Luncheon Speech by Mr K H Lau, Director of Information Technology Services in Melbourne on 1 - 9 - 1999

Ladies and Gentlemen,

I'm delighted to be here in Melbourne today - the great southern capital of Australia - and to have this opportunity to share with you some of the things we're doing in Hong Kong in the world of information technology.

And, hopefully, arouse your interest in the opportunities available for international participation in the development of an advanced IT infrastructure for Hong Kong. Or, at the very least, encourage you to visit us to see what we have to offer.

And here I might put in a plug for what surely is one of the best and most business-friendly tax systems you will find anywhere - 16% profits tax and a maximum 15% salaries tax. That is not bad for starters!

As you are aware, advances in IT have brought about a lot of changes - from the way we work, the way we communicate, to the way we do business. For Hong Kong, the important question is how do we maximise the use of IT to retain our competitive edge and to drive our overall economic expansion.

To help answer this question, we set up the Information Technology and Broadcasting Bureau (ITBB) in April last year to lead and coordinate the work of all those in government involved in IT and the related areas of broadcasting and telecommunications.

The result of the Bureau's first initiative was 'Digital 21' - an IT Strategy released last November. The blueprint contains a range of initiatives designed to make Hong Kong a leading digital city in the 21st century.

The strategy is based on how we see the world evolving and the part Hong Kong can play. In the digital world of the future, geographical distances will become increasingly insignificant. This will result in more opportunities for cooperation with places like Australia.

Besides facilitating communications, digital technology brings new business opportunities. Operators are able to enter markets that were previously not possible. And, in the process, significantly reduce their operating costs as well.

With the advent of new technology through which we can now transmit information to every corner of the globe faster than 'the speed of thought', optimising its use will be critical to competitiveness in tomorrow's world.

But it won't be all plain sailing. We still have to dodge the boulders in the path to realising fully the economic and social benefits of the digital world. Why do I say this?

• Despite the rapid development of communications networks, language is still a barrier to the quick and efficient dissemination of information.
• Differences in culture remain despite advances in global transportation and telecommunication.
• Differences in regulatory, legal and institutional arrangements will still have an impact on information flow and electronic transactions.

But there is a solution. And Hong Kong has a combination of attributes to distinguish itself in the Asian region:

• In terms of language, we are a bilingual city - using English to communicate and obtain information from most countries in the digital world; and acting as a digital intermediary in linking Mainland China with the rest of the world, as well as co-operating with other Chinese-speaking communities.
• We are an open cosmopolitan city - accessible to the cultures of the world and ready to assimilate the latest knowledge and technology.
• We have the world's freest economy, which includes a free flow of information so important in a world where knowledge drives economic growth.

The main thrust of our IT strategy includes:

• developing high capacity telecommunications networks to provide the arteries through which digital information flows;
• establishing an open and common interface enabling individuals, business and government to interact easily and securely through digital networks;
• educating and training in IT to equip our younger generation and our work force with the skills necessary for the digital world; and
• cultivating a culture that welcomes the use of new technologies in the community.

We believe this IT Strategy dovetails with Hong Kong's strengths.

But, at this point, I don't want to take up your valuable time by going through all the initiatives. Instead, I will focus on several key areas directly related to building an advanced IT infrastructure for Hong Kong.

The government is taking the lead in promoting the benefits and cost-effectiveness of e-commerce with the launch of its Electronic Service Delivery scheme, or ESD for short.

This will provide public services around the clock through the Internet, interactive phone or TV, touch-screen kiosks and at no extra charge to users.

The successful tenderer is expected to be announced by next month (October) and we aim to launch the first phase towards the end of next year.

The initial services offered will include filing salaries tax returns, renewing driving licences, paying government bills, and many others.

The infrastructure developed for ESD will be made available at a later stage to the private sector for conducting e-commerce.

Apart from the implementation of ESD, we are concurrently looking into a number of related issues to ensure we have the right environment for the scheme to take hold. And for e-commerce to develop.

For example, concerns about the security of transactions conducted over open networks are often cited as an impediment to using e-commerce.

In addressing this, we are establishing a Public Key Infrastructure (PKI) with the assistance of Hongkong Post, which will begin providing a public certification service by the end of the year.

This will provide a secure environment for authenticity, integrity, confidentiality and non-repudiation that are crucial to conducting business in cyberspace.

We don't intend imposing a ceiling on the number of certification authorities, leaving this entirely to market forces.

The Information Technology Services Department will be responsible for granting official recognition of the various certification authorities, but it will be up to them to seek recognition.

We have introduced an Electronic Transactions Bill into the Legislative Council of the Hong Kong Special Administrative Region to provide a clear legal framework for electronic transactions.

We aim to provide certainty in conducting e-commerce by giving the same legal status to electronic records and digital signatures as their paper-based counterparts.

The Bill will also provide legal backing for the operation of certification authorities in Hong Kong.

Our aim, as well, is to use the private sector as much as possible in our efforts to continually improve public services.

We have set ourselves an ambitious target of out-sourcing at least two-thirds of all new IT projects by 2001. That alone spells potential for Australian firms.

This will not only help boost the Hong Kong industry, but build on the IT skills in the work-force and, in the longer term, benefit the rest of society in the application of information technology.

Our plans to position Hong Kong at the forefront of innovation and technology in Asia have recently been enhanced with the announcement of several initiatives, including the visionary 'Cyberport'.

This project, estimated to cost some 2.5 billion Australian dollars, aims to provide a specially designed environment for the development of leading edge IT applications and services.

The tenants will benefit from a range of shared facilities including broadband telecommunications backbone and interfaces with universities and research institutes, multi-media laboratories, a cyber library and other information technology and services support facilities.

Twelve international companies have already signed up as anchor tenants including Intel, Hewlett-Packard, Oracle, IBM, Yahoo! and Sybase.

We are also creating a science park to help Hong Kong obtain the critical mass for widespread applied research and development work; and to exploit the enormous potential from the convergence of technologies.

The park will be another link in the government's commitment to supporting the development, transfer and use of advanced technologies in Hong Kong.

We are an ideal base for R & D efforts targeted at the Asian market. And, we encourage participation from multinational companies in this and a whole range of IT services and applications.

Our objective is to provide an environment conducive to industrial investment through the provision of high-quality human capital and first-class physical and technological support infrastructure.

Taken as a whole, our IT strategy aims at preparing Hong Kong for the digital world of tomorrow.

Adapting to more change, more often and more quickly will become the norm.

There will be a handful of players in the global arena that have the will and the capacity to take the opportunities, move with the times and achieve real and positive change that will benefit the community. Hong Kong will be one of those players.

We acknowledge Australian ingenuity in the IT field. And Hong Kong, as an open and free society with a business environment the envy of many, invites your participation in the development of our IT infrastructure and services.

Thank you.

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