Vision to make Hong Kong Silicon Valley of Asia
17 - 03 - 2000

The Government is fully committed to and plays an important part in achieving the target of developing Hong Kong into a centre of innovation and technology in the 21st century.

Speaking at a forum on venture capital and technology financing in the Hong Kong Information Infrastructure Expo and Conference 2000 today (Friday), the Director of Information Technology Services, Mr Lau Kam-hung, said,"I believe that Hong Kong is already in possession of the critical success factors that will make us the Silicon Valley of Asia."

"These factors are: a free market, an entrepreneurial spirit, a sound legal system, excellent infrastructure and a well-developed capital market," said Mr Lau.

However, he stressed that simply possessing these critical success factors was not enough, and that the Government had a vital role to play in facilitating the development of advanced technology and in strengthening the private sector's capability to develop innovative ideas for commercial use.

"Recently, new high-tech projects in Hong Kong such as the Cyperport and the Science Park have attracted considerable investment interest," said Mr Lau.

"We believe that these new projects and others like them will create an environment conducive to the fruitful exchange of ideas and technology," he added.

Another initiative which will boost support for Hong Kong's industries in developing high value-added products is the establishment of the Applied Science and Technology Research Institute (ASTRI).

Targeted for completion in 2004, the ASTRI will play the role of carrying out high-quality mid-stream research and development projects for transfer to the industry sector.

Apart from the infrastructural initiatives, the Government also implements financial initiatives to develop Hong Kong into a centre of innovation and technology.

The Innovation and Technology Fund (ITF), injected with $5 billion by the Government, provides essential support to projects that will contribute to innovation and the technological upgrading of the manufacturing and service industries in Hong Kong.

More than 300 applications for the ITF were received last year before the closing date.

"In addition, venture financing is also provided through the Applied Research Fund, the ARF, to the private sector to assist companies undertaking innovative technological projects with real commercial potential," said Mr Lau.

So far, more than 10 investments have been made with the $750 million ARF, accounting for about one-quarter of the fund's total.

The Growth Enterprise Market serves as an alternative mechanism enabling emerging companies to raise funds for business development.

Mr Lau also pointed out that active participation and support of venture capital and technology financing from the private sector was equally essential in enabling new technologies to flourish in Hong Kong.

The software and Internet-related companies in Hong Kong, which invest little in fixed assets, are difficult to secure loans from conventional financial institutions.

The provision of appropriate financial services by the venture capital firms to the local information technology business that grows at a rapid pace will be a solution to their financing problem.

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