Supporting the free market: Information technology policy in Hong Kong

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Abstract
Economic policy in Hong Kong is frequently cited as a shining example of the laissez‐faire model for development, with minimal government intervention. However, the government has played a bigger role in the economy than is often recognized, responding to market failures, social problems, and the needs of the business community. Information technology (IT) policy in Hong Kong has mirrored the colony's laissez‐faire economic strategy, with little government effort to promote the production or use of IT products and services. Hong Kong has become an advanced user of IT in several economic sectors and an assembly site for personal computer hardware. However, like much of the manufacturing sector, the computer industry is moving much of its production to China, causing concern about the future of Hong Kong's economy. While some people feel that Hong Kong can flourish as a financial and business services center, others feel that this role will be diminished as the Chinese economy liberalizes and other centers develop in mainland China. They argue that Hong Kong needs to upgrade its technological capabilities and develop technology‐intensive activities such as R&D and software development to complement China's manufacturing activities. The government has begun to respond with limited measures to encourage R&D, train more scientists, engineers, and managers, and support technology start‐ups. Hong Kong has the potential to develop software and information services industries to serve the Chinese market. It also can apply IT to other sectors to maintain its leadership as a financial, business services, transportation, and communications center.

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