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Presentation toPresentation to Hong Kong Information Hong Kong Information Technology FederationTechnology Federation

Mr. Henry TangSecretary for Commerce, Industry and Technology 7 August 2002

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Commerce, Industry and Technology Bureau

Merger of “Commerce & Industry” Merger of “Commerce & Industry” and “Technology”and “Technology”

IT – a crucial part of the IT – a crucial part of the “Technology” portfolio“Technology” portfolio

““Technological innovation”, “IT” & Technological innovation”, “IT” & “SME support ” all under one roof“SME support ” all under one roof

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Problems facing IT industry

Bursting of dot.com bubbleBursting of dot.com bubble

Slowdown of economySlowdown of economy

Private sector IT budget tightenedPrivate sector IT budget tightened

Venture capitalists more cautiousVenture capitalists more cautious

Increasing competitionIncreasing competition

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Government support to Government support to IT industryIT industry

Four specific areas to focus onFour specific areas to focus on

1) Government investment in IT1) Government investment in IT

2) Quality of service2) Quality of service

3) Explore new markets3) Explore new markets

4) Wider use of IT in the community4) Wider use of IT in the community

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Government investment in ITGovernment investment in IT

$1.75 billion capital expenditure earmarked for 20$1.75 billion capital expenditure earmarked for 2002-0302-03

Adopt a vigorous outsourcing strategyAdopt a vigorous outsourcing strategy

$1.2 billion or 80% IT projects outsourced in 2001$1.2 billion or 80% IT projects outsourced in 2001

Break up Government projects into separate partBreak up Government projects into separate parts and categories to encourage SME participations and categories to encourage SME participation

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Quality of serviceQuality of service

Quality standard becomes increasingly Quality standard becomes increasingly importantimportant

Encourage adoption of ISO, CMMEncourage adoption of ISO, CMM

Roll out web site to showcase IT Roll out web site to showcase IT excellenceexcellence

Actively participate in international IT Actively participate in international IT awardsawards

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Make use of MOU signed with IT advMake use of MOU signed with IT advanced countriesanced countries

Lead HK delegation to take part in intLead HK delegation to take part in international IT events, e.g. CeBIT, Softernational IT events, e.g. CeBIT, Softworld in Canadaworld in Canada

Explore Mainland market, with focus Explore Mainland market, with focus on Pearl River Deltaon Pearl River Delta

Explore new marketsExplore new markets

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Wider use of IT at community levelWider use of IT at community level

60% PC household penetration60% PC household penetration

50% Internet household 50% Internet household penetrationpenetration

86% mobile penetration86% mobile penetration

Running IT awareness courses Running IT awareness courses and providing IT access at and providing IT access at community levelcommunity level

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Wider use of IT in business Wider use of IT in business communitycommunity

$20 million from SME Development Fu$20 million from SME Development Fund allocated to drive IT adoption in SMnd allocated to drive IT adoption in SMEsEs

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The way forwardThe way forward

Listen to local IT industryListen to local IT industry

Actively meet with IT bodiesActively meet with IT bodies

Work together with IT industry to drive Work together with IT industry to drive Hong Kong’s economic Hong Kong’s economic transformationtransformation

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Thank YouThank You