1. 1 Presentation to Hong Kong Information Technology Federation Mr. Henry Tang Secretary for Commerce, Industry and Technology 7 August 2002

2. 2 Commerce, Industry and Technology Bureau Merger of “Commerce & Industry” and “Technology” Merger of “Commerce & Industry” and “Technology” IT – a crucial part of the “Technology” portfolio IT – a crucial part of the “Technology” portfolio “Technological innovation”, “IT” & “SME support ” all under one roof “Technological innovation”, “IT” & “SME support ” all under one roof

3. 3 Problems facing IT industry Bursting of dot.com bubble Bursting of dot.com bubble Slowdown of economy Slowdown of economy Private sector IT budget tightened Private sector IT budget tightened Venture capitalists more cautious Venture capitalists more cautious Increasing competition Increasing competition

4. 4 Government support to IT industry Four specific areas to focus on Four specific areas to focus on 1) Government investment in IT 1) Government investment in IT 2) Quality of service 2) Quality of service 3) Explore new markets 3) Explore new markets 4) Wider use of IT in the community 4) Wider use of IT in the community

5. 5 Government investment in IT $1.75 billion capital expenditure earmarked for 2002-03 $1.75 billion capital expenditure earmarked for 2002-03 Adopt a vigorous outsourcing strategy Adopt 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 parts and categories to encourage SME participation Break up Government projects into separate parts and categories to encourage SME participation

6. 6 Quality of service Quality standard becomes increasingly important Quality standard becomes increasingly important Encourage adoption of ISO, CMM Encourage adoption of ISO, CMM Roll out web site to showcase IT excellence Roll out web site to showcase IT excellence Actively participate in international IT awards Actively participate in international IT awards

7. 7 Make use of MOU signed with IT advanced countries Make use of MOU signed with IT advanced countries Lead HK delegation to take part in international IT events, e.g. CeBIT, Softworld in Canada Lead HK delegation to take part in international IT events, e.g. CeBIT, Softworld in Canada Explore Mainland market, with focus on Pearl River Delta Explore Mainland market, with focus on Pearl River Delta Explore new markets

8. 8 Wider use of IT at community level 60% PC household penetration 60% PC household penetration 50% Internet household penetration 50% Internet household penetration 86% mobile penetration 86% mobile penetration Running IT awareness courses and providing IT access at community level Running IT awareness courses and providing IT access at community level

9. 9 Wider use of IT in business community $20 million from SME Development Fund allocated to drive IT adoption in SMEs $20 million from SME Development Fund allocated to drive IT adoption in SMEs

10. 10 The way forward Listen to local IT industry Listen to local IT industry Actively meet with IT bodies Actively meet with IT bodies Work together with IT industry to drive Hong Kong’s economic transformation Work together with IT industry to drive Hong Kong’s economic transformation

11. 11 Thank You