HONG KONG 2005

The Government is committed to keeping Hong Kong at the forefront of information and communications technology (ICT) development. The Digital 21 Strategy, first issued in 1998 and updated in 2001 and 2004, is the blueprint for ICT development in Hong Kong. Since the launch of the strategy, great strides have been made in putting in place the right environment, infrastructure, skills and culture to encourage the development and adoption of ICT by the whole community.

To keep pace with the rapidly changing technological developments, the Government will embark on a review in 2006, with a view to publishing the fourth Digital 21 Strategy in early 2007.

The Government is committed to providing the necessary infrastructure for e-business to prosper and, to that end, the Electronic Transactions Ordinance (ETO) was enacted in 2000 and updated in 2004 to provide a legal framework for the conduct of secure electronic transactions.

There are now one public and two private certification authorities (CAs) recognised under the ordinance, which issue digital certificates for use by the community to conduct electronic transactions in a secure manner. Since 2003, the public CA, the Hongkong Post Certification Authority (HKPCA), has offered smart identity card holders a year's free use of its digital certificates. As at year-end, 1 232 000 free e-Certs have been issued to smart identity card holders. A critical mass of digital certificate holders is being built up, providing incentive for the industry to develop further applications and services using digital certificates.

In 2004, the Government launched sector-specific programmes in collaboration with the information technology (IT) sector and relevant trade associations to enhance IT capabilities and hence the competitiveness of small and medium-sized enterprises (SMEs) in six business sectors — travel agents, private medical doctors, drugstores, logistics, accounting and beauty services providers. The programmes will be expanded to cover other sectors in the 2006. The Government also works with industry support organisations to provide generic programmes including technical support, advisory services, financial support and training to encourage and assist the business sector, especially SMEs, to adopt e-business for better efficiency and productivity.

The local IT industry is an important segment of Hong Kong's economy, and IT is a major driver of economic growth. The Government has introduced a wide range of measures to promote its development into a vibrant, competitive and innovative industry. These measures aim to expand business opportunities, improve the quality of service, build capability and provide financial and infrastructural support.

By outsourcing government IT projects and promoting the use of IT in business and the community, a market of sufficient size has been created to support and encourage the growth of the local industry. The Government will continue to assist the industry to explore business opportunities on the Mainland and in overseas markets. It has also established funding schemes to assist local software companies to achieve international standards and support research and development projects.

Under the second phase of the Closer Economic Partnership Arrangement concluded in August 2004, it was agreed that Hong Kong service suppliers should be allowed to apply for computer information system integration qualification certification in accordance with the provisions of the relevant Mainland rules and regulations with effect from January 1, 2005. A one-year transitional period, during which certain application criteria under the existing regulations were relaxed for Hong Kong service suppliers, took effect on January 1 and was extended for another year until the end of December 2006 The Ministry of the Information Industry of the Central People's Government granted the System Integration Qualification Certificate to two Hong Kong companies in 2005. The Government will continue to consult the industry on further liberalisation of trade in IT-related services between Hong Kong and the Mainland.

E-government is an integral component of the Government's overall IT strategy. Building on the solid foundation laid down in the past few years, Hong Kong has launched the next wave of e-government under the 2004 Digital 21 Strategy.

Following its vision of using IT to provide customer-centric services that promote an accessible, accountable and efficient government, and contribute to Hong Kong's position as a leading digital city, the Government is pursuing the following key priorities under the next wave of e-government development:

In 2005, Hong Kong continued to gain international recognition for its e-government efforts. In the 2005 e-Readiness rankings released by the Economist Intelligence Unit (EIU) in April, Hong Kong was ranked first in Asia Pacific and tied with Finland to rank sixth in the world.

The Government is committed to creating an environment where a well-qualified IT workforce can flourish and meet the needs of the community. It has run an annual sponsorship scheme for an IT exchange programme since 2002 which aims to expose Hong Kong students to the digital world and encourage tertiary institutions to organise IT-related exchange programmes with overseas or Mainland institutions A government-funded pilot digital entertainment internship programme was launched by the Cyberport in April to enable graduates to gain practical working experience through attachment to local digital entertainment companies. The Government also funded the setting up of the Cyberport Digital Entertainment Incubation-cum-Training Centre with the aim of nurturing digital media artists, producers and entrepreneurs.

The Industry Training Advisory Committee for the IT industry was formed in July to develop, maintain and update training specifications and standards. It will also strengthen the link between the industry and the vocational education sector with the aim, ultimately, of producing a better equipped and more productive and competitive workforce. The Government will continue to work with the academic sector and the IT industry on longer term measures to ensure that the IT workforce meets the local manpower needs and enhance the competitiveness of Hong Kong in the globalised market. Where necessary, talented persons and professionals in IT from elsewhere, including the Mainland, may be admitted to Hong Kong to fill gaps or shortages in specific areas.

The Government encourages citizens to use IT to enhance their competitiveness and quality of life. It will continue to organise various activities and initiatives to promote wider adoption and raise public awareness of IT in the community. The Digital Solidarity Fund which is jointly operated by the Government, the social services sector and the private sector, was set up in December 2004 with the backing of the Government. The fund provides financial support for digital inclusion programmes and engages different stakeholders in designing and implementing digital inclusion strategies for Hong Kong. The Government injected $1 million into the fund in 2004-05 and it also received an additional $750,000 from commercial sponsors. In 2005, six projects, which were selected out of 58 applications, received $1 million from the fund to support various activities to bridge the digital divide. Other initiatives to build a computer and Internet-literate society included district IT promotion activities, a dedicated website, radio programmes and 'infotainment' TV programmes that disseminate information on the Government's IT initiatives and latest developments in IT. Free IT awareness courses also provided basic training to different sectors of the community. Over 5 300 computers with Internet connection are available across Hong Kong for free use by the public. All government websites comply with internationally recognised web accessibility guidelines to facilitate access and navigation by people with visual disabilities.

Hong Kong has concluded cooperative arrangements (Memoranda of Understanding/MOU) in information and communications technology (ICT) with 11 countries since 1998 — Canada, Finland, France, Germany, Ireland, Israel, Italy, Japan, the Republic of Korea, the Netherlands, and the United Kingdom. The MOU with Finland expired in January and it was later renewed for another five years. The Government has organised mutual visits, information exchange activities and cooperation programmes with these partners to promote and support inter-governmental exchanges, business partnerships and investment cooperation in the areas of IT and telecommunications.

Located at Telegraph Bay in the Southern District of Hong Kong Island, Cyberport aims to create a strategic cluster of quality IT and IT-related companies and professionals. Cyberport is wholly owned by the Government through three private companies set up under the Financial Secretary Incorporated.

Cyberport comprises a comprehensive commercial development with about 95 000 square metres of Grade A office space, a shopping arcade and a five-star hotel. The commercial portion was completed in June 2004. The final phase of the ancillary residential development is due to be completed by 2008.

Tenants of Cyberport are admitted based on the advice of a committee of local and international experts. By the end of 2005, 49 tenants had signed leases, taking up 54 per cent of the available office space. These include local, Mainland and overseas companies specialising in IT applications, information services and multimedia content creation.

Cyberport is becoming one of the major venues for IT and digital entertainment-related conferences in Hong Kong and Asia. By year-end, 442 events had been held at Cyberport, with about 76 361 participants taking part. These included 237 regional and local conferences, 86 product launching ceremonies, exhibitions and entertainment events. The second Digital Entertainment Leadership Forum, the second Cyberport Venture Capital Forum and the first Cyberport Games Marathon were among the more prominent events held in 2005.

Cyberport also contributes to technological development in Hong Kong and provides the necessary infrastructure and technical support for SMEs. The Digital Entertainment Industry Support Centre was opened in May to provide a one-stop support service to help local SMEs make use of the resources available from the Government, industry and academic institutions. The Hong Kong Wireless Development Centre, opened in December 2003, launched the 3G Cyberport project in October 2004 to support the development of local 3G applications, provide training for developers and promote 3G applications to the public. Such services, together with other facilities in the Cyberport such as the Digital Media Centre and the iResource Centre, provide vital support for the continuous development of the local ICT industries, including the digital entertainment and wireless application development industries. It is particularly important for SMEs that cannot afford the initial investment in expensive equipment and lack access to useful resources and business information.