Luddites aside, no one argues technology is a bad thing. But is government involvement a good thing? David O’Rear looks at the proposed structure of the ITB and has some suggestions for our leaders.
Does Hong Kong really need another government department? The key questions that will help to answer this concern need, objectives, parameters and alternatives. The proposed Innovation and Technology Bureau (ITB) is a case in point.
Need
Aside from a handful of Luddites, few would argue that innovation and technology are unimportant to economic development and overall competitiveness. Judging from other jurisdictions, promoting, facilitating and funding innovation and technology seems to be quite popular. Boston and Chicago both have Departments of Innovation and Technology, San Francisco boasts a Chief Innovation Officer, Singapore has the National Research Foundation (NRF) and Japan the Council for Science, Technology and Innovation.
Not all government efforts to promote innovation and technology are successful. Witness the many efforts to copy Silicon Valley’s success, and the very small number that were worth the effort. Understanding what such a department is supposed to do, and not do, can make a big difference. Ideally, it would address strategic and long-term issues, with an emphasis on enhancing competitiveness. Consolidation and management of existing funding schemes would also be an important part of the new bureau’s raison d’être.
Not all government efforts to promote innovation and technology are successful. Witness the many efforts to copy Silicon Valley’s success, and the very small number that were worth the effort. Understanding what such a department is supposed to do, and not do, can make a big difference. Ideally, it would address strategic and long-term issues, with an emphasis on enhancing competitiveness. Consolidation and management of existing funding schemes would also be an important part of the new bureau’s raison d’être.
Hong Kong needs to think about the scope and responsibilities of an ITB.
Parameters
Hong Kong needs to think about the scope and responsibilities of an ITB. We don’t want to overreach and end up pouring taxpayers’ money into flashy, impractical projects. We also don’t want to simply pay lip service to planning our positioning in the 21st century. Keeping a narrow focus on what’s feasible, facilitating where necessary and training the future workforce is a big enough job by itself.
We also should be wary of putting existing offices with diverse, unrelated functions into this new structure. For example, it takes a real stretch of the imagination to include management of the Office of the Government Chief Information Officer as part of promoting competitiveness through innovation and technology. Surely that job belongs under the Chief Secretary, where official points of view are coordinated, or with the promotion arm of InvestHK.
Better would be to house Create Hong Kong and the Intellectual Property Department under a broad bureau dedicated to exactly those kinds of activities. But, that is not part of the current proposal. As a result, even with a full-fledged ITB in place, cross-departmental coordination, communication and efficiency would remain, shall we say, “challenging.”
Much of the innovation taking place today, and particularly here in Hong Kong, relates to mobile telecommunications and computing. The Communications Authority currently manages the radio frequency spectrum and oversees certification and testing of telecoms related technical standards. It also enforces anti-spamming, unfair trade and certain anti-competitive regulations, all of which will only grow in importance. Add to the list cyber security, privacy protection and intellectual property rights and the case for including at least parts of the Communications Authority under the ITB is a strong one.
Manpower development is another core area for the ITB, including directly working with universities on commercializing technical innovations, attracting investors and developing brands. There is also ample room for improving the government’s own functions through, for example, better coordination among the Lands, Buildings, Transport and Housing departments on matters such as rezoning.
Other steps that need to be taken, regardless of the fate of the ITB in LegCo, are relaxing the rules on eligibility for the R&D Cash Rebate Schemes. This quite useful
programme needs to expand beyond a few designated local research institutions. Bringing business partnerships into the mix is a proven means of not only driving the practical side of innovation but also attracting private sector financing.
Objectives
Here’s a modest proposal for the ITB’s remit:
“The ITB sets the direction for research and development (R&D) by developing policies, plans and strategies for research, innovation and enterprise. It also funds strategic initiatives and builds up R&D capabilities by nurturing research talent. The ITB aims to transform Hong Kong into a vibrant R&D hub that contributes towards a knowledge-intensive, innovative and entrepreneurial economy; and make Hong Kong a talent magnet for scientific and innovation excellence.”
If it looks vaguely familiar, it should. I stole it directly from Singapore’s NRF and just changed a couple of words.
Alternatives
What’s the alternative to government support enhancing our innovation, technology and competitiveness? Well, the private sector springs to mind, but that community wasn’t been all that enthusiastic. And, the odds are that private enterprise isn’t about to suddenly abandon places that provide strong government support in order to move to Hong Kong.
We regularly plow an amount equal to just 0.75% of our GDP into research and development, year in and year out. That does not compare favourably to the 3% or more invested in Shenzhen, Guangdong or Singapore. Of course, we have low taxes (if you do the right kinds of things, otherwise they aren’t so low) and a simple compliance regime (unless you’re into innovative dining or retailing). But, that is not enough.
Investing in unproven research is expensive, and developing such research into marketable products takes even more time, and money. But, we have the money. We have uncounted billions in our various reserve funds, money that is supposed to carry us over when times are tough and revenues decline. If we fail to act now, to invest in our future industries, our future talent and in the policies to get us there with a minimum of red tape, we will indeed need that money to shore up our finances.
We don’t want to overreach and end up pouring taxpayers’ money into flashy, impractical projects.
But, if we make the investment, and reinvent Hong Kong one more time, as we have over and over in the past, we might not need quite so much money stashed away under the mattress. That money does nothing to help us sleep better at night.
According to last year’s HKGCC Business Prospects Survey, just 4.9% of respondents thought Hong Kong’s competitiveness improved in the previous 12 months, and 62.3% thought it declined (the remainder saw no change). According to the survey respondents, the areas that need work (and which are relevant to this discussion) include, the cost of doing business and quality of life (82% gave 4 or 5 points out of 5) and longer term government planning (81%).
4.9% thoght Hong Kong’s competitiveness improved in the previous 12 months. –HKGCC Business Prospects Survey
Many of us here in Hong Kong, and perhaps even more located elsewhere, admire the great restraint with which our government interacts with the economy. We’ve coined descriptions such as “positive non-interventionism,” and “big market, small government” to express our core ideology. But, in recent years we’ve shifted to a more proactive approach, as seen by the many new laws defining everything from nutrition labelling to labour practices and competitive behavior. Perhaps it is time to focus that activism on supporting, rather than restricting business.