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LCQ5: Development of innovation and technology industry
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     Following is a question by the Hon Martin Liao and a written reply by the Secretary for Innovation and Technology, Mr Nicholas W Yang, in the Legislative Council today (February 17):

Question:

     While the Hong Kong Government's direction of committing itself to the development of innovation and technology has gained recognition in society, there are queries that the local legislation has not kept pace with the new emerging innovative business models and that the Government has failed to properly address the conflicts between such business models and the inherent ones. It has been reported that some young entrepreneurs from the innovation and technology sector recently told the Chief Executive face to face that there were too many restrictions in the local legislation, which has hindered the development of the innovation and technology industry. The examples mentioned on that occasion included the development of Uber Internet car calling services, autonomous driving technology and Internet finance. The entrepreneurs concerned also expressed their hope that the Innovation and Technology Bureau could assume the role of a co-ordinator to resolve the legislation-related problems faced by them in the development of the innovation and technology industry. In this connection, will the Government inform this Council:

(1) whether the authorities know the innovation and technology projects or areas the development of which in Hong Kong was hindered as a result of legislation-related problems in the past five years; if they know, of the projects or areas concerned and the details of the hindrance to their development; the policy bureaux/government departments which handled such cases, the way they handled them and the handling results (set out such information by year);

(2) whether the authorities will take the initiative to liaise with the various stakeholders of the innovation and technology industry (including the academia, the research sector and the industry) to assess and identify the innovation and technology projects (e.g. provision of services under the innovative business models of sharing economy and micropayment) the development of which is in conflict with the existing legislation or business models; of the criteria based on which the authorities will address such conflicts; and

(3) whether the authorities will assume the role of a co-ordinator to help remove the conflicts between the local legislation and the development of the innovation and technology industry; if they will, whether the authorities will establish a specific mechanism to address such conflicts, collect the views of the industry and, when the cases involve areas under the purviews of a number of government departments, co-ordinate the joint efforts of such departments in addressing the problems concerned?

Reply:

President,

     Having consulted the relevant policy bureaux, our consolidated reply to the three parts of the question is as follows:

     The Government does not have statistical information on innovation and technology (I&T) areas the development of which in Hong Kong was hindered as a result of legislation-related issues.  However, we note that there have been some discussions in society recently on certain I&T applications, such as the application of technologies in the areas of transport and finance.

     The Government is open-minded in respect of the application of new technologies in the area of transport, including the use of mobile applications for calling vehicles for hire or reward.  However, all services operated on different technologies or platforms must be lawful and most importantly, have regard to the interest and safety of passengers. Under the current law, car owners (including individuals or companies) interested in using their private cars for carriage of passengers for hire or reward may apply for a hire car permit in respect of the private car to legally provide hire car service.

     To address the community's demand for diversified point-to-point personalised services, the Transport and Housing Bureau and Transport Department are studying the introduction of premium taxi service under the Public Transport Strategy Study with a view to providing the public an alternative other than ordinary taxis.

     As regards financial services, the Government notes that the application of financial technologies (Fintech) is wide and has far-reaching impacts on the industry's long-term development.  As one of the world's most important international financial centres, Hong Kong has immense potential to develop Fintech.  Fintech development requires an ecosystem conducive to innovation.  The Government set up a Steering Group on Fintech in April last year to study the potential of Fintech and measures required to develop Hong Kong into a Fintech hub in collaboration with the industry, research institutes, and the regulatory authorities.  We will continue to work closely with all stakeholders to look into measures to promote the development of Fintech.  The Government and regulatory authorities will strike a reasonable balance between regulation and promotion of Fintech development, and strive to enhance the competitiveness of the financial services industry.

     In fact, we note that certain I&T projects, such as hire car "sharing" services, have brought about controversies around the world.  As these I&T projects often require adjustments of the existing ecosystems, involving a number of stakeholders and having extensive and far-reaching implications, governments and regulatory authorities worldwide are still studying these complex matters and have yet to come up with a unified solution.  The relevant policy bureaux will make reference to the developments and experiences in other regions in handling these matters, taking into account the actual situation and needs of Hong Kong, and having regard to the interest and safety of the general public, and will consider the relevant measures at an appropriate time, so as to promote diversified economic development, and make people's living more comfortable, convenient and safe.  The rule of law is the core value of Hong Kong, and any industry, including the I&T industry, must operate in a lawful manner.

     In the process of developing I&T, the Innovation and Technology Bureau will closely work with all stakeholders in the Government, industry, academia and research sectors for better promotion and co-ordination, and will provide support and advice to relevant policy bureaux and departments from I&T perspective.

Ends/Wednesday, February 17, 2016
Issued at HKT 14:32

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