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Hong Kong manufacturing research presented

The authors of "Made by Hong Kong" discussed their research and drew generally upbeat conclusions at a China Forum session last Friday (September 19).

The report, published by Oxford University Press, is based on 516 visits to 350 Hong Kong companies and organizations by 12 senior MIT researchers aided by 10 student researchers over the course of a year. Professors Richard K. Lester and Suzanne Berger edited "Made by Hong Kong." Professor Lester of nuclear engineering is the director of the MIT Industrial Performance Center. Professor Berger of political science heads the MIT International Science and Technology Initiative.

While the research was done before Hong Kong reverted to Chinese sovereignty on July 1, the effect of the changeover was a prime consideration in drawing conclusions and making recommendations.

Hong������������������Kong's future depends on its ability "to maintain its identity as a distinct economic environment where the rule of law is upheld," Professor������������������Lester told the China Forum audience. "Perhaps, in time, the mainland will come to resemble Hong Kong in the workings of its economy. But until then, both Hong Kong and the rest of China will benefit from efforts to preserve and even strengthen Hong Kong's distinctiveness."������������������������������������

One of the researchers, Professor Charles G. Sodini of electrical engineering and computer science, noted that the benchmark for judging success in Hong Kong - "if you're making money, you're doing fine" - isn't likely to be affected by the changeover. In fact, Professor Sodini, who returned from a sabbatical in Hong Kong last month, noted that the Chinese are more capitalistic than people in the West think, citing the bustling economy of south China as an example.

Another researcher, Victor Zue, associate director of the Laboratory for Computer Science, said many Hong Kong successes in information technology are "the result of good symbiosis with China." He hopes the government will play an active role in promoting industry and education. "When the government steps in, they can be very effective," said Dr. Zue, noting the effectiveness of its anticorruption campaign.

"Made by Hong Kong" calls for the business, government and the educational communities to dedicate themselves jointly to developing strategies and resources in six vital areas:

  • Strengthening the capacity to create new products and processes
  • Upgrading the capabilities of the industrial workforce
  • Strengthening the public institutions of "safe harbor"
  • Increasing the rate of formation of technology-based enterprises
  • Increasing government's technological competence
  • Strengthening the capacity to acquire and absorb technical knowledge from the West and the People's Republic.

Several recommendations made in the report are already under active discussion, including plans to create a second stock exchange to encourage venture investment in technology based enterprises, and creating a decentralized "virtual" science park. Programs are also being introduced in universities to coordinate research with the needs of the economy and industry.������������������

The report notes that the Hong Kong economy's traditional strength has shifted rapidly from products "made in Hong Kong" to those "made by Hong Kong." Industry now contributes 9.3 percent of the territory's gross domestic product, compared to 23 percent 13 years ago. But the report points out "Hong Kong firms make goods through long production chains that may start in Hong Kong but use manufacturing sites in the Pearl River Delta, further inland and beyond; in Indonesia, the Philippines, Burma (Myanmar), Malaysia, Mauritius, Africa, and more recently even in Latin America."

The research was sponsored by the Hong Kong Industry and Technology Council, the Better Hong Kong Foundation, the Hong Kong Trade Development Council, the Chiang Family Foundation, and the Hong Kong Industrial Technology Centre Corp. It was coordinated by the Hong Kong Government Industry Department and the Hong Kong Productivity Council.

Other MIT senior researchers who contributed to the project were Alice H. Amsden, the Ellen Swallow Richards Professor of Political Economy; Professor Rafael Reif of EECS, director of the Microsystems Technologies Laboratories; Institute Professor Daniel I.C. Wang, director of the Biotechnology Process Engineering Center; and former Assistant Professor Andrew B. Bernard of the Department of Economics, now at Yale University.

A version of this article appeared in MIT Tech Talk on September 24, 1997.

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