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Actors dressed as Star Wars characters pose for the media during the opening ceremony for Lucasfilm Ltd.'s Sandcrawler building. Photo: Bloomberg

Hong Kong can and should foster creative industries

The launch of an Asian visual effects and animation hub by Star Wars franchise holder Lucasfilm doesn't appear to have much to do with the Hong Kong chief executive's policy address, until you come to the bit on innovation and technology and the plan to set up a new government bureau to help develop them as drivers of our economy.

The launch of an Asian visual effects and animation hub by Star Wars franchise holder Lucasfilm doesn't appear to have much to do with the Hong Kong chief executive's policy address, until you come to the bit on innovation and technology and the plan to set up a new government bureau to help develop them as drivers of our economy. The visual-effects hub is surely the sort of thing the government has in mind - but it has gone to Singapore, along with 400 jobs in the creative sector, which our government is also trying to nurture. That underlines the challenge facing the city in sustaining its competitiveness as a place in which to do business and invest as China continues opening up and regional rivalry intensifies.

Beyond the headlines about subsidies for the working poor and housing supply, the most important part of Leung Chun-ying's address was about economic development and restructuring. His main point is that we need a bigger pie to sustain care for an ageing population without raising taxes, which would undermine one of our key advantages. Looked at that way, his policy address does not bristle with new ideas, still focusing on finance and services. However, setting up a bureau to facilitate innovation and technology is arguably important to the city's competitiveness in the face of narrowing of its advantages - low tax, the rule of law, a gateway to China and a flexible economy and workforce. The first two are now critical, since the last two are being undermined by China's opening up. In this respect, it is good to see a US-based think tank maintain Hong Kong's ranking as the world's freest economy, although Singapore is closing the gap, and to hear the secretary for justice stand up for the independence of the judiciary and the rule of law in a rebuke to criticism of judges' decisions.

Hong Kong also has enormous reserves that are effectively an investment engine that adds to government coffers. The foundations of the growth needed to maintain this edge remain a free and low-tax economy with global connectivity in goods and finance that brings in companies and investment.

In keeping with the laissez faire principle that the market leads and the government facilitates, an innovation and technology bureau would have a role to play in creating a positive climate for investment and risk-taking. That said, innovation and technology are a familiar economic panacea. Creativity also depends on greater investment in education that channels and develops people's talents.

This article appeared in the South China Morning Post print edition as: Time for some creative thinking
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