Views on Science and Technology Policies

23 November, 2009

To: The Hon. Donald Tsang, GBM
Chief Executive,
Government House, Hong Kong

Dear Mr. Tsang,
Views on Science and Technology Policies


The global financial tsunami has once more exposed the weakness of Hong Kong’s over-dependence on a very limited number of sectors for her economical development. A more balanced approach that places due emphasis on Science & Technology (S&T) in stimulating economic growth is becoming obvious.

For Hong Kong, S&T advancement helps to maintain the competitiveness of many firms, irrespective and size or business sector. Meanwhile, engagement in S&T research and production also provides a good future since our educational standard in S&T subjects are obviously not low at all in global terms.

For a full-fledged knowledge economy, which Hong Kong should be moving towards, the availability of technically competent personnel in different levels of society will be a critical success factor whereby S&T is fully exploited in leveraging our competitiveness.


I. Contributions of S&T to Hong Kong’s Economic Development

1.1. In this highly competitive world, companies have to be innovative in providing both products and services in order to maintain their competitiveness. Most of these innovations have to rely on the application or the development of new technologies. There are ample examples of technology applications (notably information technology applications) to improve the operational efficiency of companies and their customer services, while other researches (remarkably optics and vision systems) could improve our railway and traffic systems and other public sector endeavours.

1.2. S&T being the core elements of innovation would help create employment opportunities both directly and indirectly. In particular, we can expect to see the creation of both high level jobs like engineers and technical managers and mid level jobs like associate professionals and technicians, if S&T is being given the due emphasis.

1.3. S&T could also help to extend/expand the value chain. Exploiting S&T is consistent with Hong Kong’s intention of developing itself to become a full-fledged knowledge economy.

1.4. There are S&T areas for which considerable potentials for development in Hong Kong is alreadythere. Growth in S&T-based industries creates the demand for other supporting industries. The following are examples of industries that have great potentials:

1.4.1. Certification and Accreditation Services for scientific tests and laboratories

1.4.2. Environmental Protection: such as development of hybrid/electric vehicles.

1.4.3. Biomedical Equipment: such as the development of testing/screening machines, micro surgery machines and implants.

1.5.SMEs with significant S&T content have particular good growth potential.

1.6. Considerable tax revenue can be generated from good S&T companies.


II. Strengths and Weaknesses of Hong Kong

2.1. We identify that the major strengths of Hong Kong are:

2.1.1. Sound rule of law in place

2.1.2. Good reputation in the protection of intellectual property right

2.1.3. Free flow of goods

2.1.4. Free flow of information/know-how

2.1.5. Free flow of capital

2.1.6. Financial infrastructure highly robust and reputable

2.1.7. Free movement of Hong Kong residents. Certainly Hong Kong residents have no problem moving in and out of Hong Kong; but more importantly, the SAR passports provide them easy and convenient access to many foreign countries. This is a significant issue as many S&T workers need to travel to the technologically advanced countries frequently and at short notice.

2.1.8. We have a team of very effective, efficient and dedicated civil servants (despite local criticisms from time to time), as compared to many other places in the world.

2.1.9. We have a very good and significant working partner in our proximity, viz. the mainland of China (in particular, the Pearl River Delta (PRD).

2.2. On the other hand, we do have some weaknesses:

2.2.1. Despite our good S&T foundation, the expansion of S&T expertise is not proceeding with sufficient momentum.

2.2.2. The current environment does not provide enough encouragement to talented students and attract them to study S&T, and for S&T students, to induce them to become truly interested in or committed to it.

2.2.3. People do not have enough confidence in the future of S&T, including parents and entrepreneurs and workers in the business sector. One of the reasons is their lack of knowledge and understanding about S&T potentials.

2.2.4. There is insufficient support to expatriate professionals. For instance: immigrant issues; the lack of support (or even the existence of hindrance) to their accompanying spouses’ employment and children’s education; and inadequate attraction to set up small high tech firms in Hong Kong. Expensive housing, and hence relatively unsatisfactory housing conditions, is another hindrance.

2.2.5. Despite Hong Kong people are essentially good at creativity, they have not developed adequate and in-depth understanding of S&T to underpin their creativity, due to insufficient encouragement, opportunities and facilities. Hence, creativity and innovativespirit do not in reality bring about a great deal of innovations.

2.2.6. There is no scheme whereby tax incentives are provided to emerging companies, and this is an area of greatest interest and assistance to SME’s.

2.2.7. There is a lack of direction for long-term S&T development.

2.3. We have opportunities:

2.3.1. Leveraging on PRC

2.3.2. HK can be developed as an innovation hub of the SE Asia region.

2.3.3. Financial turmoil gives HK an opportunity to have a rethink on taking lead via design and technology.

2.4. But there are also threats:

2.4.1. Loss of our growth / competitiveness to our neighboring counties / region / cities.

2.4.2. Uncertainty about the future sustainability of HK economic growth.


III. Some proposals from the Hong Kong Association for the Advancement of Science and Technology (HKAAST)

The HKAAST has been established for well over 20 years and serves as a forum for high level S&T personnel and others interested in S&T to interact on S&T matters. As its logo signifies, the academia, the professionals and the business community are brought together to enable the research on and production of S&T-based products and services and the conduct of related marketing and business endeavours. It has enjoyed the support of outstanding people in the field, as evidenced by the fact that all the localUniversity Presidents are our Honorary Advisors and all the locally-based Fellows of the China Academy of Science are our Honorary Fellows.

The Council of the HKAAST has recently made in-depth deliberations on the future of S&T in Hong Kong and its potential contribution to Hong Kong at this period of its critical developments.
The following views/proposals have been developed and we would like to share them with the Government:

3.1. Hong Kong should adopt, at least, to some extent, the principle of “selection and concentration”, not leaving everything to “market forces”, so that some S&T areas can be identified for major action to be taken. Accordingly, there needs to be established some mechanism for exercising the principle, so that truly valid evaluations of the value and the viability of promoting certain S&T areas can be achieved.

3.2. Closer China-HK collaboration should be promoted, in particular:

3.2.1. Closer and long-term relationship with major S&T cities on the mainland should be established, e.g. Nanjing, Chengdu, Xi’an.

3.2.2. Closer and long-term relationship with other cities which may provide good talents at both the professional and the associate professional levels should be established, e.g. Beijing, Shanghai and PRD cities.

3.3. We should nurture local talents and promote general support for S&T:

3.3.1. To expand S&T education at all levels.

3.3.2. To promote people’s awareness and appreciation that S&T does offer a good prospect in terms of employment and economic opportunities.

3.3.3. To expand specific S&T education and training opportunities, thus enhancing the future supply of professionals and associate professionals in S&T disciplines.

3.4. We should enhance the talent importation policy, thus facilitating and encouraging worldwide S&T talents from China and other countries to come to Hong Kong.

3.5. We should attract foreign investors by offering suitable incentives. However, in so doing, we need to ensure that the emphasis is not focused on the amount of capital but rather on the transfer of knowledge, technology and skills to HK. We should in particular beware of investment inflows which are actually short term, speculative(such as property speculation) in nature but disguised as investment in true S&T.

3.6. We should facilitate the linking up of prospective local companies with Venture Capital (VC) communities both locally and in overseas countries (e.g. Silicon Valley in the United States).

3.7. Some Star areas are well in sight and Government should seriously consider getting involved:

3.7.1. Enhancing participation in the development of S&T businesses associated with the development of electrical/hybrid vehicles. We should not think only in terms of just importing electrical vehicles from overseas and concentrating only on energy saving. Participating in the research and the production of high value added components should be taken up. Also, related to this, the designation of some areas (such as South Lantau) to be a full-fledged testing ground for electrical vehicles should be considered.

3.7.2. Hong Kong people are good at creative designs of products, as we have a lot of young people who have sufficient technological background and exposure to both Eastern and Western cultures. In particular, they are good at Information technology related skills. Facilitation of enterprises committed to the utilization of this advantage should be made.

3.7.3. Developing Hong Kong into a Quality Certification hub in food, medicine and bio-medical devices.

3.7.4. Getting involved in the development of medical devices and healthcare products — this is a global opportunity.

3.7.5. Greatly expanding our participation in the development of intelligent and green building/smart home concepts.

3.7.6. Developing low carbon emission technology.

3.8. A rationalization should be made of the wide range of government-allocated funds (the Innovation and Technology Support Programme (ITSP), Guangdong-Hong Kong Technology Cooperation Funding Scheme (TCFS), the General Support Programme (GSP), GSP – Internship Programme, GSP – Patent Application Grant, The University-Industry Collaboration Programme (UICP) , the Small Entrepreneur Research Assistance Programme (SERAP) under the Innovation and Technology Fund (ITF), SME Development Fund, etc.).

3.9. A rationalization should be made of funding principles and operations of the Research Grants Council and University Grants Committee in respect of S&T research funding and S&T personnel development.

3.10. Hong Kong has been very successful in acting as a knowledge centre, having been the meeting venue of many reputed professional societies around the world. The government should step up its efforts in encouraging and facilitating such activities. HKAAST, among some other Associations, are very well placed to act as catalysts and liaison party in such endeavour, and is willing to assist the government in such work.

Concluding, HKAAST considers that S&T has much to contribute to Hong Kong’s future. Its Council and Members are prepared to render assistance as and when required to Government’s initiatives and endeavours in the S&T area.

With best regards,

Yours sincerely,
Stephen S F LEE (Dr.)