Innovation & Technology Bureau

Policies and Practices for Hong Kong as a Knowledge Economy and the Proposed

Innovation and Technology Bureau


Alan Lung, Director & General Manager &

Gordon McConnachie, Chief Technology Office, APICC

(Asia Pacific Intellectual Capital Centre Whitepaper #8, July 2011)

Download the full English version of this whitepaper as a pdf file

Executive summary

According to a briefing made by the CPU, Hong Kong has been looking at further economic diversification as it was felt that the traditional industries should not be the only drivers of economic growth. The “Six New Industries” were proposed with the primary objectives of improving people’s livelihood, boosting employment and providing more opportunities for the young people. There is now increased economic integration with Mainland China and an added dimension of “HK-Taiwan” relations following the improvement in “Cross Strait” relations. According to the Central Policy Unit (CPU), HKSARG is unlikely to be dogmatic on the subject of “Free Market Economy” versus “Planned Economy”. Hong Kong needs to do well in its participation in Mainland’s “12th Five Year Plan” (2005-2010), HKSARG’s support to industries will increase but implementation of “central economic planning” in HK is unlikely to be feasible as the HKSARG does not have control over HK’s economic activities.

From the visit, APICC observed that government units in Taiwan are more aware of the need to help industries in the “commercialization” process when compared to Hong Kong. Business enterprises, academics and government units in Mainland China are also aware of HK’s unique administrative, legal and commercial infrastructure and understand HK’s potential to assist China in moving towards goals stated in the “12th Five Year Plan”. Hong Kong needs to have a better understanding of how the game in international trade is played if it wishes to play a more useful role in China’s economic development and move away from the current government policy of A) “intellectual property protection alone”, to B) “how to make use of IPR to create commercial values for business enterprises”.


A more holistic approach to economic development needed

Hong Kong has not been a totally laissez-faire economy. For example, the “Rail-link Land Use Policy” and the decision to build the Mass Transit Railway (MTR) were made in the late 1970s. HKTDC and HKPC were established in the mid-1960s and Mr. C.H. Tung took advice from Prof. Tien Chiang-lin in 1998 and began to build the innovation and technology capacity we have today. Hong Kong, however, will benefit from a more holistic approach to economic development and an overall strategy of developing innovation and technology. The Innovation and Technology Bureau (I&TB) proposed by Samson Tam (Legislative Councilor, IT Sector) is such an attempt.

The role proposed I&TB would include providing strategic direction, exploiting existing opportunities, exploring new ones, coordination within HKSARG and specific implementation steps to convert wishes into reality. It will also assist HK enterprise and R&D agencies to understand how to extract values from money invested in “intangible assets” and create commercial values from “intangibles”.

I&TB will also coordinate policy initiatives within the HKSARG, driving change amongst the business community and public and will have the role of helping to attract inbound investment and helping to position Hong Kong as one of the most important “Knowledge Economies” within China and around the world. Such activities will indirectly assist Mainland organizations to connect with the rest of the world (i.e. “going out”走出去Zǒuchūqū strategy) through Hong Kong.

With the passing of the motion debate moved by Samson Tam on 6 July 2011, HKSARG now has a clear mandate from Legco to investigate the roles of the proposed Innovation and Technology Bureau. From an administrative viewpoint, a practical way to put the Innovation and Technology Bureau into practice is to upgrade the Communications and Technology Branch (CTB) of the Commerce and Economic Development Bureau (CEDB) to become a full policy bureau. The newly created Innovation and Technology Bureau would assume all the existing functions and the Government Departments now under the supervision of the Branch. Since protection and use of Intellectual Property Rights (IPR) are closely related to Innovation and Technology, the HKSARG should also seriously consider putting the Intellectual Property Department (IPD) under the supervision of the proposed Innovation and Technology Bureau.


Hong Kong to become an IP and Technology Transfer Centre

“Technology” throughout this document is used in the wider sense to include ‘Know-how” and business process. HK is well established as a trading centre for goods and services and can become an IP and Technology Transfer Centre for Asia.

HK’s current experience in IP Trading comes largely from the more narrowly defined experience of licensing of trade mark, musical work and product design licensing; (i.e. “Copyright”, “Trademarks” and “Registered Design”). There is almost no experience in trading “Patents” and in the IP and Technology Transfer arena China is seeking help in and with which HK ought to be involved. Such an approach require the high-end and integrated “legal”, “business” and “technology service” skills and business environment to package and sell an IP and Technology bundle. Such high-end business service skills are essentially missing in HK at this moment.

HKSARG’s facilitation and involvement, such as pushing ahead with signing more than 50 bi-lateral Double Taxation Avoidance Agreements (DTAAs), pushing ahead to work with the Central Government in issuing HK originated patents and finding practical ways to use HK’s strong legal and administrative environment to assist Mainland China’s “Self-initiated Innovation” goal, such as participating in a proposed Enterprise China Network (ECN) technology transfer initiative in close collaboration with ITTN-Beijing and the Enterprise Europe Network (EEN) owned by the European Union are necessary.


A new economic development path

Credit must be given to Mr. C.H. Tung, HK’s first CE for having the foresight to build up the innovation and technology capacity HK now has today. However, the “intellectual argument” on how the HKSARG should facilitate Hong Kong’s economic development will be an on-going issue. HK will benefit from undertaking some practical steps and further studies on the “philosophical” as well as practical implementation aspects of HK’s further development into a world-class “Knowledge Economy” that service Mainland China and the world (see Point 5.4 Section and Section 6). The proposed I&TB will have a strong role to play in economic development and job creation and at the same time be able to defend government facilitation in a coherent intellectual framework or strategic blueprints to local, mainland and international stakeholders.

Hong Kong (HKSARG and government critics alike) somehow acknowledges that the “old” economic development model is not working but could not pinpoint what the “new” economic development model is. HK needs to find its own market niche and its own economic development path based on its unique history, economic and social strengths and political position as a territory of China that operates under a separate legal and administrative framework that is separate from the Mainland under “One Country, Two Systems”. HK also has a very unique role to play in the further development of China. The “Knowledge Economy”, the practical policy measures and steps proposed in this document and the Innovation and Technology Bureau are proposals. It is clear the without some sort of government leadership and facilitation, the economic transformation in HK will not happen.