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Practical Steps towards turning Hong Kong into a
Knowledge Based
Economy
By Stephen Selby, Director, Intellectual Property Department, HKSAR Government and
Convenor of the APEC Intellectual Property Rights Experts' Group
Tuesday, May 13, 2008
The 2007 APEC Leaders' statement issued on 9th September 2007 included the
following text:
"[Leaders]… agreed to continue to strengthen protection and enforcement of intellectual
property rights (IPR) in the region. We recognised that a strong knowledge based economy
requires a comprehensive and balanced IPR system, as well as an environment that encourages
creativity and innovation and provides the tools for successful management and utilisation of
IPR. We also agreed to continued efforts by APEC economies to combat the sale of counterfeit
and pirated goods at markets involved in this activity."
What are the implications of the APEC “Self-initiated Innovation” and “Self-
Statement? initiated IP Rights”.
This high-level statement indicates that
the APEC Leaders recognise the This leads to the question of what Hong
importance of IP rights and of fostering a Kong can specifically do to encourage
business climate in which they are creativity and innovation and provides
respected and effectively exploited as two the tools for successful management and
of the pre-requisites for performance in utilisation of IPR.
the knowledge based economy.
Has Hong Kong fully exploited its unique
Hong Kong, both as a developing position in the China and APEC Contexts?
knowledge city and as a bridge between Perhaps the key questions we should ask
China and the western world, possesses are:
advantages that can be leveraged to 1. Does Hong Kong have what it takes
consolidate our position as one of the to become a true knowledge city?
knowledge economy leaders in the region. 2. We talk about developing creative
However, there are also certain gaps industries and a knowledge-based
which need to be addressed. economy; but are we able to explain
to the business community how that
Closely related to the APEC Leaders’ can be achieved?
Statement on IPR are the wishes express in 3. Have we properly appreciated the
Mainland’s 11th Five Year Plan to create increased business risk associated
Asia Pacific Intellectual Capital Centre White Paper #1 (August 2008)
© Asia Pacific Intellectual Capital Centre 2008 All Rights Reserved

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with developing creative, knowledge 1. Creating the best environment for
based products, and are we prepared value creation and networking right
to lead business through the basic inside individual enterprises rather than at
steps that are vital to mitigating those the macro level.
risks? 2. Assembling and demonstrating the
4. Should we help develop practices that tools for managing intellectual assets
make full use of Hong Kong’s unique and IPR.
advantages, including the rule of law 3. Creating awareness among business
and its international networking people of the opportunities and risks
capability that will have strong posed by the developing knowledge
influence on economic transformation economy both in Hong Kong and in
of Hong Kong and China? overseas markets, and issuing a “call
to action”.
The advantages which Hong Kong 4. Leveraging the know-how in
possesses among others are a long managing intellectual capital
established rule of law (including IP law (including IPR) that is available today
dating back to 1873), a practical from the leading world practitioners.
understanding of business from both a
Chinese and a Western perspective, a Practical initiatives undertaken in Hong
strong entrepreneurial spirit, a well Kong and mainland China
developed modern transport system and a To build on its already advantaged
state-of-the-art internet infrastructure. situation, Hong Kong needs to tap into the
These attributes all encourage the worldwide network of activities in
interplay of people with ideas and foster innovation and the mining of intellectual
innovation. capital. This work has already started; but
it must be deepened and accelerated.
To support this position, Hong Kong has
invested heavily in universities and the If Hong Kong is to become a leader in
Hong Kong Science and Technology Park innovation, the fast track to achieving this
(HKSTP) and other HKSAR Government goal is through espousing and promoting
sponsored research centres. However this Intellectual Capital Management (ICM).
may not be enough to allow Hong Kong to
reach the forefront of the knowledge age What is ICM?
because these initiatives do not filter Some individuals are born creative
down to the day-to-day management geniuses; but most enterprises can
level of the great majority of Hong Kong develop creative talent and innovation
SMEs operating in Hong Kong and the through training. ICM is a set of tools,
Mainland. which allows enterprises to tap into
reservoirs of knowledge and expertise that
Further issues need to be addressed before they already possess, but may not be
Hong Kong can become a leader in the exploiting effectively. It also helps them to
fields of: appreciate competitive pressures from
Asia Pacific Intellectual Capital Centre White Paper #1 (August 2008)
© Asia Pacific Intellectual Capital Centre 2008 All Rights Reserved

3. 3
outside economies and identify their manufacturing and service sectors.
needs to obtain improved knowledge and
expertise (sometimes known as Even if the exercise does not immediately
developing “social intelligence”.) identify any potential money-spinners for
some small enterprises, the techniques for
In outline, the process involves: identifying risks and developing an IP
• Analyzing existing enterprise strategy help enterprises save money and
knowledge, recording it as far as effort that result from dealing with IP
possible and making it sharable within infringement later on. They will help
the enterprise. This becomes the strengthen Hong Kong’s IP compliance
enterprise’s ‘intellectual capital’; and develop robust supply-chain
• Identifying possible sources of management, ensuring that our products
revenue that could be extracted from and service continue to gain ready access
existing intellectual capital and to world markets.
developing marketing plans for them;
and Developing the Intellectual Capital
• Assessing risks involved in protecting Management Concept in Hong Kong
the enterprise’s intellectual assets and There needs to be more focus in Hong
using an effective intellectual property Kong on Intellectual Capital Management.
strategy to minimize business risk. We need to enter into a deeper and
broader dialogue with the other World IC
Another View of Intellectual Capital
TOWARDS INNOVATION
Intellectual Knowledge & Innovation
Intellectual
Assets Know-How
Property
(Intellectual
Capital)
From the enterprise’s point of view, this is
an extremely cost-effective way to start off Centres.
on the road towards innovation and
creativity. It can be applied to both the The development of this type of centre in
Asia Pacific Intellectual Capital Centre White Paper #1 (August 2008)
© Asia Pacific Intellectual Capital Centre 2008 All Rights Reserved

4. 4
Hong Kong is essential in order to provide
the tools for successful management and Individuals, business enterprises,
utilization of Intellectual Capital and IPRs. government and non-government
In today’s world, the way in which organization in Hong Kong and are
knowledge is created and used is invited to lend endorsement and practical
inextricably linked with an understanding level support for this initiative in the form
of ICM and how intellectual capital is of:
created and used. The technique 1. Working with the APICC, Intellectual
developed in the USA and Europe in the Property Department, Scottish
period 1990 – 2000 links ICM to the core Intellectual Assets Centre and other
business processes and IP Strategies of similar centres in mainland China
major multinational corporations. Recent and around the world in the
developments in Intellectual Capital “Knowledge Economy” initiatives.
Management extend this approach to This initiative could be widely
include training, coaching and defined as value creation and value
management of knowledge workers in extraction through: promoting
Small and Medium Enterprises. innovation, technology development,
technology transfer and provision of
The creation of such a network of Intellectual Capital Management as
facilitation centres throughout China is management level tools to
already a work-in-progress. enterprises.
2. Providing the management focus,
An agreement has been signed between physical space, administrative and
the Scottish Intellectual Asset Centre (the other infrastructure support and
first such center ever created) and the Asia focus to support the Intellectual
Pacific Intellectual Capital Centre (APICC) Capital Management (ICM) initiatives
in Hong Kong. within your own company or
organization.
The APICC will be affiliated to a number 3. Participating as industry partners to
of Intellectual Capital Centres in mainland the training and education
China and around the world. The programmes, research groups and
Network would build on local Hong Kong workgroups to be initiated by the
expertise, access and translate the pool of Intellectual Property Department and
knowledge available across the world1 to APICC.
meet the needs of Hong Kong enterprises
operating in Hong Kong and mainland For more information, please contact:
China. Asia-Pacific Intellectual Capital Centre
Tel: +852 2503-1383
1
E.g. METI Protocol for IA Based Management, IA Centre
Fax: +852 2503-3645
Scotland Diagnostic Tools, InHolland University Degree
Website: http://www.apicc.asia
Course in Sustainable Programme in Intellectual Capital
e-mail: info@apicc.asia
Education, etc.
Asia Pacific Intellectual Capital Centre White Paper #1 (August 2008)
© Asia Pacific Intellectual Capital Centre 2008 All Rights Reserved