The following is the speech (Translation) by the Chief Executive, Mr Tung Chee Hwa, at the "Innovation and Technology: Experience Sharing Forum" today (November 5):
President Chan, Chairman Lo, ladies and gentlemen,
It gives me great pleasure to be invited to the "Innovation and Technology: Experience Sharing Forum" today.
In face of globalisation and the rapidly changing technological landscape, Hong Kong must harness the potentials of innovation and technology to enhance our competitiveness and the quality of our services so as to stay ahead. This is even more crucial with the growing competition as a result of the opening up of the Mainland market and Hong Kong's high-cost structure. In a nutshell, Hong Kong must move up the value-added ladder as a knowledge-based economy.
Since I assumed office, I have repeatedly emphasised that to ensure the success of Hong Kong's economic restructuring, we have to achieve three tasks: first, to upgrade our education and manpower training; second, to promote the development of innovation and technology; and third, to create an enabling environment for innovation and adoption of information technology.
The key ingredient for being competitive in a knowledge-based economy is human capital. We must push ahead with the education reforms in primary and secondary schools to enable every student to enjoy learning and be creative. At the tertiary level, we must strive to catch up with other advanced economies by doubling the number of secondary school leavers receiving tertiary education from 30% to 60% within ten years. Over the past few years, despite tight government finances caused by the financial crisis, we have continuously increased our investment in education. Funding has surged from $37.9 billion in 1996-1997 to $55.3 billion in 2001-2002, a 46% increase over five years. I also announced in my Policy Address this year that $5 billion will be set aside to subsidise those with aspirations to pursue continuing education and training programmes so that everyone can get on board the train of the New Economy.
We have introduced a series of initiatives to foster the development of innovation and technology in Hong Kong since our return to China. We have set up a $5 billion Innovation and Technology Fund to subsidise research on applied technologies for greater technological advancement. A complementary $750 million Applied Research Fund has also been set up for scientific research projects with commercial potential. We have established the Hong Kong Applied Science and Technology Research Institute Company Limited and its subsidiary, the Hong Kong Jockey Club Institute of Chinese Medicine Limited, to facilitate the technological upgrading of such local industries as IT, electronics, wireless data communications and Chinese medicine. We support the "incubation" programme to promote technological entrepreneurship in Hong Kong. In addition, the Science Park Phase One under construction in Sha Tin will be completed and begin operation by the first quarter of 2002 to provide supporting facilities to local and overseas companies for their research and development activities. The Cyberport project is also making good progress. Upon its completion by phase between early 2002 and late 2003, it will gather a cluster of local and overseas IT businesses, encouraging interflow and innovation. On the recommendation of the Small and Medium Enterprises Committee, I announced in my Policy Address this year the setting up of four funds amounting to $1.9 billion to help SMEs boost training, open up markets, implement projects and programmes to lift competitiveness and purchase business equipment and appliances with credit guarantees from the Government.
As to the creation of an enabling environment for the adoption of information technology, we announced our "Digital 21" Information Technology Strategy in May 2001 with an aim to establish Hong Kong's position as a leading e-commerce community as well as a cyber city. As to the development of an e-government, Hong Kong has been awarded the prestigious Stockholm Challenge Award 2001 for our Electronic Service Delivery Scheme. This reflects our commitment to and our success in the delivery of friendly and efficient electronic services to the public.
The success of our efforts in promoting the development of innovation and technology are not measured in terms of the number of "dotcom" companies or their market values. It hinges upon the innovation of the Hong Kong people and their readiness to adopt information technology to improve life quality. It is also based on the innovation of our businesses and their readiness to adopt information technology to enhance their productivity and the quality of their goods and services. In short, it depends on whether our community can harness the power of innovation and technology to create new economic activities and to drive our economy to grow further.
I am pleased that the efforts we put in over the last four years or so are beginning to bear fruit. PC ownership among Hong Kong households has increased from 35% in 1998 to the present 61%. For the respective periods, internet access rate has also jumped from 12% to nearly 50%, the broadband network home coverage rate from less than 50% to 95%, and the number of electronic cash smart cards from 4.8 million to over 7.8 million. Different companies are introducing an increasing variety of new electronic services. Compared with the use of information technology in other advanced economies in Asia, Hong Kong stands at the forefront in terms of application and popularity. In the past few years, we have witnessed the success of many companies. They have started up new businesses or improved product quality in various areas by capitalizing on innovation and technology.
For the corporate participants of today's forum, each has its remarkable story in innovation and technology. Among them is the TeleEye Holdings Limited, which had only four staff members when it was first set up. They were all scientific researchers from universities. After joining the government-supported Technology-based Business Incubation Programme, their company became the first from a university in Hong Kong to be listed on the Growth Enterprise Market in the middle of this year. TeleEye's products are now exported to 25 places around the world. InfoTalk Corporation, another company that develops the multi-lingual speech recognition system, had only a few staff members and no users when it joined the Technology-based Business Incubation Programme. When the Programme was completed in 1999, the company had 100 000 users. Boosted further by an injection from the Government's Applied Research Fund, it has by now grown to about 120 staff members and 1 million users. Centro Digital Enterprises Ltd. is another example from the participants today. Its digital entertainment and computer animation technologies have reached state-of-the-art level within a span of several years. These are all accomplishments we are proud of. They bear testimony to the capability of Hong Kong, in terms of both manpower and creativity, to take advantage of innovation and technology to give impetus to our economic restructuring. We need to encourage people with creative talents to actively turn their worthy concepts into business endeavours. Through the Innovation and Technology Fund, the Government will work in collaboration with the Hong Kong Science and Technology Parks Corporation and the universities to support more technology-based business incubation programmes.
In light of the experience of the US economy and that of other regions, we can see that economic restructuring would take many years to complete. As long as the entire community and our enterprises recognize the importance of economic restructuring and innovation and technology, strive to upgrade our skills and have the courage to make innovations, we firmly believe that we can break new grounds for Hong Kong and create a new and stronger driving force for our economy. The success of our economic restructuring will hinge on the application of innovation and technology by our business community and individuals to pursue high value-added activities. From some of the successful examples of the companies here today, we can see that although there is still a long way to go if we are to build up and foster a culture of innovation and technology within our society, we have already made a good start. We are confident that we will attain our goals. At last, I would like to call on our local entrepreneurs to share more of your successful experiences in enhancing the competitive edge of your enterprises through innovation and technology with members of the trade. This will not only enable all of us to share the fruits brought by the New Economy but also lead the entire community towards the objective of "New Technology and New World".
End/Monday, November 5, 2001