28 October 2016
The government's policy of revitalizing old industrial buildings in our city has benefited only real estate developers, not industrialists. Photo: HKEJ
The government's policy of revitalizing old industrial buildings in our city has benefited only real estate developers, not industrialists. Photo: HKEJ

What exactly is meant by ‘re-industrialization’?

One of the most noticeable tasks on the agenda of the newly established Innovation and Technology Bureau (ITB) has got to be “the re-industrialization of Hong Kong”.

So how exactly can our city be “re-industrialized”?

The government has yet to elaborate on that, but a document submitted to the Legislative Council Financial Committee by the administration in October may give us some clues.

It says one striking thing in common among the industrial reform programs in full swing in the United States, Germany and China in recent years is that cutting-edge artificial intelligence and environment-friendly technologies have become the new growth drivers in the manufacturing industries in these countries, producing “service-oriented” products through the widespread use of information technology and the Internet of Things.

If that is really the latest trend in the industrial development in the advanced world, then obviously that would be something we should aim for in the days ahead, and the degree to which we can meet this target will determine whether our “re-industrialization” process can truly bear fruit.

But how can we pull it off?

Perhaps the experience of Germany can offer us some insights into how we can develop high-value-added manufacturing industries.

The key to success in manufacturing in the internet era is no longer just producing high-quality tangible products but tangible products accompanied by the best after-sales online support.

In other words, manufacturing these days is not only about turning out products, but also about operating online service platforms.

Germany is already putting a lot of effort into testing and promoting online service platforms, a process often dubbed “industrialization 4.0”, and introducing them to small businesses.

Many German manufacturers have even sent their managers and technicians to Silicon Valley on internship to learn the latest in information technology.

As far as Hong Kong is concerned, we might not possess the kind of talent and technologies that Silicon Valley has.

However, as an international financial hub, we are at a definite advantage over other Chinese cities in providing online service platforms for mainland manufacturers, as we are among the regions with the highest broadband internet penetration rate in the world, and we enjoy a high degree of freedom of information guaranteed under the Basic Law.

However, before getting to work on “industrialization 4.0”, there is one major issue that the ITB must address promptly, which is the fact that many local entrepreneurs who wanted to move their assembly lines back to Hong Kong from the mainland have been put off by the shortage of industrial buildings in our city.

The government’s policy of revitalizing old industrial buildings across the city has in fact only benefited real estate developers, as most such properties have been renovated and rented out for anything but manufacturing use.

The surge in rents as a result has made the situation even worse for factory operators.

This article appeared in the Hong Kong Economic Journal on Nov. 30.

Translation by Alan Lee

[Chinese version 中文版]

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A Legislative Council member from the information technology functional constituency

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