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Speech by FS at CAE-HKAES Joint Summit on Innovation & Technology Industry in HK and the PRD (English only) (with photo/video)

     Following is the speech by the Financial Secretary, Mr John C Tsang, at the Chinese Academy of Engineers-Hong Kong Academy of Engineering Sciences (CAE-HKAES) Joint Summit on Innovation & Technology Industry in Hong Kong and the Pearl River Delta this morning (April 13):

Tim (Professor Timothy Tong), Professor Choi (Yu Leuk), (Vice) Minister Hou (Jianguo), Professor Zhou (Ji), Victor (Dr Victor Fung ), ladies and gentlemen,

     Good morning.

     It is indeed my great pleasure to join you all today for the opening ceremony of the Joint Summit on Innovation and Technology Industry in Hong Kong and the Pearl River Delta. My thanks to the Hong Kong Academy of Engineering Sciences and the Chinese Academy of Engineers for organising this seminal, two-day event. My thanks, as well, to the Hong Kong Polytechnic University for being such a gracious and efficient host.

     "If you always do what you always did, you will always get what you always got." You have to admire Albert Einstein's way with words. Indeed, I would say that with those few words, he has neatly summed up why we are here today. Why innovation and technology are so important. Yes, to get to the future that we all want, we need to do more than what we are doing today. That's certainly true when it comes to innovative technology.   

     Of course, that truism hasn't gone entirely unnoticed. Not when three of the five public corporations with the world's largest capitalisation are technology companies. I am talking, of course, about Apple, Google and Microsoft.

     Technological advances are fast changing the way that we live and we do business. Online shopping, for example, has never been easier. Just look at Alibaba, Amazon, eBay, and the like. They are disrupting the conventional ways of distributing and selling goods.

     Communication also has never been more convenient - and not just in buying and selling goods either. Social media has become part of our daily life. An integral part of our personal as well as our professional life. TV broadcasting, video-conferencing, even interactive university courses over the Internet are getting more and more popular.

     I have been communicating weekly with the Hong Kong community through a blog since I became Financial Secretary in July 2007. And, recently, I opened an account on Facebook to better communicate with the public about the Budget and about the work of my office. Well, a bit late, I must admit. But you will forgive me because I am over 30.

     Beyond social media, economies around the world are looking to I&T for that crucial competitive edge.  Here in Hong Kong, industries are harnessing I&T to obvious benefit. The use of RFID and GPS in the logistics sector, for example, has served to enhance efficiency of logistics flow. Octopus, a home-grown RFID-based system, is now one of the world's leading smart-card payment systems. In fact, with our population growth slowing down over the past decade, about two-thirds of our GDP growth has been powered by productivity enhancement, much of which has been realised through I&T.

     In the Mainland's 12th Five-Year Plan, seven strategic emerging industries have been targeted: environmental protection, information technology, biology, high-end equipment manufacturing, new energy, new materials and new-energy automobiles. The point, of course, is to accelerate development - to push for breakthroughs - in these critical areas for economic growth.

     In Hong Kong, our goal is to nurture a knowledge-based economy, to make Hong Kong an innovation hub.  We have been doing this in an organic and sustainable manner. We expanded our tertiary education sector back in the 1990s, enabling more young people to receive higher education. Since then, we've been gradually building up local research capabilities, attracting world-class scholars to join our faculties here. They have mentored young researchers, producing top-notch research results in a number of areas. In a recent assessment by UGC, 12 per cent of the research submissions made by our universities were judged to be of "world-leading" standard by international experts. And 34 per cent attained the "international excellence" standard.

     In recent years, we have been encouraging technology transfer and the commercialisation of research results. There are, to be sure, a few potholes on the road to innovation. In Hong Kong, private sector investment accounts for only 45 per cent of total R&D expenditure. Compared with the corresponding figure of some 70 per cent in other developed economies, you will understand when I say we still have some work to do here.

     The Government has strengthened its financial support for Hong Kong companies through the Innovation and Technology Fund. This will help firms conduct R&D activities. We are also relaxing some of the scheme's restrictions and requirements to make it as user-friendly as we can.

     As Financial Secretary, one of my key responsibilities is to sustain a favourable business environment. Hong Kong's simple and low tax system, acclaimed capital raising and financial services strengths, commitment to effective intellectual property protection and sound legal system are our trump cards - in business and, no less, in the business of technology and innovation.
     We are also blessed with singular geographical advantages. Our location has enabled us to become the key platform between the Mainland and the world in technological collaboration and trading. Situated at the heart of Asia - within five hours' flying time of half of the world's population - is another advantage. For technology companies looking to tap into Asia's huge market potential, we are the most convenient base, one with untrammeled 21st century communications and logistics infrastructure.

     That's why many multinational technology companies have set up their bases here. And the Government will continue to promote Hong Kong as an innovation hub. We shall continue to provide world-class technology infrastructure for companies, research institutions and universities. Continue to nurture talent, to strengthen collaboration with the Mainland and other science and technology centres. Continue, in short, to give rise to a dynamic culture of innovation here in Hong Kong.

     That will also mean embracing the development of technology start-ups - with fresh young troops specialised in I&T. Their potential should not be underestimated. Facebook is a classic example. Launched a little more than 10 years ago, it is today one of the most visited sites in the world. With sound technological and financial support, as well as management and marketing advice, and perhaps a little luck as well, some of our technology start-ups have made their own global statements. And more will do so.

     Hong Kong certainly has an abundant supply of talent - people with the passion, ambition and knowledge to shape the future. About 34,000 students were enrolled in UGC-funded programmes in the science, engineering and technology disciplines in the 2013-14 academic year. That represents about one third of our total enrolment. In short, we have the foundation in place for a start-up technology boom.

     Of course, start-ups require sufficient financing to keep them going and keep them growing. This requires private sector investment. My Budget announced the setting up of a Corporate Venture Fund by the Hong Kong Science and Technology Parks Corporation. Through the Fund, Science Park will invest in start-ups located in the Park or with those that have participated in its incubation programmes - on a matching basis with private funds. I hope this Fund, this approach, will help spur more private funding in our local I&T system. If it works well, I am prepared to expand this funding approach to give our start-up community even greater support.

     Over the years, Science Park and Cyberport have nurtured many fledgling technology companies, providing them with affordable working space, as well as an inspiring and user-friendly environment.  

     We have also seen an upsurge in private incubators, accelerators and shared working spaces in Hong Kong recently. These also offer valuable networking opportunities for technology start-ups. They build connections with potential investors, with business professionals for advice and training, with seasoned entrepreneurs for mentoring, and with industrialists for fresh opportunities.

     I am pleased to note that our efforts in supporting technology start-ups are starting to yield fruit. A recent InvestHK survey revealed that there were more than 1,000 start-ups in 23 working spaces and four incubators in Hong Kong. That's up 30 per cent over 2013 totals.  Certainly, an encouraging increase - and, trend, too, I trust.

     We are also providing technology start-ups with enhanced software and hardware support. Science Park, for example, is extending the Leading Enterprises Acceleration Programme to help companies with business potential raise capital and improve their management.  

     Ladies and gentlemen, I wish you all a successful Summit over these two days. And I look forward to your continuing help in creating a rewarding I&T future for Hong Kong. For all of us.

     Thank you very much.

Ends/Monday, April 13, 2015
Issued at HKT 11:17


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