The government's ambition of transforming Hong Kong into a regional science and technology hub suffered a setback yesterday in the wake of a report measuring the city's ability to exploit innovation and technology to boost competitiveness. Despite securing its highest position in the World Economic Forum survey, based on strong performance in free-market indicators and quality of IT infrastructure, Hong Kong lagged rivals in education and innovation. Hong Kong finished seventh among 104 economies surveyed, up from 18th place previously but behind regional rival Singapore. The city-state topped the ranking for the first time, based on its government's 'consistent and continuous efforts in fostering [innovation and communication technology] penetration and usage, as well as the quality of the country's educational system and its able use of foreign technology', according to the report. Augusto Lopez-Claros, director of the global competitiveness programme at the World Economic Forum, highlighted the Singapore government's level of support for private sector technology initiatives and, based on 'impressive performance just about everywhere', predicted that 'Singapore will remain at the top or near to it for several years to come'. Hong Kong scored highly in economic indicators, including ease of starting a business, and access to loans and venture capital. Information technology infrastructure was also a boon to the city's economy, thanks in large part to its high internet and mobile phone penetration, measured at 61 per cent and 120 per cent respectively in recent data. However, the territory ranked below Singapore in the quality of public schools, education and scientific research institutions, all of which contributed to 46th place overall in terms of the availability of scientists and engineers. 'What we are measuring is the ability of a country's scientific community to create something that is new and innovative, and that's directly related to quality of education, and in particular maths and science education,' Mr Lopez-Claros said. Japan and Taiwan also climbed the rankings, finishing in eighth and 15th place, respectively. China jumped 10 places to 41st based on relatively strong performance in technology clustering and capacity for innovation. The mainland government also scored highly for its support of private companies engaging in research and development and introduction of public sector online services. 'Asia is the continent to watch in coming years, as many countries in the region make successful transitions from being fast users of established technologies to imaginative generators of new ones,' Mr Lopez-Claros said. 'With trade barriers coming down everywhere and corporations having an increasingly global perspective, it is probably only a matter of time before we see the emergence of Asian [innovation and communications technology] giants,' he said. 'India and China have a clear potential to make further gains in coming years.'