'Cultural and creative industries are not about how much an individual entrepreneur earns. With the mindset of an ordinary businessman, it's impossible to develop cultural and creative industries,' said Jim Chim, artistic director of PIP Cultural Industries. 'We need our society to endorse what we do, and be proud of what we do.' To help development, 'the government must learn and understand the ecology of the industries'.

Cultural and creative industries - design, architecture, advertising, publishing, music, film, computer software, digital entertainment, performing arts, broadcasting, and antique and art dealing - are again in the spotlight. Six years after a detailed Central Policy Unit study outlined the framework for developing them, the government has finally set up CreateHK.

It will be dedicated to the development of this economic pillar, which contributed 3.9 per cent of the city's gross domestic product in 2007 under the Commerce and Economic Development Bureau.

It will manage a new HK$300 million fund, the CreateSmart Initiative, to support industries outside film and design, which already receive funding.

The government has also determined several strategic areas on which to focus, such as nurturing talent, facilitating start-ups, expanding markets, fostering community creativity, and developing creative 'clusters' in unused heritage buildings. The development of cultural and creative industries has fallen behind that in many advanced economies, such as Britain and Singapore. But still, industry professionals believe Hong Kong can succeed.

Hong Kong Digital Entertainment Association chairman Gabriel Pang Tse-kit praised the city's freedom of speech, which has laid the foundation for a creative economy. Desmond Hui Cheuk-kuen, a cultural and religious studies professor at Chinese University who directed the 2003 Central Policy Unit study, says that despite the lack of policy support in the past, a strong private sector maintains Hong Kong's competitive edge. Mr Pang said the city's law and order and the protection of intellectual property also made Hong Kong stand out in the region.

Professor Hui said: 'If you look at Singapore, policies on arts, culture and economic development complement each other.' In the short term, the government should at least co-ordinate existing programmes to form a faculty to teach creative industries at universities, he said.

Philip Dodd, an expert in cultural and creative industries and chairman of Made In China who has been advising the British government on developing this sector, shared the same view.

'Hong Kong needs to develop its own educational programmes to develop creative industries, particularly at the postgraduate level,' he said. 'Creative industries are not [just] about creating, but also managing and turning creativity into commercial operations.'

Expanding the markets for Hong Kong's creative products is crucial, experts say: the city should make a bigger effort to promote its creative business to the rest of the world.

Hong Kong Design Centre vice-chairman Freeman Lau Siu-hong said the government should make it easier to gain entry to the mainland by lowering requirements to set up businesses north of the border.

A better and more focused support for small and medium-sized enterprises with real potential was necessary, Mr Pang said. But high rents were an issue that had to be resolved, Mr Dodd said, especially when compared with Beijing and Shanghai, where creative industries were developing rapidly.

Although the government had identified the 11 categories of cultural and creative industries, Hong Kong should look at a new definition of creative industries, he said. That should include design services, such as the use of the Octopus card system. 'When London steals from you, you know things are good,' he said, referring to London's Oyster card system.

'These are the things that [Hong Kong] people don't think of. Hong Kong should focus on the creative businesses that Hong Kong is already strong at.'

Award-winning architect James Law, who has created hi-tech buildings and calls himself a 'cybertect', said creating new businesses on the back of existing ones was a worthwhile concept.

Those in the industry have questioned the government's determination when the development of cultural and creative industries appears to be isolated from the city's cultural policies, handled by the Home Affairs Bureau, and education, monitored by the Education and Manpower Bureau.

Development of the West Kowloon Cultural District also seems not to be part of the big picture.

To make cultural and creative industries sustainable in the long run, the Design Centre's Mr Lau said the authorities must look beyond the economics and take culture and education into account. He said he hoped that CreateHK could break down the walls separating different bureaus overseeing cultural and educational policies. With the development of the arts hub as the ultimate showcase of local culture and creative industries, the coming few years would be critical, he said.

But the biggest worry is the lack of long-term vision. The government had to renew itself, become innovative and think beyond the short term, Mr Law said. 'The government has to look at the future - not the next five or 10 years, but the coming 100 years.'

This is the third in a series of articles examining Hong Kong's new economic pillars