Hong Kong's CyberPort: do government and high tech mix?

• Author: Ostrov, Benjamin C.

Do you see a man who considers himself wise? There is more hope for a fool than for him.

--Proverbs 26:12

About three and a half years ago, Hong Kong's CyberPort was launched with great fanfare and high expectations. It was to be a site that would serve as a hub for a constellation of companies engaged in high technology, especially information technology. However, the project has experienced a number of unexpected significant difficulties. My hypothesis is that these difficulties are rooted in the problematic way in which knowledge considered relevant to the policymaking process was conceptualized.

CyberPort was announced in March 1999 ("`Cyberport' Proposed in Telegraph Bay" 1999). It would be launched by a new company, Pacific Century Cyberworks Ltd. (PCCW), with Hong Kong government support. The company had just been founded by Richard Li, son of Hong Kong's wealthiest individual, Li Ka-Shing. Contrary to the usual practice, the Hong Kong government sold PCCW the land for the CyberPort without allowing other tenders. Nevertheless, PCCW is currently in financial straits. Its share value has dropped significantly, and its debt has increased as loans to purchase other properties, such as Cable & Wireless HKT, have been taken out (Beveridge 2000). PCCW has finished constructing roads and bridges, but as of autumn 2000 it had yet to put up the office buildings and apartments that were supposed to begin operation in late 2001 (Beveridge 2000) but ultimately did not. Instead, according to a Hong Kong government press release, CyberPort, still unfinished, would open in April 2002 and take in its first tenants. Completion is not expected until the end of 2003. At that time, "the Cyberport will be able to accommodate over 100 IT [information technology] and IT related companies" ("Excellent Mobile Services Offered in Cyberport" 2002). This outcome will take some doing because, as of May 2001, only fifteen tenants had been found ("Transcript" 2001).

These difficulties have been compounded by a disadvantageous competitive position. At the time the CyberPort was announced, Swire, a rival of PCCW, already had buildings and office space available for a site dedicated to firms engaged in information technology. This "SwirePort" is approximately six times bigger than the eventual PCCW CyberPort will be (Phoon 2000).

It would seem not merely in retrospect but at the time of the decision that the Hong Kong government's backing of PCCW's CyberPort plan was a mistake. The root of this error can be found in an inappropriate epistemology.

Policy

The problem of epistemology has two dimensions: how knowledge is conceptualized and what impact power has on this process. I consider first the mode by which knowledge was conceptualized in the case at hand.

It is apparent in this case that Hong Kong government policymakers acted under a series of assumptions. First, they assumed that they could identify and define societal goals. Second, they assumed that they could determine the best means for achieving these goals. This view rests on the presumption that these administrators could gather complete information on policy problems and act accordingly. They sought little input from the public. The one notable exception was PCCW's founder, Richard Li.

Policymakers acted in this fashion because they view policymaking as a science that is the preserve of a trained administrative cadre. The cadre's elite university social science training, highly selective recruitment, and continued training reinforce this administrative culture. Such people's mindset can be seen in the thinking of Chau Tak-hay, Hong Kong's secretary for trade and industry. Without seeking information from Hong Kong sources outside the government, he anticipated the problem of an inadequate knowledge base and formulated a solution (Chau 1999). Oddly enough, though, this insight appears to have come from information he and others in the Hong Kong government sought overseas.

Policymakers appear to have looked to Singapore, Malaysia, the United States, Australia, and Europe for insight. A Web site that appears to be a joint government/PCCW production reveals their awareness of these examples (Hong Kong Cyber-Port 2000). Oddly enough, however, the Web site omits coverage of the state from which Hong Kong policymakers appear to have gleaned the most insights--Israel.

A group of critical actors in the policymaking process in this case, including Hong Kong's chief executive Tung Chee-Hwa and Richard Li made an official trip to Israel in February 1999. Tung visited the Weitzmann Institute, among other places. He was interested in biotechnology and high technology. Tung was also interested in particular in the Israeli concept of a government-academia-industry partnership and government-funded research, especially as it relates to the establishment of technology incubators where "new ideas are baked into commercial products" ("CE to Mull Over Israel's High-Tech Approach in Hong Kong" 1999). Furthermore, prior to this visit, Israel's chief scientist Orna Berry went to Hong Kong to discuss these issues ("CE in Jerusalem for Landmark Visit to Israel" 1999; "CE to Mull" 1999; Chau 1999; "Day of In-depth Briefings on Israeli High-Tech for CE" 1999). The Hong Kong government then translated many of these interests into emphases within its policy to promote high technology.

The gathering and processing of information led Hong Kong's policymakers to propose several measures to deal with the knowledge-base inadequacy. According to Chau (1999), "the Chief Executive ... laid down his vision of developing Hong Kong into an innovation centre for Southern China and beyond." This vision can be seen in the Commission on Innovation and Technology's final report to the Hong Kong government. The major proposals of this report were:

(a) the establishment of a standing advisory body reporting to the Chief Executive and a policy group headed by the Financial Secretary so as to strengthen the formulation, coordination, and implementation of policy on innovation and technology;

(b) the merging of the Hong Kong Science Park, the Hong Kong Industrial Technology Centre Corporation, and the Hong Kong Industrial Estates Corporation so as to achieve better synergy among the various components of our technological infrastructure;

(c) the relaxation of present immigration restrictions to enable talents from the Mainland to work in Hong Kong; and

(d) the fostering of an innovation and technology culture through an expansion of the existing incubation programme and the provision of matching grants for technological ventures undertaken by entrepreneurs. (Chau 1999)

These points compose the essential elements of a policy that anticipated the knowledge-base problem and aimed to solve it. Hong Kong consequently established a $5 billion Innovation and Technology Fund to finance projects that contribute to the upgrading of innovation and technology. It is also establishing the Applied Science and Technology Research Institute. Liberalized immigration requirements for Chinese with the requisite skills from the mainland also have been proposed.

According to Hong Kong's then financial secretary (and current chief secretary) Donald Tsang, "the CyberPort [would] also generate demand for support services such as accounting, legal and other back-office functions. Most important, the CyberPort [would] provide quality products to upgrade our current economic activities and enable us to reach out to the limitless cyber market." Tsang also mentioned the importance of expanding the pool of talent to enhance competitiveness and of promoting the development of technology-based industries. He said the government would set up a special task force to review Hong Kong's immigration policy critically in order to facilitate the inflow of talent. "In particular, the Task Force will consider how best to remove restrictions on scientists and highly-skilled technologists from the Mainland entering Hong Kong to work." The task force comprised representatives from the Security Bureau, the Education and Manpower Bureau, the Trade and Industry Bureau, the Immigration Department, and the Industry Department. It was to complete the review and put forward implementation proposals in six months ("Cyberport Proposed" 1999).

These measures apparently came to naught. According to Francis Ho, commissioner for innovation and technology and one of those who formulated these policies, "information technology applicants [for funding] have declined [in quality]" (Levander 2000). He added that he may set narrow areas for funding in order to help focus scattered efforts. Furthermore, Hong Kong's research labs suffer from a dearth of ideas worth funding. This critique, the latest blow to Hong Kong's tarnished image as a technology center, originated in a confidential report issued by the Hong Kong $5 billion (U.S.$641 million) Innovation and Technology Fund.

These dismal reflections on Hong Kong's knowledge-base are not surprising, considering the quality of its rote-learning-oriented educational system. In 1999, 18 percent of the students taking the major public examination at the conclusion of their secondary-school studies failed to obtain a passing grade. They were deemed unfit for further study and unemployable ("Education in Hong Kong" 2002). At the tertiary level, 30 to 50 percent of the students, according to many professors, are unfit for university study and should be ejected. Furthermore, employers in the private sector often complain about the poor quality of university graduates (Shaw 2002). (1) Clearly, the policy experts of the Hong Kong government have assessed the quality of the territory's knowledge base incorrectly.

The mentality of policymaking as a science best left to experts is demonstrated by Secretary for Trade and Industry Brian Chau. In a speech to the Israeli Chamber of Commerce of Hong Kong, Chau revealed the Hong Kong...