The SAR's electronics industry is now at a crucial crossroads in its development, industry experts say. The industry is still the SAR's largest merchandise export earner, accounting for 31 per cent of Hong Kong's total exports at $414.4 billion last year but it has traditionally relied on the low-tech, low added-value portion of the market. The global market had changed rapidly and is now dominated by hi-tech. For Hong Kong to survive and flourish, it must adapt, experts say. Hong Kong manufacturers had favoured this bottom-end market segment because of the quick profit, low level of investment, minimal specific technology and cheap, unskilled labour required. It is however, this end of the market that has suffered most during the last three years of economic recession. Globally, electronic selling prices have fallen and Hong Kong has struggled to compete with countries such as China, Malaysia, Indonesia and Thailand, where, because of the cheap pool of labour, low production costs have been maintained. Last year, Hong Kong electronic exports fell 3 per cent. To compound matters, the experts said, such reliance on this low- market end had meant the industry as a whole now struggled to keep abreast of the rapid developments occurring within the research and development heavy digital and Internet boom industries that were sweeping markets worldwide. 'For the past two decades in Hong Kong, there has been very little original design or development,' Dr Michael Tse, associate professor in the Department of Electronic and Information Engineering at Hong Kong Polytechnic University, said. 'The emphasis has been on manufacturing products for overseas companies and the attitude amongst Hong Kong manufacturers has been to make money quickly. 'Over the next 10 years the disparity between research and manufacture has to narrow,' he said. According to Dr C. Chang, managing director of Varitronix, a market leader in the hi-tech, high-investment world of microdisplays, Hong Kong had already lost its edge against its neigh bours. 'Especially Taiwan,' he said. 'For far too long Hong Kong manufacturers have been too interested in speculation, instead of doing a hard day's work. 'It looks like the Government is at last taking measures to do something about it. 'It will be a long and hard road catching up but we have to start somewhere and start now,' he said. The Electronic Fair and concurrent exhibitions, the Lighting Fair and Electronic Asia, all organised by the Hong Kong Trade Development Council, seem to recognise this need. This year's fairs all have a strong emphasis on state-of-the- art technology and have attracted exhibitors from around the world.
