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Speech by PSCT at Cyberport Venture Capital Forum 2008 (English only)

     The following is a speech by the Permanent Secretary for Commerce and Economic Development (Communications and Technology), Mr Duncan Pescod, at the opening ceremony of the Cyberport Venture Capital Forum 2008 today (November 18):

John (Strickland), Nick (Yang), Distinguished Guests, Ladies and Gentlemen,

     Good morning!  

     It gives me great pleasure to join you all today at the Cyberport Venture Capital Forum 2008.  The Forum is in its fifth year with a timely theme, "Monetise Unexpected Innovations and Unusual Creativity that Change the World".  I hope the forum today will provide insight into methods that can be used in the real world and lead to practical solutions to problems caused by these uncertain times in the global economy.

     Professor Warren G Bennis, Founding Chairman of the Leadership Institute at the University of Southern California once said, "There are two ways of being creative.  One can sing and dance.  Or one can create an environment in which singers and dancers flourish."

     Let me let you into a little secret: I am afraid the Hong Kong SAR Government cannot sing or dance.  So we have no choice: we must create an enabling environment conducive to creative innovations under the "market-leads, government-facilitates" principle.  I believe we are generally on the right track.  Let me share with you some of the key elements of that enabling environment, which include R&D, infrastructure, policy and incubation.

     The Government encourages and supports both public and private sector R&D projects on innovation and advanced technologies.  In 2007, our Innovation and Technology Fund sponsored 178 projects at a total cost of more than $500 million.  Typical examples include work on digital TV set-top boxes, interactive TV over the Internet, mobile multiplayer online games networks, power saving LED-based street lamps, power management circuits for PDAs and mobile phones, and many others.  We know that not all projects will succeed but there is value to be gained and potential business opportunities for industry in every project we support.  We will continue to do so.

     Another example of government support is the DesignSmart Initiative.  This has sponsored 196 projects with an investment so far of $106.5 million.  There are currently 37 design companies and 43 incubatees now working at the InnoCentre.  This Initiative helps to nurture creative design talent and supports innovation in design.  We believe it will further strengthen Hong Kong's position as a focal point of design excellence in the region.  I have highlighted our support in this field because there is no doubt in my mind that research and design must go hand in hand.  Leading international companies, such as Philips, Apple and Hong Kong-based companies such as Vtech, are renowned for their ability to bring well designed and innovative products to market.  They know that design giving them a competitive advantage in a crowded market place.  What we want to do is encourage others to emulate their success.

     On the infrastructure front, there have been a number of interesting developments.  Digital terrestrial television broadcasting or DTT is perhaps the most recent and important one.  Under the implementation framework for DTT, the two free-to-air television broadcasters have started rolling out the DTT network since end 2007.  By now, the network coverage has already reached 75% of the whole territory.  It is expected that by 2012, the coverage will virtually reach 100%.  Other than providing free high-definition TV programme services, DTT has now become a new catalyst for the growth of innovative services and encouraged demand for consumer electronic products.

     Hong Kong's mobile phone penetration is among the highest in the world, standing as high as 160% as of August 2008.  To leverage on this ubiquitous penetration and capitalise on the trend towards media convergence, we are finalising the implementation framework for the introduction of mobile television services.  We expect to auction the relevant frequency spectrum for mobile TV and other innovative multimedia services such as Digital Audio Broadcasting (DAB) early next year.

     To maintain Hong Kong as the leading wireless city in the region, we recently issued an invitation to bid for the radio spectrum for the provision of Broadband Wireless Access (BWA) services in Hong Kong.  We expect BWA to generate new business opportunities as well as demand for innovative applications and services.  Together with the existing 3G mobile and Wi-Fi services, we will have one of the most modern systems in the region.

     The theme of today's Venture Capital Forum is all about innovation and creativity.  I am delighted to be able to use this opportunity to touch on work that the Government is doing to foster this in Hong Kong.  Last year, the Financial Secretary set up a Creative Industry Committee to advise him on this important area of work.  The Chief Executive announced in his Policy Address last month that we will set up a dedicated Creative Industry Office in my bureau to pull together resources within government to provide a focus for this work and to ensure that due attention is given to this important field.  It will take us some time to bring the new office fully up to speed but, in the meantime, we will shortly begin an outreach programme to contact those already working in the field, to listen to their views, try to understand exactly what they need so as to be better able to support them.

     As far as incubation is concerned, Cyberport and Science Park have served as the two major incubators for innovation and technology start-ups.  As of last month, the 62 Cyberport incubatees have received  33 local and international awards or honours, and have created 21 original intellectual property rights.  The 70 Science Park incubatees, on the other hand, have been granted 17 awards and filed 43 patents and trademarks in 2007-08.

     There is no doubt that innovation and creativity are of great importance for Hong Kong to sustain its continuous development, and even to excel in the globalisation of markets.  We shall continue to create and maintain an enabling environment that promotes innovations and creativity in the city.

     The Cyberport Venture Capital Forum has become a signature event to connect the investment community to entrepreneurs.  The discussions today should inspire you to think of new ways to develop and grow your business.  I would like to thank Cyberport, all co-organisers, sponsors and supporting organisations for their effort and contributions in staging this meaningful event.  

     I will finish with a quote by Umair Haque, a renowned adviser to investors and entrepreneurs, when commenting on Barack Obama's success in the recent US presidential elections, said, "Bigness of purpose is what separates 20th century and 21st century organisations: yesterday, we built huge corporations to do tiny, incremental things - tomorrow, we must build small organisations that can do tremendously massive things."  Or as President Elect Obama himself said, "Yes we can."

     Enjoy the forum, and thank you.

Ends/Tuesday, November 18, 2008
Issued at HKT 10:45


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