Hong Kong's booming manufacturing industries are underwriting the surge in the service sector, according to a book launched yesterday. The Hong Kong Advantage also claims the unique strengths of the territory's business and commerce will enable it to adjust to rapidly changing conditions without government direction or intervention. The book, sponsored by the Vision 2047 Foundation, was written by Michael Enright, a visiting professor at the University of Hong Kong School of Business, Edith Scott, an attorney and trade consultant, and Jardine Fleming director David Dodwell. Mr Enright says Hong Kong's location, work ethic, information channels and competitiveness give it its fundamental economic strength. He said: 'It is rather robust and should be able to weather significant storms.' In a veiled reference to the handover, he said there were no major 'storms' on the horizon. 'We understand there are challenges but believe the intrinsic strengths of the economy bode well for the future.' The findings and recommendations contrast with excerpts from a report published earlier this week by the Massachusetts Institute of Technology. The report says the territory can no longer rely on the strengths and advantages it has acquired during the past 40 years of rapid industrial expansion. It calls for a range of measures including a dramatic increase in research and development, venture capital incentives for technology firms and low-cost housing for scientists and engineers. Mr Enright said he would welcome increased expenditure on education but dismissed any interventionist role for the Government. 'I see an economy that is strong and highly diversified. Hong Kong can prosper without being in every industry. It has always been able to change but it has always been market forces that have driven the economy and will continue to be in the future.' The book debunks a widely held view that the territory's manufacturing sector is in terminal decline. It argues that Hong Kong manufacturers seek out production advantages, such as cheaper labour, in different countries. Mr Enright said the popular view that employment in the manufacturing sector peaked in the 1980s at about 870,000 failed to take account of its changing composition. He said the sector now employed about 350,000 in Hong Kong, about five million in the Pearl River delta region and 'countless hundreds of thousands' elsewhere. The Government had reclassified about 49,000 former employees in the manufacturing sector as service workers even though they were doing the same jobs. Mr Dodwell said: 'Hong Kong is not a gateway [economy]. Its firms have become packagers and integrators of economic activity dispersed across many countries.'