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Hong Kong Business Summit '99
"Hong Kong, China: Into the Next Millennium"

December 2, 1999

"Communications Technology and Hong Kong"

Speech by Gareth C.C. Chang Chairman and Chief Executive of STAR TV

Ladies and gentlemen, since I started thinking about what to say today around one month ago, two things have happened which sends across a very powerful message to me ... and most of you here today.

First, my company Star TV forged a momentous alliance with Cable & Wireless HKT that will create the first truly interactive multimedia service in Hong Kong. Then, two weeks ago, China and the United States concluded a far-reaching agreement that paves the way for China to enter the World Trade Organisation.

These two events, I suggest, send us strong signals about the kind of world we're moving into as the new millennium begins. It's a world in which traditional differences among media are disappearing as technologies converge.

It is a world in which technology-driven innovations stimulate the creation of many new businesses, while eliminating traditional ones, changing the competitive landscape at a lightning speed.

It's also a world in which national boundaries restricting trade are disappearing under the relentless pressure of global competition and market access.

Since I'm in the TV business, let's watch some TV!

Ladies and gentlemen, that's a quick snapshot of the evolution of multimedia. In fact, we already live in a well-connected multimedia world ... although it's taken us about a century to get to where we are today.

A hundred years ago, we didn't have the Internet or cell phones. But we did have telegraph and telephone networks for instant communication virtually around the world ... thanks to the invention of Morse code and the microphone.

We didn't have television, but we did have motion pictures ... thanks to the invention of celluloid film and the moving camera. We didn't have Web portals, but we had newspapers bringing us nearly instant news, thanks to the inventions of paper and printing.

We didn't have computers, but we had the abacus and slide rules. All these technological marvels tell us two things. Technology has become an integral part of our lives, enhancing the way we communicate and acquire information.

Technology has also given entrepreneurs the opportunity to come up with innovative business ideas.

That's the same today as in the past century. Take the internet as an example. We're all fully aware that the internet has become very popular because it offers a very affordable means to distribute digital content to anyone who has access to the Net.

The Internet has until now been mainly linked to the PC world because of its computing power. But there is nothing inherent in the Internet that says you must have a PC to use it. In fact, you can hook just about anything up to the Net as long as you follow the internet protocols.

For all we know, we may even "forget" about the internet in a few years, like what has happened to the one-time buzzword - information superhighway.

With the acceleration of technologies, the internet will be embedded into many communication devices and become an integral part of our daily lives. So no one will talk about it any more.

The convergence of digital technologies has given us total interconnectivity - in other words, a worldwide distribution network. With this technology convergence, TV broadcasters can now deliver hundreds of channels and thousands of programs to millions of families in Asia via satellite or cable.

Likewise, any websites can do something similar if there is available bandwidth.

This convergence has also enabled us to develop an interactive extension of television that will transform the way our consumers select and receive information and entertainment ... putting them in the driving seat.

In my opinion, it is only a matter of time before television becomes the primary platform for delivery of online services to the home, especially in Asia. Why? TVs are more widespread and PCs are still a luxury for most people in Asia. That is why Microsoft is so busy buying into cable systems everywhere.

Bill Gates isn't interested in selling you old movies. He wants to control the digital box in your home. That set-top box is going to become the gateway for all the future battles over "content" - meaning all the digital services that can be channeled into your home - entertainment, commerce, communication, news and education.

Ladies and gentlemen, we have entered a new media world and we are on the verge of a "content" explosion. As interactive television takes off, the demand for content will soar and the development of content will accelerate at a lightning speed.

To put it simply, content is King! In fact, this content explosion enables us to achieve what I call "parity" with the Western media.

What do I mean by "parity"? I am talking about offering audiences ... at home as well as overseas ... attractive Asian content on grounds of quality and relevance to their professions, lifestyles and intellectual curiosity.

Take the Hong Kong film industry as an example. It has been all but eclipsed due to a lack of quality local production. Pirated VCD's and too few movie theatres have just rubbed salt into the wound.

Yet another example! News programmes produced in Asia are not interesting or relevant enough for Western audiences, lacking the breadth and depth that would have any impact on a regional or global basis.

Of course, it is only fair to say that a few Hong Kong movies have made it to Hollywood. But in order for the Western world to understand us, we need to have parity in movies, news, music, sitcoms, etc. In other words, I??m talking about cultural and media parity.

All these add up to a very significant opportunity for creative content. It could be the saviour of the Hong Kong film and entertainment industry. We have the opportunity to rebuild our entertainment industry, partly because of the Walt Disney project and others we hope will follow.

Hong Kong has the infrastructure ... and the technology ... to become a world leader in content development. Innovators can now enter the market without the barrier of high entry cost.

I applaud all the recent government initiatives in promoting innovation and technology ... improving the environment and turning Hong Kong into a world-class city ... etc.

However, a Cyperport and a Silicon Harbour are not enough. Hong Kong needs to create an environment that allows for many Cyberports, Silicon Harbours and other innovative ventures to transform Hong Kong's economic model ... from real estate to high value-added products and services.

To achieve that, I believe we must tackle what I call "creativity deficit" as a matter of urgency. Luckily, Hong Kong needs no lessons in innovation. Business innovation has always been one of Hong Kong's greatest strengths ... sometimes under the most adverse conditions.

It is my firm belief that Hong Kong should focus on innovation-driven economic development ... nurturing a thinking workforce, adopting innovative business practices and raising productivity.

It should also improve its education system to align with the direction businesses are heading for in the future. But that is not enough. Hong Kong must have its eyes set on a bigger market.

Hong Kong itself is a small market. If you think about the role Hong Kong can play in China, in Asia and internationally, Hong Kong has a lot to offer.

Hong Kong should continue to play the role of an honest broker between China and the West and focus on value-added businesses that neither China nor the West can do it alone.

Perhaps then Hong Kong one day will become a virtual global business hub.But in terms of what exactly will happen, that's our challenge as we look forward to the future.

Thank You!