XN000022-1996-03-06 — Page 80

4.

Enhancing Productivity

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Supporting Productivity Growth

The services sector recognises that the key to improved competitiveness and profitability is higher productivity through innovation. To be successful, Hong Kong's service providers must be able to offer their customers the right products at the right prices. The Government will continue to assist the services sector, particularly small and medium firms, to improve their productivity through organisations such as the Hong Kong Productivity Council, the Hong Kong Article Numbering Association, the Hong Kong Management Association and the Hong Kong Information Technology Federation. The principal objectives will be to promote more extensive use of information technology, human resources development and quality management.

A Services Support Fund

Innovation in new technologies must be led by the private sector. However, government incentives may be justified where the gains from technology transfer to the whole economy exceed the benefits which an individual firm by itself can expect from adopting the new technology.

adopting the new technology. The launch of the Industrial Support Fund in 1994 signified the Government's commitment to providing additional resources to support the development and application of new technologies in manufacturing industry. The Government will seek to establish a Services Support Fund of $50 million to provide funding support for projects which will benefit the further development, and increase the competitiveness, of Hong Kong's service industries.

A Small and Medium Enterprises Committee

Throughout most of Hong Kong's services sector, small and medium enterprises (SMEs) employing fewer than 50 people make up 90 per cent of the firms involved. Hong Kong owes much of its success to the flexibility and agility of these SMEs. Yet their size may make it difficult for them to take advantage of the latest productivity enhancement techniques and management systems. They may also experience difficulties in obtaining finance and access to market information. An SMEs Committee, serviced by the Industry Department and drawing its membership from chambers of commerce and various trade and industry support organisations, will be established by August 1996 to address these and other issues of concern to SMEs. The Committee will cover SME issues relating to both services and manufacturing.

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