Asia's Computer Challenge: Threat or Opportunity for the United States & the World?

By Jason Dedrick; Kenneth L. Kraemer | Go to book overview
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local industry in wireless devices, and companies such as VTech have used Hong Kong as a base for developing products for international markets.

Hong Kong has not announced an official NII strategy, but OFTA did release a position paper saying Hong Kong should be promoted as a regional telecommunications hub. This means: (1) being a physical switching center; (2) being a center for software and content distribution, for example, publishers based in Hong Kong will use electronic publication for distribution; and (3) attracting more business to Hong Kong to take advantage of Hong Kong's information infrastructure. 61 Hong Kong has been quick to jump on the Internet, with nearly 100 Internet service providers operating in the territory as of early 1997 and a higher rate of Internet use than in the other three NIES.

While each of the Asian NIEs (plus Malaysia) has set a goal of becoming a regional communications hub, Hong Kong is in the best position to do so, and it is already a switching hub for hundreds of MNCs' private networks. The only serious competitor to Hong Kong as a communications hub is Singapore, but Hong Kong's advantage is the presence of strong competition in the local market and its proximity to China.

Policy Coordination. In contrast to Singapore's highly coordinated efforts to promote computer production and use, Hong Kong's policies have lacked any overall strategic direction. There is little effort to integrate policies for industry promotion, education, R&D, and computer use, nor is there any government body with the responsibility or authority to do so.

Hong Kong's policies toward the computer industry have been the result of the individual initiatives of different government agencies. Industry promotion has been carried out mainly by the Industry Department, government computerization is managed by ITSD, while telecommunications are regulated by OFTA. Several councils, such as the Vocational Training Council, the Hong Kong Productivity Council, and the Industry and Technology Development Council are also involved in various aspects of computer policy. But the lack of policy coordination has reduced the impact of even these limited efforts.


Hong Kong's position in the computer industry is a result of its role as a gateway to China and its linkages to the global computer industry. Hong Kong's strengths and weaknesses in the computer industry are closely related to its industry structure, which now consists mainly of companies with manufacturing operations in Southern China. Hong Kong has lost much of its manufacturing base; it is now mainly a center for finance, trade, and distribution for the computer industry.

However, unlike Singapore--which likewise is moving towards a service- based economy--Hong Kong has not developed strong design and engineering capabilities, except in certain products such as wireless communications. There are only a few exceptions such as VTech, which has a strong R&D base


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