administration will continue implementing the above initiatives to encourage enterprises to engage in creative and R&D activities in Hong Kong and review the effectiveness of these initiatives from time to time. We will also consider other suitable investments to boost the development of technology and creative culture in Hong Kong when necessary.
The promotion of R&D and innovation development in an economy requires not only efforts from the Government but also the active participation of the industry. The Government will be happy to listen to the views of the community, and is eager to join hands with the industry to further promote and expand the scope of R&D and innovation.
Ends/Wednesday, December 19, 2007
Issued at HKT 19:02
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