FS' speech at 16th Annual Conference of the Hong Kong Institution of Science (English only) (With photo/video)

FS' speech at 16th Annual Conference of the Hong Kong Institution of Science (English only) (With photo/video)
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     Following is the speech by the Financial Secretary, Mr John C Tsang, at the 16th Annual Conference of the Hong Kong Institution of Science at Hong Kong University of Science and Technology this morning (November 1):

Prof Ng (Ching-fai), Professor Wong (Yuk-shan), Mr Liu (Yingli), Ladies and Gentlemen,

     Good morning.

     I am delighted to be here for the 16th Annual Conference of the Hong Kong Institution of Science.

     The last time I spoke at your Annual Conference was in 2003 in my former capacity as Secretary for Commerce, Industry and Technology.  It is a great pleasure to be back and to see that the enthusiasm and ingenuity of our scientists is today stronger than ever.

     The theme of my talk is “Hong Kong – A Regional Service Hub for Science and Technology.”  It is a fitting theme, given today’s globalised world, and Hong Kong’s role in the sphere of science and technology in this globalized environment.

     A sound legal framework, strong intellectual property protection, financial services and educational services are just a few of our strengths.

     With the global credit crisis biting hard, it is even more important that our brightest thinkers stay ahead of the game.  We will be looking to our scientists and innovators for solutions to            the current difficulties, and for new ideas to capitalise on the shifting economic landscape.

     I believe that this is an opportune moment for us to seek to enhance our innovation power and technological capability, and firmly establish this city as a regional innovation and technology services hub.

     Innovation and technology have changed our world and reshaped our future.  People are now more aware of the close link between technological progress and economic growth, both at the corporate and the national levels.  Economies around the world are stepping up efforts to support R&D, strengthen technological infrastructure, nurture and attract research talents and attract high-tech companies.

     For Hong Kong, we must recognize that our economy relies not only on service industries, such as finance, tourism and logistics.  We need to identify other growth sectors for the future.  That is why we cannot afford to downplay the importance and contribution of our technology sectors.

     Although most of our production lines have long since moved to the Pearl River Delta (PRD), Hong Kong remains the location of choice for most “front-office” operations.  This includes high value-added commercial activities, including sales and marketing, product design and development, quality control, shipping and financing.

     This model has worked well for decades.  Hong Kong businessmen have set up some 80,000 factories in the PRD, and the region has become the famous “Factory of the World”.  However, the miracle will not last forever.  Most of the enterprises in Hong Kong and the PRD region have been relying on the OEM modality, with imported technologies, and little original design or branding capabilities.  Facing the new economic situation, these enterprises now understand that there is a need to enhance their indigenous innovation capabilities and develop their own technologies, adding value to their products and services, and developing original brands to excel in the global market.

     With the rising demand for technology and innovation in the PRD region, Hong Kong should grasp these opportunities.  Our well-established advantages include robust intellectual property rights protection, versatile commercial service, strong research capability, free information flow and world-class financial services.  These are vital in developing the city into a technology service hub in the region, providing a platform for technology development, transfer and commercialisation.  Adjacent to the “Factory of the World”, Hong Kong is an ideal place for the global industrialists to apply new technologies and turn them into innovative products, services or work procedures.  At the same time, technology providers can easily find the right manufacturing companies to turn their technology into successful products.

     In this regard, the Government has developed a comprehensive policy framework to provide an environment that is conducive to the development of high-value-adding and high technology industries.  This is essential for nurturing autonomous innovation capabilities and for sustaining long-term economic growth in Hong Kong.

     The $5 billion Innovation and Technology Fund, or ITF, is an integral component of our innovation and technology programme to drive forward innovation and technological upgrading in Hong Kong’s manufacturing and service industries.  Established in 1999, the ITF has four schemes to cater for different applied R&D needs of the industry.  Priority is given to projects with considerable innovation and technology contents that can contribute substantially to innovation and technology upgrading in industry, and have secured strong support from the relevant industry.  So far, the ITF has supported about 1,200 projects, and provided funding of $3.6 billion in different technology areas.

     Apart from funding support, the Government is committed to making available, and enhancing our technological infrastructure for R&D enterprises to flourish.  Hong Kong Science Park opened its doors in 2002.  It offers a comprehensive range of services to cater to the needs of the industry at various stages, ranging from nurturing technology start-ups through the incubation programme to providing premises and services in the Park for applied R&D activities.

     To enhance Hong Kong’s applied R&D capability, we established the Hong Kong Applied Science and Technology Research Institute, or ASTRI, in the year 2000 to perform high quality R&D for transfer to the industry for commercialisation.  ASTRI has conducted many excellent researches, particularly in the domain of communications technology and consumer electronics.  Many of these achievements have been successfully commercialised.  ASTRI also seeks collaborations with other renowned research institutes.

     The establishment of five R&D Centres in April 2006 marked an important milestone of the Government’s efforts to further promote the development of innovation and technology.  The centres undertake industry-oriented research in technologies that are in high demand in the PRD region.  The focus is on information and communications technologies; automotive parts and accessory systems; logistics and supply-chain management enabling technologies; nanotechnology and advanced materials, and textiles and clothing. These are areas where Hong Kong has a competitive edge, and the potential to meet market needs for priority development.

     The selection of these five focus technology areas are based on an extensive research into the industry requirements in the Greater PRD region, and a public consultation exercise that we did in 2004.  The R&D Centres are actively seeking collaboration with the industry and have kick-started more than 154 R&D projects with a total approved funding of $779 million.

     In addition, to encourage more design activities in Hong Kong and further promote Hong Kong brand names, we launched a DesignSmart Initiative in 2004 with the establishment of a $250 million fund.  The InnoCentre, which was established in late 2006, also provides a one-stop service by connecting designers and potential clients.  It offers various support including incubation programmes for design start-ups, office accommodation for design companies, design resource centre and organizing design-related seminars and training.

     Strengthening technological co-operation between Hong Kong and the Mainland is one of our major initiatives to promote Hong Kong as a regional hub for innovative and technological activities.  The national 11th Five-Year Plan places strong emphasis on autonomous innovation and upgrading of overall hi-tech capability and technology levels of the industries.  Hong Kong possesses many favourable conditions that are conducive to the development of innovation and technology.  We can play an active role in supporting national technological development, such as providing services in R&D, technology transfer as well as technological information and IP exchange.

     We have established collaboration mechanisms at the national, regional, provincial and municipal levels to promote technology co-operation and exchange with our Mainland counterparts.  Our aim is to create a win-win situation for the Mainland and Hong Kong by complementing each other’s strengths in innovation and technology.

     We have jointly established the Mainland and Hong Kong Science and Technology Co-operation Committee with the Ministry of Science and Technology to formulate technology co-operation and exchange programmes.  The Committee has agreed to enhance co-operation in six areas, including integrated circuit design, RFID technologies, nanotechnology, Chinese medicine, energy saving and environmental protection.

     We are also working closely with Guangdong Province and the Shenzhen Municipality.  The Guangdong-Hong Kong Technology Co-operation Funding Scheme, or TCFS, was launched in 2004 to encourage closer collaboration between research institutions and technology enterprises in the two places.  It also promotes upgrading technology and industry standards in the Greater PRD region.  Over the past four years, the two sides have supported more than 660 projects with a total funding of over $1.6 billion in various technology areas.  The Scheme now continues to support applied R&D projects of mutual interest.  The application round just closed in mid-October and assessment is under way.

     In May last year, we signed a co-operation agreement on the “Shenzhen/Hong Kong Innovation Circle” with the Shenzhen Municipal Government.  Since then, both sides have taken forward a number of initiatives, such as implementing a joint funding scheme for applied R&D projects, and the setting up of the “Shenzhen/Hong Kong Productivity Foundation”.  The Hong Kong Science and Technology Parks Corporation and the Shenzhen Hi-Tech Park have also agreed to set up “Interactive Bases” at each other’s park to promote more co-operation between technology enterprises in the two parks.

     The Governments of Shenzhen and Hong Kong are also actively promoting large-scale technology collaborative projects.  Earlier this year, we have successfully invited DuPont to set up its global photovoltaic business headquarters and R&D centre in Hong Kong, as well as a related downstream development and manufacturing base in Shenzhen.  This is the first major technology co-operation project under the “Shenzhen/Hong Kong Innovation Circle” framework.

     Ladies and Gentlemen, we are continuing to promote the development of innovation and technology in Hong Kong.  With the concerted efforts of Government, industry, universities, and research institutes, both in and outside of Hong Kong, I am confident that we will strengthen and capitalise on Hong Kong’s position as a regional service hub for science and technology.

     I commend the Institution of Science on your work over the years and congratulate today’s award winners.  I wish you all a very successful Annual Conference.

     Thank you.

Ends/Saturday, November 1, 2008
Issued at HKT 11:22

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