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From the Chairman
Inside Legco
From the CEO
Cover Story
Hong Kong:
The Trilingual City?
Language Learning: An Investment in
Your Future
Bigger is Better
O'Rear's View
Fading Hope for Fiscal Responsibility
China Economic Update
China
Tax Reforms Underway
Business
Trends
PRD Patriot's Paradox
Goods & Services Tax
Made Simple
Goodway
Electrical onto a Good Thing
Chamber Programmes
Hong Kong's Silver Lining
First Zero Tariff Shipment Under CEPA
by HKGCC Member
Hong Kong Service
Suppliers Q&A
Chamber Visits MTR's
Nerve Centre
Chamber Programmes
Building a Career in the PRD
2003 Hong Kong Award for Services: Innovation
Chamber in Action
CHAMBER PROGRAMMES
February
2004 Issue  Chamber Programmes Innovation and Technology Developing a Strategic Framework
Dr Anthony Wong, Innovation and Technology
Commissioner, explained at the Chamber's January 14 roundtable luncheon that part of the
problem lies in the long-term nature of research and development. But to pinpoint
problems, his commission recently conducted a survey which revealed several areas of
concern. "Few results have been seen from the HK$5
billion Innovation and Technology Fund, which is partly because we allowed universities to
drive the focus of the research," he said. "As a result, the research that has
been done has been very fragmented and not that applicable to businesses' needs." To address this and other issues, the
Innovation and Technology Commission (ITC) is collecting views on how the fund can be
better used. ITC's new strategy is to have universities collaborating on research projects
which will focus on enhancing Hong Kong's leading foundation industries, such as textiles,
watch and clock manufacturing, and jewellery sectors -- industries that are dependent on
OEM orders. Dr Wong warns that without investing in
research and development to make these sectors more efficient and innovative, developing
economies such as Indonesia, Malaysia, and Vietnam will soon have the expertise take Hong
Kong's in OEM orders with their lower labour costs. Universities in the past have also tended to
first develop a technology and then try to sell it to businesses. Instead of putting the
cart before the horse, Dr Wong says research will have to be more market driven. "A lot of research is still not relevant
to industries' needs," Dr Wong said. "Our new strategy will be to use more of a
market-demand approach to see what kinds of technologies industries want and then try to
develop solutions for them." The Guangdong Government is already
co-operating with businesses to find out what technologies factories need to increase
their efficiency, move up the value chain, and reduce their dependence on OEM orders. Hong
Kong has a leading role to play in this development. With 60,000 factories in the PRD just
a two-hour drive from Hong Kong, he believes that the territory can become a research hub
for businesses operating in the region. But will the Mainland's cheap labour and land
advantage over Hong Kong suck research and development out of the territory as it has done
with manufacturing? Dr Wong said this argument becomes void the higher up the value chain
you go. To attract the best researchers from around the
world you have to pay top salaries, he said. So the fact that you are in Shanghai, Los
Angeles or Hong Kong becomes irrelevant. Moreover, because research centres do not require
large amounts of land or labour, basic costs become less of an issue. "Intellectual property protection in Hong Kong is also better than in the Mainland, which is an issue that companies place great importance on," he said. "In addition, we also have a good living and research environment, factors that are important if we are to attract top researchers to come and work here."
 Q & A  Slides Consumer
Confidence
The turnaround is one of the most spectacular
in Asia and the second highest for the territory on record, Dr Yuwa Hedrick-Wong, Economic
Advisor of Mastercard, said at the Chamber's January 15 roundtable luncheon. In revealing the findings of Mastercard's
Consumer Confidence Index, Dr Wong said Hongkongers are confident about employment, the
economy, stock market and quality of life, but confidence of having a regular income lags
noticeably behind at 67.4 percent. "To me, this speaks volumes about the very
flexible nature of incomes in Hong Kong," he said. "In the rest of the region,
the outlook on regular income is always one of the highest categories, yet in Hong Kong it
is one of the lowest, which shows just how flexible Hong Kong can be." For Hong Kong to continue moving forward, the
territory has to create more value and expand its knowledge intensity. He doesn't believe
that high property prices in the territory are a problem, because wide variations are
found in all economies, and even calls wide price differences healthy. Closer integration with the Mainland is also
driving the economy forward, but Dr Wong warns Hong Kong must not forget that it has to
differentiate itself from the Mainland. "Hong Kong must become precisely what
China is not. Hong Kong should stay close to China, but it does not mean that Hong Kong
has to become like China. If it does, then it cannot add any value to China," he
said. "That is a subtle, but important distinction that we must not forget." For 2004, Dr Wong forecasts that real GDP
growth for Hong Kong will reach 6.8 percent, while the Mainland will break into double
digit growth at 9-10 percent. He also
predicts that the travel and retail sectors will come into their own this year, with
Mainland arrivals to Hong Kong expected to spearhead this growth.
Q & A Slides  Webcasting
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Mr Wong's Speech
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