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(Left) Eddy Chan thinks innovation and technology can provide Hong Kong new business opportunities and the way out of the financial crisis. (Right) An engineer is working on a horn antenna for caliberation at the antenna laboratory of the Hong Kong Applied Science and Technology Research Institute.

Innovation and technology are the major driving forces behind the economic development of Hong Kong, said Eddy Chan, Commissioner for Innovation and Technology.

As the global financial meltdown has wreaked havoc on Hong Kong's financial sector and exposed the over-reliance on the finance industry, the pursuit of innovation and technology as a new economic growth engine provides a way out and new business opportunities.

In an exclusive interview given to China Daily, Chan said Hong Kong needs to pursue the innovation and technology path in order to enhance its competitiveness in the face of challenges posed by globalization.

Using the Hong Kong-funded businesses in the Pearl River Delta (PRD) as an example, he said that since the 1970s, many Hong Kong manufacturers have been opening manufacturing plants in the PRD. At the beginning, they played the role of original equipment manufacturer (OEM), meaning that they received orders from buyers and manufactured products under the buyers' own brand names.

Although the OEM pattern was inexpensive and profitable, other manufacturers who produced the same appliances at even lower costs got into the game, thus prompting Hong Kong businessmen, since the 1990s, to take on a new role of original design manufacturer (ODM) to manufacture their own designs and brand names.

And as the mainland authorities have enforced more stringent environmental protection regulations, prompting manufacturing to make greater use of technology to curb pollution to the environment.

Higher added-value

The Hong Kong SAR government is also doing its part to promote the wider use of applied technology to support the development of local industries. "Innovation and technology help the industries advance to a higher level and to shift to products of higher added-value," he said.

Speaking in the Hong Kong context, Chan said promotion of innovation and technology can take the form of distinct levels, like the upper, middle and lower steams of a river.

At the lower stream, there are universities doing the research and development work. "R & D by the universities at the lower stream is rather basic and academic in nature," he explained. .

At the middle stream level, there is the Hong Kong Science and Technology Park that promotes the use of applied technology with good potential for commercialization.

Having attracted foreign, mainland and local hi-tech companies to move into the park, it has formed a cluster that facilitates convergence of talents, knowledge exchange and further interaction.

Another institution that also plays the middle stream role is the Hong Kong Applied Science and Technology Research Institute (ASTRI) and the Cyberport.

The two institutions play slightly different roles, with the ASTRI playing a more R & D role and the Cyberport playing a more commercial role.

"We hope to make the Cyberport the Hong Kong answer to the Silicon Valley," he enthused.

As to the lower stream, it is referred to as the process of transformation from technology into products for commercial use.

Since commercialization is not the strong area of the universities, the SAR government in 2006 set up five R & D centres, focusing on automobile parts and accessories, information and communications technologies, logistics and supply chain management, nanotechnology, and textiles and clothing respectively.

At the lower stream is also the Hong Kong Productivity Council that helps promote the industrial use of applied technology.

Chan admitted that the commercialization process of applied technology takes a rather long time and requires huge input of resources to improve the technology level and meet the requirements of the industries.

R & D achievements

Some great achievements in R & D have been made over the years, he said. The most notable products that are researched and developed in Hong Kong and are used frequently by members of the public include the internationally-acclaimed Octopus card, which is a smart card developed through radio-frequency identification technology.

In addition, the TV set boxes used for digital TV broadcasting were also researched and developed by ASTRI in Hong Kong.

In January this year, the Innovation and Technology Commission launched an internship programme to subsidize recruitment of university graduates and post-graduates as research trainees by tertiary institutions and research organizations, with a view to creating job opportunities, while enhancing the long-term R & D capabilities of Hong Kong.

Each institution is allowed to employ two research personnel for a period ranging from 12 to 24 months, Chan said.

A university graduate will be paid HK$10,000 per month and a post-graduate will be paid HK$12,000 per month, with the salaries being borne by the government.

And recently, the internship program has been extended, allowing the small and medium enterprises to hire graduate interns too.

"The institutions, SMEs and students have found the scheme more attractive than before the current economic downturn," he said.

"Since the beginning of this year, we have received many applications, and so far, more than 140 interns have been recruited. To the graduates, it is a very good opportunity because they do not only enjoy internship opportunities, but have also the chances of being offered permanent employment after completion of the placement period."

(HK Edition 08/07/2009 page4)