Hong Kong Information Infrastructure Expo & Conference 1999
Keynote Address by Mr K C Kwong
Secretary for Information Technology and Broadcasting
Hong Kong's Innovation - Strategy for Growth
4 March 1999
Mr Sze, distinguished guests, ladies & gentlemen,
I am honoured to have the opportunity to address such a distinguished audience today. And I do this speech with some trepidation as I had listened with much interest to the insightful remarks and addresses made by Doctor Fung, Vice Minister Zhou, Senator Alston and Deputy Minister Lynch and other distinguished speakers in the Conference this morning. Like many of you, I also had a chance to tour the II Expo just before lunch and had a quick look at some of the products and services presented by the participants. They are a vivid demonstration of the application of innovative ideas and concepts by the participants in order to stay in the forefront of an increasingly competitive world. They also underline the fact that innovation is the only sure way to continued growth in the Information Age.
And Governments have a key role to play in providing a favourable environment to nurture innovation, and to allow it to flourish in the community. But what exactly should we do to provide that environment? How do we encourage and help our businesses to take an active part in the innovation process and to benefit from it? How should we prepare and involve the community? In a nutshell, what should our strategy be?
In Hong Kong, our answer lies in the "Digital 21" Information Technology Strategy which we announced late last year. The primary objective of that strategy is to enhance and promote our information infrastructure and services so as to make Hong Kong a leading digital city in the globally connected world.
There are four key components in the "Digital 21" Strategy.
First, the development of high capacity telecommunications networks. This is of crucial importance as such networks provide the arteries through which digital information flows. Hong Kong now has one of the most advanced telecommunications infrastructure in the world. We have four local fixed telecommunications network service operators with fully digitised networks. Nearly 400,000 km of optical fibre has been laid. Our broadband network covers practically all commercial buildings and some 58% of all households. The latter coverage is projected to reach 80% by the end of this year.
Our mobile telephone penetration rate, at 40 %-plus, is the highest in the world outside Scandinavia. All these developments have been fostered by a transparent and open regulatory regime which provides a level playing field for telecommunications operators while protecting consumers' interests.
But we are not complacent. We are going ahead with the further liberalisation of the telecommunications market. Since 1 January this year, licences for external telecommunications services have been made freely available on demand. As a direct result, we now have better quality and more varied IDD services. But more importantly, IDD rates have been driven down substantially. For example, IDD calls to the USA and Canada have been reduced roughly by half.
The second component of our Digital 21 Strategy is the development of an information infrastructure with an open and common interface, through which individuals, businesses and the government can interact easily and securely. We in the Government will provide the lead by launching the Electronic Service Delivery scheme or ESD as we call it. ESD will provide public services online to the community over the Internet and through other electronic means of access. The first phase of ESD will cover the services of ten departments and public agencies and we are aiming to have it up and running in the latter half of 2000. We have just called tenders for the design, setting up and operation of this phase of ESD. The tenders will close on 9 April.
We will allow the ESD platform to be used for the conduct of electronic transactions in the private sector as well. This would facilitate the development of electronic commerce in Hong Kong.
In support of the ESD initiative, we will establish a local public key infrastructure and a public certification authority, and draw up a clear legal framework for electronic transactions. These measures will help to ensure that the public can feel comfortable about the security, integrity and reliability of electronic transactions.
The third component of our Digital 21 Strategy is to ensure that our people know how to use information technology. An important initiative in this component is to equip our students with IT knowledge and skills so that they become better in their approach to problems, in the pursuit of their creative ideas, as well as in their abilities to seek, analyse and present information. To this end, we will spend over HK$3.2 billion in capital expenditure and over HK$550 million annually in the next five years to provide IT equipment to schools, train school teachers, develop curriculum and build up resource support for schools.
In addition, we will provide over $170 million to improve IT training in vocational education. We will upgrade the IT infrastructure of the technical colleges and institutes under the Vocational Training Council, which provide technical and craftsmen training on information systems, software engineering, etc. Shortly, students will be able to assess course material via the Internet from anywhere in the campus or from their homes.
Our universities are also working hard to stay in the forefront of IT development. And their efforts are bearing fruit. For example, the University of Hong Kong has recently set up the first authorised Java Campus in the world which offers training in Java technology to the university's students as well as business executives and IT practitioners. The Chinese University of Hong Kong, together with other tertiary institutions, has embarked on the Hong Kong Cyber Campus project which will link up all universities, secondary and primary schools as well as kindergartens in Hong Kong. The project will allow teachers, students and the community to interact online and to obtain and share educational resources.
The fourth component of our Digital 21 Strategy is the development of Hong Kong into an Internet hub in the Asia-Pacific region. The global Internet boom has given rise to a whole new industry of Internet service providers, web-page designers, Internet shopping services and so on. Recent industry estimates suggest that, if we count the building of web sites and construction of information highway, as well as the selling of goods and services online altogether, the total value of business on the Internet will reach US$1 trillion by 2002, or 2% of the world economy. In Hong Kong, we now have more than 1 million Internet users, and over 130 Internet service provider. And we are poised to take advantage of these fast growing business opportunities.
With our excellent telecommunications networks and our creative use of IT, we have the potential to develop Hong Kong into an Internet traffic and content hub, and supply Internet services and content to the rest of the world. Also, given our unique position as a special administrative region of China and our bilingual capability, we can serve as a digital intermediary for those wanting to do business with the Mainland of China. We are now working with our universities and trade and industrial organisations to develop Internet-based applications and content which would leverage on these advantages of ours.
In support of the above strategies, we will also stimulate research and development in the private sector so that innovative ideas and concepts can be transformed into generic technologies for commercial applications. We will set up a HK$5 billion Innovation and Technology Fund to finance projects which will contribute to innovation and technological upgrading of our manufacturing and service industries, and we will establish an Applied Science and Technology Research Institute to support and stimulate mid-stream research.
Distinguished guests, ladies and gentlemen. I have just outlined the key features of our "Digital 21" Strategy. And there are encouraging signs that the business community has cast a clear vote of confidence in our strategy. Let me give you one example.
Yesterday, the Financial Secretary announced in his Budget Speech that we will launch the Cyberport project, a project aimed at providing a specially designed environment for the development of leading edge IT applications and services. A leading information services company in the private sector has agreed in principle to partner with the Government to develop this project, which is estimated to cost US$1.6 billion. The Cyberport will cater not just for the needs of multinational corporations. It will also cater for the needs of smaller local companies through the provision of shared facilities in the Cyberport, such as multi-media laboratories and broadband telecommunication infrastructure. Also, the local companies should benefit from the closer contact and exchange of ideas with the multi-nationals. A fair number of leading multi-national companies in the IT field have already expressed their interest to become anchor tenants at the Cyberport.
This is a clear sign of endorsement of our strategy.
To conclude, we must have a clear strategy for responding to the new challenges of the Information Age. We in Hong Kong have formulated our Digital 21 Strategy, and it is one which will embrace innovation and technology to drive our economic growth. And this is how we are preparing ourselves to take on a leading role in the Information Age.