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Secretary for Commerce, Industry and Technology Henry Tang Ying-yen said yesterday he expected policy and funding co-ordination to improve under his new bureau.

It will combine oversight of information technology (IT) and industrial development as well as the role of the former Information Technology Broadcasting Bureau. The new bureau will oversee about HK$7.65 billion in IT and small to medium-enterprise (SME) funding.

'Through this merger, we have put innovation technology, IT and SME support all under one roof,' Mr Tang said in a speech to the Hong kong Information Technology Federation (HKITF).

'This will serve to enhance policy co-ordination so that we will be able to fully utilise the HK$5 billion Innovation and Technology Fund . . . the HK$1.9 billion in SME funds, and the HK$750 million Applied Research Fund, in a more focused and efficient manner.'

HKITF president Charles Mok said the organisation would, in the next few months, send the government proposals on how to achieve a streamlined approach to the allocation of funding.

He said these proposals would focus on improving the government's use of IT expertise among smaller firms through SME funds.

'The same bureau will now take care of IT . . . and SME issues, and low usage of IT by SMEs in Hong Kong is continually one of the biggest concerns we have for the health of [the SAR's] IT industry as well as the economy and productivity as a whole,' Mr Mok said.

Issues existed with efficiency in funding approvals, conflicts of interest in the approval process and the nature of projects, he said.

'Now that these funds and their administrative agencies are in the same bureau with IT, we hope the situation will improve,' Mr Mok said.

Mr Tang's speech, his first formal contact with the IT community since taking office last month, did not introduce any new policy initiatives.

However, he outlined the government's efforts to boost IT in Hong Kong over the past year.

The government last year outsourced about 80 per cent of its IT projects, with contracts worth HK$1.2 billion, and it plans to continue the same level of spending with external vendors.

Mr Tang said the government began breaking down the size of projects sent out to tender in order to allow Hong Kong's smaller IT companies to participate.

In the past, the government has been criticised for favouring large vendors and integrators.

Another HK$20 million will be allocated to promote the use of the city's smaller IT companies, and another unspecified amount is earmarked to help local technology vendors exhibit their products at overseas trade fairs.

Mr Tang will also lead a delegation to Canada's Softworld trade fair next month. Another delegation is expected to visit the Cebit fair in Germany in spring.

As Hong Kong's strength has traditionally been in industries that gain an advantage through efficiencies in manufacturing and a low-cost labour base, private investment in research and development has been low by universal standards.

Efforts to boost IT development in the past few decades have been largely government-led.

The University of Science and Technology was founded in 1991 and studies were also launched in the past decade into how to boost high-technology industries in Hong Kong.

An incubation programme was launched, aiming to provide low-rent space and other support for technology start-ups.

This spring, two government-backed IT projects were opened, with services-oriented Cyberport in Pokfulam and the research-oriented Science Park in the New Territories.

Mr Tang said the government planned to unveil a Web site to showcase IT excellence soon.

The IT schemes, especially Cyberport and the Science Park, have cost the government billions of dollars, though the sums spent are small compared with the amount other countries have allocated for similar developments in the sector.

Questioned on what the government was doing about the supply and cost of IT experts in Hong Kong, Mr Tang said it would not step in to take control of the price of IT labour.

He said a scheme was in place for IT workers to obtain visas before entering Hong Kong, though the point was not to bring in lower-priced experts who would displace local workers.

Mr Tang said he expected to set up meetings with all the city's major IT groups within the next two months. Next week he would meet Sin Chung-kai, the legislative councillor representing the IT constituency.



Merger to lift IT efficiency