******************************************************
Following is the speech by the Financial Secretary, Mr John C Tsang, at the luncheon of international innovation forum entitled "The Innovation Imperative: Creating Opportunities in Challenging Times" at Renaissance Harbour View Hotel today (March 31):
Anthony (Wu), distinguished guests, ladies and gentlemen,
Good afternoon.
It is a great pleasure for me to join you today. A warm welcome to everyone, especially to our friends from overseas.
I wish to thank Anthony and the Bauhinia Foundation Research Centre for organising this timely forum, aptly entitled "The Innovation Imperative: Creating Opportunities in Challenging Times". Times are, indeed, challenging, and it is imperative for us to continue with the tradition of innovation in order to sustain the development of our city. Today's forum is a great platform for the cross-pollination of ideas on the promotion of innovation in Hong Kong and beyond.
It is also a good way to help celebrate the Research Centre's third anniversary. We appreciate the valuable work that you have done over the past three years, and I hope that you will continue with your effort in bringing out the best of Hong Kong.
I will take this opportunity to say a few words about what the Government has been doing to provide the best possible environment for innovation in Hong Kong. In a nutshell, our emphasis is on the provision of high-quality education, state-of-the-art facilities access to capital as well as attracting international talents.
Allow me to highlight a couple of local innovation success stories. This is not intended to blow our own trumpet, but it is a good way to illustrate the Government's role in encouraging innovation.
The first example is one that has been making headlines in Hong Kong and overseas in recent weeks. It concerns electric vehicles - or more specifically, one particular model of electric vehicle produced by a Hong Kong company, EuAuto. Earlier this month - after six years of hard work - EuAuto sold its first electric vehicle called "MyCar" in Britain.
This project began back in 2003, with initial funding from the Hong Kong Government in collaboration with the Polytechnic University. With exceptional entrepreneurship and vision, "MyCar" has moved off the drawing board and onto the road.
We are currently looking at what we should do to enable greater use of electric vehicles in Hong Kong. The Government is also exploring ways to provide adequate re-charging facilities through Government multi-storey car parks, and encouraging private sector involvement. The Government will consider introducing electric vehicles into our fleet when the related technology has matured a wider choice of vehicles has become available on the market.
The point is that innovation benefits from effective and ongoing collaboration between Government, academia and the business community. This is a model we have been developing over the years, and which we will continue to develop.
Through the Hong Kong Automotive Parts and Accessory Systems R&D Centre, which was established in 2006, we will continue to support research on new technology for electric vehicles.
Another homegrown success story is the "smartcard" technology. Most Hong Kongers don't leave home without a smartcard in their pockets. Smart ID cards and Octopus cards have become part of everyday life in our fast-paced city.
I use this example because it shows how innovation evolves and how good ideas can reach a global audience.
The technology for the Octopus card was conceived in Australia, and it was launched here in 1997 as an efficient payment method on our metro system, the MTR. It was one of the early breakthroughs for Radio Frequency Identification, or RFID, technology, which is, in fact, one of the many MIT made gadgets that was created more than half a century ago without any specific application.
Today, Octopus cards in Hong Kong can be used in shops, restaurants and car parks as well as on public transport. The technology is used for property management and school administration. It is fast, efficient, safe and reliable.
There are some 18 million Octopus cards in circulation here in Hong Kong. That means two and a half cards for every man, woman and child. People around the world are beginning to recognise the power of the technology, and the application of this technology making good use of our systems and software has been emulated successfully around the world, including London, the Netherlands and Dubai.
With a proven track record, RFID technology has expanded and created opportunities for local small and medium enterprises. A company under Hong Kong Science Park's incubation programme has successfully developed an RFID Jewellery Management System. Here the technology is used to enhance operational efficiency in stock taking, and is said to save up to 90% of processing time. It is effective in inventory control and has help improve anti-counterfeit operations.
We look forward to promoting the smartcard technology at the World Expo in Shanghai next year. The theme of our exhibition is "Smart Card, Smart City, Smart Life".
Efficiency is a theme taken up by a number of start-up companies funded by the Government's Innovation and Technology Fund, or ITF. These companies have developed a wide range of products. They include cost-effective micro-controllers used in consumer electronics products, facial recognition technologies in remote surveillance systems and web-based community software.
A number of these companies have achieved national recognition, attracted third party follow-on investments, and even listed in the Growth Enterprise Market of the Hong Kong Stock Exchange.
As a small economy with no natural resources, Hong Kong is heavily reliant on creative industries and, by extension, on the creativity of our people.
Our task now is to effectively interlock our creative industries and establish Hong Kong as a significant creative economy. Currently, we have about 32,000 creative industry-related establishments that contribute more than $60 billion to our GDP annually.
Looking at the big picture, the Government has a role in attracting and retaining high-quality talent, and ensuring that they have the freedom and incentive to think out-of-the-box, and report and exchange ideas without restriction. At the same time, innovators should feel secure that their intellectual property is well protected here in Hong Kong, and that there is good potential to market their ideas.
The Government places a high priority on providing a favourable environment for the development of high value-added and high technology industries.
Since its launch in 1999, the ITF has supported close to 1,300 applied R&D projects carried out by universities, research institutes and industry. Total approved funding is in the region of about $4 billion in different technology areas. This includes about $300 million specifically targeted at helping smaller firms to achieve technological advancement.
In parallel, we have taken steps to establish a technology infrastructure comprising two main areas.
These bodies act as a bridge between academia and industry, and develop technologies that are in demand by industry. In particular, the R&D centre has been seeking greater collaboration with industry. They have kick-started around 180 R&D projects with a total approved funding of over $870 million in areas regarded as having high market potential.
The second part of our infrastructural support is to provide purpose-built premises. Among these are the Hong Kong Science Park in the New Territories and the Cyberport on Hong Kong Island.
These facilities provide affordable office and research space and shared laboratory and support services. This helps start-ups overcome the high-cost entry barriers into specific technology fields. These facilities also provide incubation programmes for technology start-ups to nurture their business skills, grow their markets and attract investors.
Currently, there are more than 250 overseas and local technology companies at the Science Park and about 60 IT companies at Cyberport. This clustering effect has allowed companies to develop relationships both within and across technology sectors.
My next point is a unique, exciting and vitally important area for us - "borderless innovation" between Hong Kong and the Mainland of China.
The "Shenzhen - Hong Kong Innovation Circle", which was launched in 2007, is self-explanatory. It is a collaborative initiative between Shenzhen and Hong Kong to make the most of the advantages of both places on the promotion of innovation.
Earlier this month, US firm DuPont opened a major Solar Energy Research and Industrial Platform at the Hong Kong Science Park. At the same time, its manufacturing facilities have been set up just across the boundary in Shenzhen. This is the first major technology project under the "Shenzhen-Hong Kong Innovation Circle" framework.
In addition, the landmark arrangement with DuPont has attracted other solar energy research institutes to apply for admission to the Science Park. DuPont has also started collaboration with the Nano and Advanced Materials Institute, another one of the five R&D Centres set up by Government that I mentioned a little earlier.
We expect that these activities will bring about a clustering effect, and gradually develop a solar energy technology value chain here. That would serve the dual purpose of improving our air quality and building a green economy in Hong Kong.
My final point is about developing talent. Under the Innovation and Technology Fund, we aim to create more job opportunities for R&D personnel and interns. This is in addition to providing funding to the technology start-ups. We have relaxed the criteria for the Fund's Internship Programme to enable more people to participate in the projects. We have also raised the grant ceiling for each project under the Small Entrepreneur Research Assistance Programme. The grant ceiling has been doubled to $4 million, to enhance the competitiveness of our enterprises in doing product and service research.
Ladies and gentlemen, I have covered some of the key aspects of the Government's strategy towards encouraging innovation and building a creative economy.
We have world-class facilities and services, various funding schemes and a city that thrives on efficiency and new ideas. Our location on the Southern tip of China and integration with the Mainland offers significant advantages in terms of accessing markets, resources and talent.
I believe that we are on the right track, and - with your continued support and input - we can all look forward to an even more creative and more innovative future for our city.
Thank you.
Ends/Tuesday, March 31, 2009
Issued at HKT 14:19
NNNN
Windows Media format
Real Media format