Expo Reveals Hope, Challenges for HK

HONG KONG (03/22/2000) - The idea of improving Hong Kong's economic competitiveness by developing the local IT industry was a primary focus at the Hong Kong Information and Infrastructure Expo and Conference 2000 (HKII Expo), held last week.

Held at the Hong Kong Convention and Exhibition Center, the HKII Expo featured more than 125 international and local exhibitors, as well as talks by industry executives from across the region on the future direction of the information technology industry and how Hong Kong should adapt itself to remain competitive. The exhibition was organized by the Hong Kong Trade Development Council and the Information Technology and Broadcasting Bureau of the Hong Kong government.

Although the mood of the Expo was hopeful, one speaker at the event identified serious challenges that could hinder development of the local IT industry.

During a speech given on the Expo's opening day, Alex Arena, group director of Pacific Century Cyberworks (PCCW), raised two concerns that he said might hinder the growth of a healthy IT sector in Hong Kong.

The first, he said, was the Chinese concept of "face."

"When I was in California, people would tell you just as proudly and, in fact, in some cases, even more proudly when they failed than when they succeeded.

They said, ‘To make a million dollars is easy, but to actually fail and learn from it is something that's very valuable,'" Arena said.

Arena pointed out that this mode of thought is foreign to Hong Kong and the way people do business here. Here, "face" is of primary importance, he said.

"We have to be prepared as business leaders to let people have a go and try to create some value. If they fail, don't overly criticize them," Arena said.

Another challenge facing the Hong Kong IT industry is the need to improve the overall quality of education, said Arena. While he was impressed that the government has made substantial investments in education, there has yet to be a "qualitative shift" in the overall education level in Hong Kong, he said.

"The lack of (high-quality) people will hold up the growth of Hong Kong's Internet economy," he said.

Arena said that PCCW's Cyberport project would help address the lack of qualified professionals. "The artificial creation of a center for the development of IT thinking and IT workers is one way to accelerate IT development in Hong Kong," he said.

During his speech at the HKII Expo, Arena also updated attendees on the progress of the Cyberport project. At present, 15 multinational IT companies have already committed to renting space at the Cyberport and more than 150 smaller companies have filed their applications, he said.

In a review of what has happened over the past year to spur the uptake of e-commerce in the SAR, Arena described the Cyberport project as the key factor in developing local attitudes toward IT and the Internet.

"Nothing seems to have galvanized attention more than that project," he said, adding that other initiatives, including the government's funding of IT education and individual startups, have also played important roles in building public awareness.

Despite the challenges that Hong Kong needs to overcome to ensure its future competitiveness, Arena said the SAR possesses qualities that make it a global force to be reckoned with, namely, the entrepreneurial spirit and capital-raising skills that Hong Kong has developed over decades as an international commercial center.

"There's no doubt about the needs of the (IT) sector (in terms of) the significant amount of capital (that needs) to be employed. By establishing itself as the international gateway for Asia's Internet marketplace, Hong Kong has already created the largest center for IT venture capital outside of Japan," Arena said.

SIDEBAR: What will the world be like in 2004?

In a speech at the Hong Kong Information Infrastructure Expo and Convention 2000 last week, David Kunkel, vice chairman and executive vice president of PSINet, looked into his crystal ball and tried to predict where the Internet revolution is taking us.

Apart from estimating the value of business transactions conducted over the Net (US$1.3 trillion by 2003), Kunkel predicted that, by 2004, 80 percent of all countries will:

· Allow maximum encryption.

· Create Internet tax-free trade zones.

· Allow Internet gambling.

· Allow Internet pornography, except for child porn.

In addition, Kunkel predicted that 2004 would see:

· 80 percent of the world's Gross Domestic Product tied to IP services.

· Flat-rate pricing dominate the telecom market, including international voice calls;· Telecom companies write off US$500 billion in outdated equipment and lay off hundreds of thousands of employees.

· Computer hardware costs reach a level equivalent to most home appliances.

-- By Winnie Lai

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