Industrialists and politicians applauded Mr Tung's hi-tech initiatives, which include creating an Innovation and Technology Fund with a $5 billion injection.
'Innovation and technology are important drivers of economic growth,' Mr Tung said.
'We need now to strengthen our support for technological development, build up a critical mass of fine scientists, engineers, skilled technicians and venture capitalists, and encourage the development of a significant cluster of technology-based businesses.' He announced the adoption of another recommendation of the Commission on Innovation and Technology. An applied science and technology research institute would be created for mid-stream research and development, which he said was an area of weakness.
Mid-stream research and development turns basic scientific research into commercial application. The Government will start a consultancy study on the institute next year.
Mr Tung also spoke of the need to stimulate co-operation between academic institutions and industry in research and development.
Programmes for matching grants for collaborative research projects and private companies funding research initiatives in universities would be introduced.