Policy Address 2017: CE to lead tech steering committee

Carrie Lam, Chief Executive, Hong Kong (source: HKSAR Government)Hong Kong IT professionals generally welcomed the positive change of ICT policy direction as reflected in yesterday's Policy Address 2017 (October 11, 2017), but the key remains effective implementation. Overall, they gave an average score of 8.2 marks out of 10. (See Figure 1 below)

Given Chief Executive Carrie Lam's commitment in catching up in the "innovation and technology (I&T) race" and to become an international I&T hub, do these ICT policies reflect a more thoughtful approach to address the needs of Hong Kong's IT industry development?

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Focus on 8 ICT areas

To press ahead with I&T development, Lam pledged to personally lead "a high level, inter-departmental Steering Committee on Innovation and Technology" to examine and steer measures under eight areas of I&T development as well as smart city projects. The eight areas are: more resources for research and development (R&D), nurturing a talent pool, venture capital, scientific research infrastructure, legislation review, opening up data, government procurement and popular science education.

To ensure Hong Kong's I&T development stays competitive, the Government will form the "Chief Executive's Council of Advisers on Innovation and Strategic Development," by revamping the Economic Development Commission and the Commission on Strategic Development. This Council will advise the Government on Hong Kong's I&T development.

To boost the city's IT R&D capability, the Government has set a goal to double the Gross Domestic Expenditure on R&D as a percentage of the Gross Domestic Product (GDP), from the current 0.73% to 1.5% within the current five-year government term. In addition, the Government will provide an additional tax deduction for R&D expenditure incurred by enterprises.

In the last Policy Address, the Government earmarked HK$500 million e-government fund for public services quality enhancement. In this Policy Address, Lam proposed to transfer the Efficiency Unit from the current Chief Secretary for Administration's Office (CSO) to under the Innovation and Technology Bureau (ITB) in order to build a stronger team and to ensure better use of the fund.

Following the conclusion of the Smart City Blueprint consultation, Lam pledged to release the "Smart City Blueprint for Hong Kong" within this year, ahead of the original schedule. In conjunction, the Government will invest HK$700 million to push ahead these infrastructure projects for smart city development: "eID" for all Hong Kong residents for conducting online government and commercial transactions; multi-functional smart lampposts pilot scheme to support city-wide data and network coverage; and the construction of a big data analytics platform to support cloud services and IT adoption by government departments.

In separate interviews with Computerworld Hong Kong, three IT professionals commented on the overall effectiveness of this year's ICT policies:

Charles Mok: Welcome ICT policy change (8/10)

Legislative Councilor (IT Functional Constituency) Charles Mok noted a very different approach to I&T in yesterday's Policy Address.

"In the past, the government used to focus on either setting up new funds or constructing new buildings and science parks and so on. This time, the Policy Address focuses the most on policy changes," Mok said. "The CE is actually taking matters into her own hands by leading the Chief Executive’s Innovation and Strategic Development Group, which she will be setting up to lead the direction of all these policies and changes. This is definitely a new approach, one that I would welcome."

Mok has been advocating the setting up of "meaningful key performance indices (KPI)" for the Government itself, such as to improve the percentage of R&D in the city's GDP from the current level like 0.75% to a higher level. "This is pretty much the first time that the CE has committed to setting up such a target or KPI. And, of course, they have also mentioned some of the specific initiatives to try to make that possible which is to increase the tax deductions to 300%. Now, that obviously is quite targeted in a sense that we have been saying that if we are going to increase the R&D level, we cannot just simply rely on government input. We have to make sure that the private sector is willing to invest together. So, that policy of increasing the tax deduction is obviously a way to try to address that."

The regrouping of the Efficiency Unit to under the ITB was considered an innovative move to take an existing department that has the role of coordinating the various departments originally, but not necessarily taking only a technology focus, according to Mok. "By putting it under the ITB, that would effectively send a very strong message that, in future, government coordination and policy making must have a strong element and consideration for innovation and the use of technology. I think it is a very innovative way of helping the ITB become more effective."

IT talent cultivation has not been given its due attention, according to Mok.

"I wish that the Policy Address could address more about the re-training of existing manpower. With IT changing so quickly, a lot of people after a few years really need government support to help re-invest in their IT skills. But currently there is a severe lack of resources from the government compared to our competitors in Asia."

The previously announced injection of HK$1.5 billion into the Continuing Education Fund was considered "grossly insufficient," considering that every Hong Kong citizen's lifetime quota is still capped at HK$10,000, he added.

Mok scored the ICT policies 8 marks out of 10.

HKCS: CE is determined to bring changes through tech (8/10)

Ted Suen, president of Hong Kong Computer Society (HKCS), said yesterday's Policy Address was "definitely better than the previous one." "The Policy Address reflects a holistic approach to Hong Kong's ICT development, covering a wide spectrum of ICT areas. It is obvious that the CE has put in a lot of effort to drive the development of ICT industry," he said.

The HKCS welcomed the Government's measures prpposed to encourage R&D and talent nurturing in Hong Kong. "It is encouraging to see a specific target to double the R&D investment from 0.73% of our GDP to 1.5% within the CE's term. The development of a 'Postdoctoral Hub' and to match venture capital funding are also positive signs to show the Government's focus in technology development," said Suen.

The HKCS also welcomed the additional support given to overseas IT talents. "The Government used to focus on attracting overseas IT talent to Hong Kong but without providing adequate support facilities. The residential building at the HKSTP (Hong Kong Science and Technology Parks) can help overseas young talents that are visiting Hong Kong to develop their career in technology."

The plan to review the Government's procurement arrangement was also seen as encouraging sign. "It is good that the Government realizes the need to change this policy. Awarding government contracts based on the lowest bid has always been problematic. Bidders have been compensating technology capabilities to reach the lowest price," he said. "But the Policy Address did not specify how the arrangement will be changed. Currently, the proportion of tender reviewing criteria between pricing and technology capability is about 7:3. This proportion should be updated to 1:1."

Despite the efforts in nurturing new tech talents, Suen said the Policy Address failed to provide enough short-term solutions to address the problem of IT talent shortage. 

"The Policy Address fails to address the needs of the existing IT practitioners," he said. As businesses and the Government are all undergoing transformation, IT talents remain in hot demand. Instead of just hiring new IT talents, the HKCS sees it important that the Government assists the existing IT professionals to transform and sharpen their skills. "Continuous education and the support for the existing IT professionals have not been addressed."

Concerning the recognition of the IT professionals, Suen noted the injection of a HK$1.2billion investment in the Qualification Framework Fund, but without indicating whether the Fund covers IT practitioners. "We have been talking about developing a QF for the IT industry for years, it is time to realize this plan."

HKCS scored the ICT policies 8 marks out of 10.

iProA: Positively responded to far cried requests (8.5/10)

Witman Hung, president of iProA, also principal liaison officer of Hong Kong, Shenzhen Qianhai Authority said yesterday's Policy Address embodied abundant policies to address the IT industry's long-sought demands, such as the review of existing outdated legislation.

"We are particularly pleased to notice that the Government will review existing legislation and regulations, so as to remove outdated provisions that impede the development of I&T," Hung said.

iProA also welcomes the Government's proposal of exploring the inclusion of I&T as a tender requirement, and will not award contract based on the lowest bid. "However, a 'local innovation preferred' policy in procurement is still lacking -- unlike most other regions and countries that emphasis I&T. We sincerely hope the Government can move a further step on this," he added.

As regards the proposed "big data analytics platform," Hung welcomed it as a further step in the right direction, but the nature of it being an "analytics" platform was too specific.

"Big data platform is different from big data analytics platform," he said. According to Hung, the proper approach is to first create a big data sharing platform, and encourage the private sector especially the public utilities and the banks to participate in it by opening up their data for sharing.
As for subsequent data analytics, Hung said the Government need not perform data analytics all by itself. Tertiary institutions, startups and overseas tech companies can provide excellent expertise on data analytics.

"There is now an open parking platform in Shenzhen, which allows multiple apps to tap on the same parking data. Let the business tap on the open data, let them compete, and they can create more innovation," Hung concluded.

iProA scored the ICT policies 8.5 marks out of 10.