Speech by Director-General of Trade and Industry
Wednesday, December 4, 2002
Following is the keynote speech by the Director-General of Trade and Industry, Mr. Kevin Ho at the Forum "Revitalizing Entrepreneurship in Hong Kong" today (December 4)(English only):
Professor Young, Professor Reynolds, distinguished guests, ladies and gentlemen,
It is my honour to be invited to speak at today's forum.
First of all, I would like to congratulate Professor Chua and her colleagues for having accomplished the challenging task of conducting the survey on Hong Kong's level of entrepreneurial activities under the Global Entrepreneurship Monitor. This is the first time Hong Kong participates in the Global Entrepreneurship Monitor. The results of the study will provide a useful source of reference to all of us.
Hong Kong people are renowned for their entrepreneurial spirit and perseverance. However, the economic downturn and the economic restructuring process which Hong Kong has been facing and undergoing in the past few years have seemingly made Hong Kong people more prudent in starting businesses during this difficult period of time. This may explain why Hong Kong does not perform as well as we would have wished in terms of entrepreneurial activities vis-à-vis other economies under the Global Entrepreneurship Monitor.
Hong Kong has a long history and a strong tradition of entrepreneurship. Hong Kong's success is attributed largely to the entrepreneurial businessmen who have helped build Hong Kong from a small fishing village into a world-class metropolitan city. Like many other Chinese communities, the local community sees doing businesses as a promising career. In fact, the concept of entrepreneurship has been well ingrained in the mindset of individual Hong Kong people, regardless of their family background and education achievements. The private sector in Hong Kong has always enjoyed a good, if not an unequal, share of talents vis-à-vis the public sector. While not all of those in the private sector are entrepreneurs, I bet many of them would perceive starting their own businesses, however small they are, as their destiny of achievements.
Notwithstanding the caution in starting businesses in the past few years as a result of the unsatisfactory economic performance, we still see a large number of new companies being set up in recent years. In 2001/02, the Inland Revenue Department registered 90,000 new companies in Hong Kong. While existing businesses may have closed now and then, many new ones have come into existence at the same time.
Hong Kong is an ideal place for entrepreneurs. We have a favourable business environment, a level playing field, a stable macro economy, a simple and clear tax regime, an excellent and world-class infrastructure, a culture which encourages innovation and technology, a sound legal system, and an ample supply of human resources. All these are conducive to facilitating entrepreneurs to unleash creativity and do businesses in their unique ways. In fact, entrepreneurial spirit, together with innovations and technology, have been the prime driving forces of economic development in Hong Kong, bringing new vigor to the community.
To promote and encourage entrepreneurship, the Government has been helping entrepreneurs start businesses, and seedling enterprises develop and grow. A lot of efforts have been made in cutting red tape, streamlining licensing procedures, and deregulation. For example, an individual can obtain an annual business registration certificate in less than 30 minutes. Also, while all limited companies are required to prepare audited accounts, private companies, sole proprietorships and partnerships are exempted from these requirements. Moreover, it is equally easy for individuals to change and cease businesses.
Through the Trade and Industry Department (TID), the Government is providing business starters and entrepreneurs with a whole range of support services, including information, advice, and infrastructural facilities. In collaboration with 80 trade and industry associations, industry support organisations, professional bodies, and private enterprises, TID runs the Support and Consultation Centre for SMEs (SUCCESS) which, among other things, provides expert advice on a whole range of issues relating to doing businesses. Over 800 SME entrepreneurs have so far made use of the advisory service. It is also running a mentorship programme for SME entrepreneurs, providing them with one-on-one free counseling from accomplished businessmen over a period of 9 months. This year, over 200 SME entrepreneurs have participated in the Programme.
The Vocational Training Council's Business Start-up Centre provides office accommodation at a preferential rate to business starters, as well as secretariat and other support services to them. It also runs training programmes for business starters.
There are also specific support programmes for technology start-ups and technopreneurs. The Hong Kong Science and Technology Parks Corporation provides incubation services to technology start-ups to conduct R&D. Under the Innovation and Technology Fund, technology-driven companies may receive funding support up to $2 million from the Government to conduct R&D projects which have commercialisation prospect.
Late last year and early this year, TID set up four SME funding schemes at a total commitment of $7.5 billion to help SMEs, including seedling enterprises, secure loans from lending institutions to procure business installations and equipment, providing training to employers/employees, participate in export promotion activities, and enhance overall competitiveness. The four funding schemes are the SME Business Installations and Equipment Loan Guarantee Scheme, SME Training Fund, SME Export Marketing Fund, and SME Development Fund. Nearly 10,000 SMEs have benefited from these schemes, involving a total amount of government guarantee/grant of about $1.1 billion.
Recognising that the younger generation is the powerhouse of future entrepreneurs, TID supported the initiative of Shell Hong Kong Limited and the Hong Kong Federation of Youth Groups in launching the LiveWIRE Programme earlier this year. The Programme aims to promote entrepreneurship among young people, and provide mentoring to those who wish to start their businesses.
We have looked beyond Hong Kong in nurturing the entrepreneurial talents of our younger generation. Experience sharing with their counterparts from other parts of this globalised world will give much insight to our young and upcoming businessmen in charting their course ahead. Earlier this year, Professor Chua led a delegation from Hong Kong to the APEC Young Leaders and Entrepreneurs Forum in Mexico. While the trans-Pacific journey must be very tiring, I am sure the discussions in the Forum provided a lot of useful input to the Global Entrepreneurship Monitor.
The past few years have been a difficult period for Hong Kong. We see businesses shrinking and profit-margin narrowing in many business sectors. We see unemployment rate growing to an unprecedented level before it gets improving again recently. There is an apparent lack of confidence among Hong Kong people about Hong Kong's competitiveness vis-à-vis the Mainland and other economies. However, there are also a lot of successful stories of individuals whose entrepreneurial boldness and perseverance have helped them navigate the storm and scale new heights in the midst of the economic downturn. They are typical examples of Hong Kong people, and the typical examples of Hong Kong's "Can-do" spirit, which is another way of saying "entrepreneurship". I urge all of our enterprising Hong Kong people to continue to unleash their entrepreneurial spirit to rise to new challenges.