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Voice in Legco
Voice in Legco - Re-industrialization Puts Hong Kong Back on Track for Success

Can Hong Kong re-industrialize and recover lost ground through innovation? It depends on whether the current government has far-reaching vision and mind to drive the SAR’s overall development with re-industrialization momentum.

 

The HKSAR Government first talked about encouraging innovation and promoting industrial growth twenty years ago, but discussions ended without any success after two years. Hong Kong experienced great economic fluctuations since then, and efforts were made to explore development opportunities in new industries, yet nothing really provided driving force for the economy. Fortunately, Hong Kong benefited from the rapid growth of China’s national economy, and we have enjoyed economic stability to this day. However, Hong Kong has been overtaken by major Mainland cities in economic development in recent years, while developed western countries are also actively searching for new economic growth engines. Specifically, “re-industrialization” is now an important development strategy for these developed countries.

 

Advantage in upstream basic research

Looking back, the last HKSAR Government finally acknowledged the urgency to push forward re-industrialization and provide more land for industrial uses. The Committee on Innovation, Technology and Re-industrialization was formed. I hope the Steering Committee on Innovation and Technology personally led by the Chief Executive can do its utmost to advance innovation and technology development in Hong Kong. While steering inter-bureau and inter-departmental collaboration and engagement, I hope it would make constructive recommendations and policies for re-industrialization.

 

To make re-industrialization an economic engine for Hong Kong, we cannot simply retrace our steps and go back to manufacturing plastic flowers and sneakers like we did in the 1970’s and 1980’s. We should at least develop semi-automated or fully-automated industries and put the emphasis on sectors that can support our sustainable development, such as biotechnology, big data, IoT, AI, smart city and other types of highly focused, re-industrialized and high value-added manufacturing. Hong Kong has an advantage in upstream basic research. We have very high quality tertiary academic research but support is inadequate for project commercialization and industrialization. It is impossible to make products in Hong Kong based on research achievements. Instead, projects are often taken to Shenzhen, which is an expert in making prototypes for commercial products that are both in tune with consumers’ needs and economical. The current situation is highly undesirable. Can re-industrialization put Hong Kong back on track for success and break through the economic growth bottleneck of homogeneous industrial structure? The crux is how it is applied.

 

Little success in commercializing research achievements

In a report published two years ago, the Audit Commission pointed out that the rate of commercialized research achievements remained low, even for university research projects, and the number of commercialization-related research achievements was dropping. Faced with this trend, the government struck up an old tune. It continued to give us hollow words that it would work closely with the Innovation and Technology Bureau (ITB) to promote commercialization of university research achievements and knowledge transfer. Times Higher Education (THE) hits the nail right on the head. It points out that none of Hong Kong’s universities rank higher than 50 in knowledge transfer. A very embarrassing comment for the SAR Government.

 

ITB should not just talk anddo little

The success of high value-added manufacturing requires many supporting factors. The first is education. The current situation with universities mentioned above shows that changes cannot be made instantly. As for government spending on research, I have pointed out in many debates about economic development in the past that resources allocated by the government have been grossly insufficient. The Policy Address has proposed to double the percentage of total local research expenditure relative to GDP from 0.73% to 1.5% by the end of the five-year office of this current government, i.e. about $45 billion annually. Meanwhile, the budget for the new financial year includes $50 billion for innovation and technology. Such a motivated attitude deserves commendation, but it should only be a beginning. More resources must be put into this area in the future. I urge the ITB to make progress and achieve concrete results as quickly as possible. It cannot just talk and do little or delay the start-up of re-industrialization by endless consultation and discussion.

 

The success of re-industrialization is hinged on closer cooperation between Hong Kong and neighboring provinces and cities. Only by focusing on the big picture can we achieve a win-win outcome of mutual benefits. Guangdong’s innovation capacity has been growing continuously in recent years. It is now a full-fledged innovation region. Two years ago, advanced manufacturing industries accounted for about 50% of the provincial total, and research spending accounted for 2.58% of GDP. Early last year, the provincial government made it a priority to develop Guangdong into a national technology industry innovation center. It also has the acumen to focus on all-round development. A proposal was made to strengthen innovation and technology cooperation between Guangdong Province, Hong Kong and Macao. Meanwhile, Shenzhen our neighbor is also making major effort towards industrial upgrade and transformation, advancing in the direction of new high-tech industries. The city is planning to raise the percentage of research relative to GDP to 4.25% by 2020.

 

Strengthen I&T collaboration in Bay Area

As part of the Bay Area, Hong Kong has built the Hong Kong-Shenzhen Innovation and Technology Park with Shenzhen. In addition to this important innovation and technology collaboration platform, Hong Kong should seize other opportunities to work with Guangdong Province and Shenzhen. Putting our advantages in rule of law, financing, information, intellectual property protection and other areas to good use, we can participate in the future development of the Bay Area, and in turn promote commercialization of our own midstream and scientific research achievements. The Massachusetts Institute of Technology set up its first innovative node outside the US in Hong Kong earlier. That is an example of capturing development opportunities in Hong Kong and the PRD region. If the next five to ten years is a crucial time for global industrial transformation, can Hong Kong re-industrialize and recover lost ground through innovation? It depends on whether the current government has far-reaching vision and mind to drive the SAR’s overall development with re-industrialization momentum.

 

However, the ERP Pilot Scheme has failed to take off despite repeated studies, just like the distribution of tunnel traffic, on which the Government had conducted three studies. Therefore, I hope that the Government will, with the greatest determination, resolve the tunnel traffic congestion problem that has plagued the public for more than a decade.

 

This is a free translation. For the exact meaning of the article, please refer to the Chinese version.

Should you have any comments on the article, please feel free to contact Mr Martin Liao.
Address : Rm 703, Legislative Council Complex, 1 Legislative Council Road, Central, Hong Kong Tel : 2576-7121
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