DIGITAL 21 STRATEGY ADVISORY COMMITTEE. Report on the Progress of the Task Forces

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1 For discussion Paper No. 4/2011 on 22 March 2011 DIGITAL 21 STRATEGY ADVISORY COMMITTEE Report on the Progress of the Task Forces Purpose The Task Forces on Digital Inclusion, E-Government Service Delivery and Industry Facilitation met on 14, 22 and 28 February respectively. The papers and presentation materials for the meetings are available in the Committee s paperless system for Members reference. This paper summarises the main issues discussed. Task Force on Digital Inclusion Be NetWise Internet Education Campaign 2. The Task Force noted that the one-year Be NetWise Internet education campaign was well-received by the community. A wide range of activities at territory-wide, district and school levels involving more than participants were organised. The activities included over seminars, over home visits, over individual counseling sessions on Internet behavior, and about handbooks for parents, etc. Professional education resource kits were also produced for all primary and secondary schools. 3. The Task Force supported the Hong Kong Federation of Youth Groups to continue to maintain the resources and services developed in the campaign, including the family support centre, online portal and handbook for parents, professional education resources for teachers and social workers, etc., for continuous Internet education. eelderly Portal 4. To drive ICT adaption among the elderly, OGCIO partnered with the Hong Kong Society for the Aged (SAGE) to develop a dedicated portal with contents catering for their needs and interests to encourage the elderly to surf the web. The eelderly portal was launched in June

2 5. The first phase of the portal would be completed shortly, OGCIO and SAGE are preparing for the second phase of the project to include more content and services, as well as silver-hair market offerings. Members supported the initiative and advised more efforts should be made to increase the awareness of the portal and to induce stay-at-home elderly to use it. Web Accessibility 6. OGCIO proposed to launch a web accessibility campaign in mid 2011 to promote the awareness and wider adoption of web accessibility design in both the public and private sectors. The Task Force endorsed the proposal which features the following initiatives (a) (b) (c) (d) to organise focus group discussions and surveys on the needs of Persons with Disabilities (PwD) groups with a view to identifying websites and on-line information frequently used by PwD; to develop a management handbook for managers and senior executives to raise their awareness and drive adoption of web accessibility design in their websites and e-services; to organise large-scale promotion, education seminar and training on web accessibility for both senior and frontline management; and to arrange professional service and advisory support on assessment and accreditation of web accessibility. Members noted that OGCIO would earmark $1 million for these initiatives. Task Force on Industry Facilitation Promotion of Hong Kong s ICT industry in the Mainland and overseas 7. Members discussed the draft fact sheets at Annex for promoting Hong Kong as a favorable entrepôt and platform for technological cooperation, innovation, and trade in ICT in the Mainland and overseas. The Task Force agreed on the following key strategies 2

3 (a) to develop bilingual fact sheets to promote ICT developments and achievements in Hong Kong with modules customised to different opportunity areas, namely, inward investment, collaboration in R&D, and export of ICT products and services for use by relevant government departments, the Economic and Trade Offices, partner innovation and technology bodies and industry stakeholders; (b) (c) to attract large-scale and significant ICT events to highlight Hong Kong as a prominent place for ICT cooperation, innovation, and trade; and to join hands with different partner organisations to promote Hong Kong s advantages in ICT development, business, and trade. 8. Members also advised that information security capability should be included in the fact sheets as one of the strengths of Hong Kong s ICT industry, and comparison on the ICT development of selected economies should be considered. Getting ready for Internet Protocol Version 6 (IPv6) 9. We briefed members on the looming depletion of available Internet Protocol Version 4 (IPv4) addresses and advent of Internet Protocol Version 6 (IPv6) in Hong Kong. Members noted that the IPv4 exhaustion issue will not have direct impact on Hong Kong in the short term since the local market Internet market is already well developed. Members also shared views on how to get ready for IPv6 and the opportunities thus arisen for Hong Kong. OGCIO will work with OFTA and the ICT industry for conducting consumer education and awareness programmes for the IPv6 services in Hong Kong. A Task Force Member pointed out that Hong Kong should prepare itself in order to grab the business opportunities arising from the increasing adoption of IPv6 in the Mainland and neighbour economies due to the rapid growth of the Internet and popularity of mobile devices with network connectivity. Hong Kong s development as a regional data centre hub 10. Task Force s members expressed their views on the Government s proposed measures to facilitate the development of high-end data centres in Hong Kong. This subject will be further discussed at the D21SAC meeting on 22 March. 3

4 Task Force on E-Government Service Delivery Pan-government IT Strategy: Enhancing Government s ICT Capabilities and Services to the Public 11. The Task Force noted the objectives, strategic framework, and recommendations of the Pan-government IT Strategy, as well as a plausible Government cloud scenario currently under consideration. 12. The Task Force considered that adopting cloud technology would not only save costs, but generate productivity gains and other social benefits. In implementing cloud technology, Government should pay particular attention to developing a convenient cloud service delivery platform for building a critical mass of customers, implementing effective change management programmes, and formulating suitable governance and charging mechanisms. 13. The Task Force proposed that Government should consider introducing a balanced mix of public and private clouds to cater for different business needs of bureaux/departments. Government might also consider exploring the setting up of a community cloud for non-government organisations to serve as a proof of concept. Update on the mobile application for the 1823 enquiry service 14. The Task Force noted the different functionalities of a mobile application to be launched in April 2011 for the public to make enquiries or complaints to Government s 1823 enquiry centre via a vide demonstration. Update on the Pilot Scheme on Public Sector Information (PSI) for Access and Re-use 15. We updated the Task Force on the latest progress of a pilot scheme to be launched later this month to make available geo-referenced data of public facilities and real-time traffic data for free public download and re-use. We also conducted a live demonstration of the web interface for this pilot scheme. 4

5 16. Task Force s Members suggested that Government should explore different dissemination methods and provide common schema to facilitate the public in retrieving and re-using the data under the PSI pilot scheme. The Task Force also proposed that the Government should consider promoting the idea of disseminating PSI for access and re-use among information users and information providers, and also creating a community for them to share ideas in the future. Government should take into account the experience gained from the pilot scheme to develop a policy for disseminating PSI in the long run. Advice Sought 17. Members are invited to note the progress of the three Task Forces. Office of the Government Chief Information Officer Commerce and Economic Development Bureau March

6 (DRAFT) Fact sheets for Promoting Hong Kong s ICT Industry Annex Module #1 Hong Kong s Strength as an ICT Hub Hong Kong is a favorable entrepôt and platform for technological cooperation, innovation and trade in ICT Desirable perceptions about Hong Kong s ICT industry In promoting Hong Kong as an ICT hub, we aim to establish the following desirable perceptions about Hong Kong s ICT industry : Hong Kong is able to add value to the Mainland of China s ICT Sectors and facilitate the internationalisation of Mainland industries; Hong Kong is able to add value to technology developed in third markets so that it can be more effectively deployed in the Mainland and in the region; Hong Kong is able to add value to overseas companies and offer them opportunities to grow in Asia, in particular the Mainland; Hong Kong is able to add value to Hong Kong based companies, irrespective of origin, and offer them opportunities to grow in the Mainland and overseas markets; Hong Kong possesses a pool of talents with good mix of knowledge of the eastern and western world and thus our local innovation can well be applied in both parts of the world; Hong Kong is one of the best R&D and innovation centres in the region in the field of ICT; and Hong Kong is an ideal location for data centres in the region Conducive Business Environment Hong Kong s appeal emanates from its pro-business environment, free market principles, free flow of information, low and simple tax, rule of law and an independent legal system, as well as its strategic location in Asia Pacific and as the gateway to the Mainland. 6

7 World s freest economy One of the most open, externally oriented economies in the world. Free trade, free market, free flow of capital. No foreign exchange controls. Free flow of information with no censorship on content transmission. Rated world s freest economy by Heritage Foundation since 1995 (17 th consecutive years in 2011). Ranked first on Fraser/Cato ranking of economic freedom since 1970 (annual since 2001, 5-yearly ). Rated 2 nd in the world for its openness to international trade (The Global Enabling Trade Report 2010 World Economic Forum). Low and simple tax Simple, predictable and low tax system. Lowest tax misery in Asia Pacific and 3rd lowest tax in the world in Forbes' Tax Misery Index Sound legal system Hong Kong s legal system is based on the common law. The rule of law provides certainty and a level playing field for doing business in Hong Kong. Legal protection for the right of private ownership of property. Legal protection for contracts and intellectual property with rigorous enforcement of intellectual property rights. Leading place in Asia for safeguarding intellectual property rights. Leading international arbitration centre in Asia, awards enforceable in more than 130 jurisdictions and reciprocally enforceable between Hong Kong and Mainland. Availability of professional legal ICT services such as licensing and patent registration. Electronic Transactions Ordinance provides a clear legal framework for the conduct of secure e-business in Hong Kong. Strategic location Located at the heart of Asia Pacific and next door to some of Asia s highest potential markets. On the doorstep of the Pearl River Delta (PRD) Region, Factory of the World unique advantage over other Asian cities. International aviation hub and gateway to the Mainland. 7

8 Solid ICT foundation With sophisticated technology infrastructure, skilled and agile professionals and tech-savvy businessmen and consumers, robust protection of intellectual property rights and strong government support to ICT industry, proper emphasis on information security, Hong Kong offers an excellent base for ICT companies to conduct their business for the local, Mainland and regional markets. Technologically advanced society with world-class ICT infrastructure In a leading position in terms of market environment, individual readiness, and usage of ICT. Ranked 1 st in Asia and 7th globally in digital economy rankings (by EIU, 2010; formerly known as e-readiness rankings). Ranked 8 th in the world in the Networked Readiness Index (by World Economic Forum and INSEAD, Global Information Technology Report ). Ranked 3 rd in the world and 1 st in Asia in the Global Innovation Index Report (by INSEAD, ). Ranked 2nd in ICT price basket by the International Telecommunication Union in 2009 among the lowest telecommunication and Internet cost in the world. Hong Kong Internet Exchange (HKIX) the key information infrastructure in Hong Kong Facilitates intra-asia traffic with lower network latency as Hong Kong is located in the centre of Asia. Contributes to the low telecommunication cost in a highly competitive market and helps to develop Hong Kong as an Internet hub. Hong Kong Computer Emergency Response Team Coordination Centre (HKCERT) Coordinates computer security incident response for local enterprises and Internet Users. Facilitates information disseminating, provide advices on preventive measures against security threats and to promote information security awareness. As a major telecommunication and Internet hub, Hong Kong has excellent global communications connectivity comprising a diverse network of tier-one international submarine cables and satellite providers. Connected to more fibre-optic cables than any other Asian country. Mobile penetration at 184% (13.02m subscribers) and household broadband penetration at 81% - among the world s highest (Jul 2010). In Jul 2010, mobile users capable of gaining access to mobile data services (2.5G/3G/3.5G) increased 100% from 2.9m in Dec 2007 to 5.8m (82% penetration). During the same period, the volume of mobile data usage has increased remarkably 38 times from 32 terabytes (TB) to 1,236 TB (214.1 MB per user). 8

9 Hong Kong consumers are at the forefront of global smartphone usage - almost half (48%) of all mobile phone owners have a smartphone, more than double the global rate (23%) (by TNS, Global Telecoms Insights Survey 2010). Strong government support to ICT industry Digital 21 Strategy sets out the vision to develop Hong Kong into a leading digital city as well as hub for technological cooperation and trade. Government adopts an active IT outsourcing policy. Government s IT spending was near HK$4.5bn in and forecasted to reach HK$5.5bn in Module #2 Inward Direct Investment Hong Kong is home to many of the world s leading companies in information and communications technology sector, providing an easy access to market opportunities in the Mainland of China and the region Dynamic ICT sector With the expansion in the local, the Mainland of China and the regional ICT markets, ICT expenditure in Hong Kong continues to rise and the ICT sector continues to grow. Value added of ICT sector contributes 3.6% of the total GDP in 2007 (rose from 3.2% in 1998). Total ICT expenditure in 2008 was at US$19.8bn (26 th in the world) at 9.2% of GDP local ICT market size bigger than much larger neighbor countries like Indonesia and Philippines. IT services accounted for 51.7% of ICT companies and contributed over 20% in value-added by the ICT sector in In 2007, there were 8,776 companies and 81,077 persons engaged in the ICT sector. Ready market for ICT investors Both international ICT corporations and high-growth ICT companies continue to choose Hong Kong as their preferred place in Asia for establishing a business or setting up offices. There is a strong and continuous demand for best-of-breed solutions for multinationals and SME clients in vertical sectors such as finance, logistics and telecommunications, both locally and in the Mainland and the region. 9

10 Currently around 3,600 multinational companies choose Hong Kong as their regional headquarters or regional offices. Global corporations such as SMS, UFIDA, Rackspace, and NTT Com have chosen to setup regional headquarters/offices and data centres in Hong Kong (see Appendix 1 for some recent investor stories). With its world-class telecommunication and Internet infrastructure and the growing popularity of Software-as-a-Service, cloud computing and virtualisation, Hong Kong brings good opportunities for data centre service and software enterprises to offer relevant services to Mainland and the region from Hong Kong. Mobile data services such as short messaging, mobile Internet services, download services, multimedia services and video call services are very popular among consumers. Hong Kong is an excellent location for the setup of data centres because of: proximity to the Mainland; business strengths; robust enforcement of data privacy and security; infrastructural strengths, in particular reliable power supply, sound telecommunication infrastructure; and low risk of natural disasters. Strong business links with the Mainland Proximity to and unique relationship with the Mainland has made Hong Kong the preferred and major business gateway to the Mainland markets. Hong Kong is the largest external investor in Mainland, accounting for US$396bn at end % of Mainland s total realised direct investment. Access to the huge Mainland ICT market: From January to July 2010, China s software industry revenue hit US$106bn (723.1bn yuan) (around 29% growth), with software export grew by around 27% to US$13.8bn (94bn yuan). Pearl River Delta to become Asia Pacific s most vigorous economic area. It is the fastest growing region of the Mainland, contributed to 10% of China s GDP and 30% of the Mainland s exports. 10

11 Unique Mainland and Hong Kong cooperation frameworks The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) grants easier access to the Mainland markets for Hong Kong-made products and Hong Kong-based service companies. The Framework Agreement on Hong Kong / Guangdong Co-operation (FA) to promote regional e-business environment (e.g. service platforms to provide better services, such as customs clearance). Module #3 Commercialisation/Adaptation of ICT products and services for third market Hong Kong offers innovation and technology companies an ideal R&D environment to reduce risk and increases the chances of success in developing and commercialising new technology to meet the Mainland of China and regional market needs Strong innovation and technology development With world-class R&D facilities, high-tech infrastructure, robust protection of intellectual property rights, and unrivalled access to the Mainland of China and Asia, Hong Kong offers an excellent base for companies to carry out research and development. Total R&D expenditure in Hong Kong in 2008 was HK$12.3bn, representing an increase of 73% in comparison to Business R&D expenditure as compared to Hong Kong s total R&D expenditure has increased markedly from 29% in 2001 to 43% in Big enough to demonstrate while small enough to be practical - Hong Kong serves as an excellent test bed for new solutions and a solid base for ICT companies to service their clients in the Mainland and region. The vast Mainland market can help to achieve economies of scale for R&D and product development. Skilled and agile ICT workforce Hong Kong has a talent pool with the essential mix of being international market savvy and the appreciation of the business culture in the fast-growing Mainland cities and across the Asia Pacific region. Hong Kong s immigration policies are designed to attract professionals, talents and investors to ensure the city s continued competitiveness and enrich the quality of Hong Kong s workforce. 11

12 Abundant supply of tech savvy engineers, managers, administrators, technicians and skilled workers with strong business acumen and domain knowledge for turning ideas into reality. Staffed with mobile, skilled and multi-lingual ICT professionals English is the language of business in Hong Kong and many people speak English, Cantonese and Mandarin and have a good understanding of international and Mainland business. Local immigration policies make it easy for professional expatriates from all around the world to work in Hong Kong. Talent can be easily sourced from the Mainland, the largest pool of scientific and technical expertise in Asia. State-of-the-Art research & technology infrastructure Hong Kong has setup world-class technological infrastructure and facilities to help nurture the development of technology-intensive industry clusters. World-class infrastructure including Cyberport, Hong Kong Science and Technology Parks (HKSTP), the Applied Science and Technology Research Institute (ASTRI) and five R&D Centres are setup to facilitate R&D. The Hong Kong Applied Science and Technology Research Institute Company Limited (ASTRI) is Hong Kong s ICT R&D Centre conducting research in the following areas (see Appendix 2 for more service details and success stories): Communication Technologies (CT) IC Design (ICD) Enterprise and Consumer Electronics (ECE) Materials and Packaging Technologies (MPT) Bio-medical Electronics (BME) Strong Government commitment and support The Government attaches great importance to promoting and nurturing R&D in Hong Kong. Apart from the world-class infrastructural facilities, it has also setup a number of research and development grants to support R&D among industries and institutions. A strong tradition of collaboration between the private sector, universities and government supported high-tech facilities and research centres. A HK$5bn Innovation & Technology Fund (ITF) has been set up by the Government to encourage and assist industries to undertake R&D activities for enhanced technology development and innovation performance. HK-Guangdong Joint R&D Fund supported over 660 R&D projects with total funding of HK$1.63bn. Three-quarters of Hong Kong s universities are research based and staffed with world-class researchers. 12

13 Module #4 Export of ICT products and services Hong Kong offers sophisticated and premium quality ICT product, solutions and services to meet the needs of our customers locally, in the Mainland of China and the region. Strong ICT export demand Total ICT (goods and services) exports were US$157bn in Total exports of computer and related equipment was HK$292.1bn in The Mainland of China was the largest destination, accounting for 62.7% of the total. Total exports of computer software was HK$3.3bn in The Mainland was the largest destination of Hong Kong s total export of computer software, accounting for 74.6% of the total. Export of computer services was HK$4.8bn in Quality ICT products and services Hong Kong ICT products, solutions and services are sophisticated, highly commercial and market-led, serving all niche market needs across the spectrum of ICT development in businesses. We target economies with substantial ICT demands, whether developed or emerging, for Hong Kong s homegrown ICT products/services as well as those value-added ones of Mainland and overseas origins. Hong Kong s ICT professionals awareness of and expertise in information security offers additional edge for our products and services. With technical capability, flexibility, business acumen and international exposure, Hong Kong ICT companies do not only deliver at home but are also competitive internationally. Being a global hub for world-class IT and online services and telecommunication, Hong Kong is well positioned to offer cloud services to the Mainland and the region. Major IT solutions and services which overseas business buying from Hong Kong are: Banking and finance Shipping, freight forwarding and logistics Trading Transportation Key horizontal applications Hong Kong delivers are: Enterprise Resources Planning Customer Relationship Management Supply Chain Management and RFID applications on logistics Wireless and Mobile Game and Digital Media/Contents Many overseas countries have opened up the telecommunication markets which Hong Kong ICT companies are competitive in gaining footholds in these markets. 13

14 Outstanding ICT Achievements Local ICT companies had won many international/regional ICT awards, such as the Asia Pacific Information and Communications Technology Awards (APICTA), World Summit Award, and World Information Technology and Services Alliance s (WITSA) Global ICT Excellence Awards. During the years, Hong Kong has received many prestigious awards. The Immigration Department won the APICTA awards for four consecutive years from 2004 to 2007, including the "e-passport System", the "e-channel", the "Face Recognition System" and the "Smart Identity Card System"; At the WITSA s Global IT Excellence Awards, the Octopus won the 2006 Chairman s Award; The Mobile Link Service that was the collaboration between our ICT industry and community organisation, won the 2010 Grand Prize of the Digital Opportunity Award; and; Hong Kong Observatory's World Weather Information Service won the Stockholm Challenge Award

15 Appendix 1 Highlights on Investors Success Stories (source: InvestHK and company press releases) 1. SMS Management & Technology Setup Asian regional headquarters in Hong Kong SMS is an acquisitive company that has acquired 11 businesses over the past six years. Its management believes there are opportunities in Asia through using Hong Kong as a platform from which to further expand. SMS specialises in improving operational performance and IT delivery by improving the way its clients use people, processes and technologies. Its core services include application development, information and data management, systems integration, CRM, programme and project services and business performance improvement. According to its management, strong demand in Hong Kong accelerated the company s plans to set up a presence in Asia. 2. UFIDA Moves its global functions to Hong Kong UFIDA is the biggest management software company in Asia Pacific and aims to become the leading management software provider in the world. It is the leader in the Chinese software market, and is now the biggest supplier of ERP software in China with a market share of 21.6 percent, ahead of global provider SAP, and the undisputed leader in the area of ERP software for common applications. Its office in Hong Kong has been expanding in size and strategic importance since 2003 to become the company s global business base and its regional headquarters. It has a 2,500-strong R&D team dedicated to developing the latest technologies to enhance its software solutions spanning all business and management functions, languages and locales. Its management sees opportunities for growth in the Hong Kong market for management software, in particular from the real estate sector. 3. Rackspace Hosting Opens its Asian headquarters and data center in Hong Kong Rackspace Hosting, founded in 1998 and based in San Antonio, USA, is the world s leader and specialist in hosting services. It delivers enterprise-level hosting services to business of all sizes and kinds around the world. In September 2008, the company opened Asian headquarters and data center in Hong Kong. Rackspace selected Hong Kong due to its reputation within the global business economy, world-class IT infrastructure, multiple telecommunication providers and rich talent pool. Its management believes that there will be a growing customer demand for hosting, especially in the financial services area, so they look forward to a successful expansion in the Hong Kong market. 15

16 4. NTT Communications Expands its premium data centre services in Hong Kong Headquarterd in Tokyo, Japan, NTT Communications Corporation (NTT Com) was founded in 1999 as the wholly owned subsidiary of Nippon Telegraph and Telephone Corporation, one of the world s largest telecommunication companies. NTT Com and its subsidiaries provide data center services in 20 countries/regions outside of Japan. In Oct 2010, NTT Com Asia acquired a 30,000 m 2 of land in Tseung Kwan O for developing a new premium data center in Hong Kong. Following to the launch of NTT Com s flagship Tier III+ data center in Tai Po in 2009, commercial operation of the new data center is scheduled to start in 2013 in order to cope with the huge market demand for high quality data center. This new data center is three times larger than the existing one and expected to be the first Tier IV ready and the largest one developed by data center service provider in the city. The project demonstrates NTT Com group s confidence in the promising prospect of Hong Kong as an ICT hub in Asia. 5. HKCOLO the Local Based Company Opens a Unique New Data Centre in Hong Kong HKCOLO is founded in 1999 in Hong Kong as a colocation service provider and it is presently serving over 300 providers and corporate customers in Hong Kong. It was a winner in the Hong Kong Business Awards HKCOLO provides all basic colocation services together with managed IP backbone, managed IP transit, IP gear leasing and voice switch leasing. Apart from these traditional services, it also provides investment consultancy service and management consultancy services in the region. To meet the growing market demand, HKCOLO announced in Aug 2010 that it will open a 360,000 square feet combined Tier-3 to Tier-4 data centre in Tseung Kwan O to serve its clients of cloud operators, financial institutions, submarine cable operators and extra-terrestrial operators. The new development signifies HKCOLO s dedication to Hong Kong, the Greater China and the region. 16

17 Appendix 2 ASTRI s services on collaborative R&D with overseas companies (source: ASTRI) The business model of ASTRI mainly involves technology transfer to the industry through various kinds of commercial agreements, including sponsorship (cash or in-kinds), licensing, royalty, and contract research service. In general, most of these technology transfers are granted on a non-exclusive basis so that ASTRI IPs are available to any interested companies. The industry can collaborate with ASTRI via the Industry Collaborative Project (ICP) program which is ITF funded to meet its specific technology needs. The typical total project cost for an ICP is HK$2M minimum. Industry partners have the option to own the foreground intellectual property (FIP) if they contribute more than 50% of the total cost of an ICP. To start an ICP, an industry partner needs to contribute at least 30% of the total project cost. Under this arrangement, ASTRI will initially own the FIP. The partner company then has the option to increase the sponsorship to at least 50% of total project cost in order to own the FIP. Alternatively, the industry partner may contribute at least 50% to secure its FIP rights at the start of the project. Income generated from the ICP will be shared between ASTRI and the partner company under a revenue sharing arrangement. ITC prefers the ICP customer has a local office (presence) in Hong Kong. ITC will take such factor along with other factors such as the terms of the deal into consideration during the ICP vetting process. The industry can also collaborate with ASTRI via the Contract Service (CS) which is non-itf funded and 100% paid by the customers. In this case, it s not subjected to ITF guidelines and rules mentioned above for ICP. The customer will have the foreground IP rights. The CS agreement is subject to negotiation between ASTRI and the customer company only. ASTRI s success cases in collaboration with Silicon Valley companies 1. Credo Semiconductor In 2009, ASTRI signed an ICP agreement with Credo Semiconductor, an IC start-up company from Santa Clara, California specialised in high-speed and low power mixed-signal IC design. The collaboration will pull together ASTRI's expertise in 10G data communications system and Credo's strength in low power mixed signal designs. Credo will benefit by getting an exclusive license to incorporate the project's R&D outcome into the IC products for sale in the worldwide market while ASTRI, besides sharing profit from the sale, will be able to acquire the most advanced know-how in IC designs to address the need of the emerging high speed networking industry in the next three to five years. 17

18 This collaboration not only brought in the most advanced technology in IC designs from the U.S. to Hong Kong, but also created immediate job opportunities for Hong Kong s science and engineering graduates as the project will hire 12 local university graduates with no previous work experience, two of which are interns under the Government's internship scheme. 2. Velosti Technology Limited In 2010, ASTRI signed a two-year Industry Collaborative Project (ICP) agreement with Velosti Technology Limited, a technology firm based in Silicon Valley, to co-develop a USB 3.0 chip to serve the needs of the fast expanding USB 3.0 markets. Under the agreement, ASTRI will support Velosti s development of the chip in Hong Kong by furnishing facilities and human resources. Also, by partnering with ASTRI, Velosti can significantly reduce the development cost and increase the chance to successfully enter the Mainland of China s market. On the other hand, ASTRI researchers will be able to acquire the world-class expertise in USB 3.0 technology from Velosti. 18

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