Bringing in the best of the best
- A perspective on inward investment promotion
Hong Kong Coalition of Service Industries
December 1997

Introduction

1. The Industrial Promotion Unit of Industry Department has been highly successful in promoting inward investment in manufacturing for almost 25 years. As part of the campaign to promote Hong Kong's service sector, the seven overseas offices of the IPU have been tasked with promoting inward investment also in services. This expanded role of the IPU is keenly supported by the HKCSI.
   
   
2. It has been a long-held position of the HKCSI that the promotion of services requires a different perspective from that of manufacturing. Modern industries are increasingly characterised by their diversity on the one hand and their interdependence on the other. Services and manufacturing are becoming more intertwined and in promoting trade and investment, the two should be promoted together.
   
   
3. In considering how the promotional resources should be utilised to the best effect, we wish through this paper to comment on two specific areas. These comments follow the broad strategic vision which the HKCSI sees for the Hong Kong service economy, namely, to promote Hong Kong as a high-quality and high-value service centre. The two areas relate to the following:
   
   1. a more proactive and knowledge based approach in the identification and targetting of industries to be promoted,
      
   2. greater involvement of the Hong Kong private sector practitioners.
      
      

Investment targetting

4. In the Industry Department's 1998-98 business plan for investment promotion, six service sectors were specifically targetted, namely, captive insurance and reinsurance, retail and distribution, environmental management, building management, construction project development and management, and regional headquarters. In addition to this effort, we propose that the targetting of inward investment be related to the concept of benchmarking and best practices which the HKCSI has been promoting and for which a discussion process has earlier been initiated by the HKCSI.
   
   
5. We believe Hong Kong's industrial structure has progressed to the stage where it is no longer good enough simply to encourage foreign companies to come here. The region has become more competitive and in business terms the private sector would be looking not just for any business opportunity but for the best opportunities. Likewise, for Hong Kong Inc as a whole, what is needed in terms of inward investment promotion is not just to bring in anybody - foreign investors will come of their own accord with or without promotion - but to bring in the best of the best.
   
   
6. By "the best of the best" we do not mean to ask government officials to make a judgement of which industries are "better" than others. Rather, we suggest that the best companies, processes and practices be identified for all industries. Herein lies the relevance of benchmarking. It is a recognised management practice, an objective rather than arbitrary method of identifying the best. In other words, what we propose is an additional approach in the identification of targets for promotion, with an emphasis on best practices and best processes.
   

The method of promotion

7. In addition to the traditional ways of promotion such as company visits, direct mailing and seminar participation, we suggest that consideration should be given to a more proactive and knowledge-based approach. There should be room for a greater role of the private sector in providing input to the promotion process.
   
   
8. It would be a rare company which comes to Hong Kong as a standalone investor. The message to the best companies of the world should be to ask them to invest in Hong Kong because there are a wide range of local business partners here with first class credentials. And who better to promote this message than the Hong Kong businessmen themselves? As an example, apart from general promotional-type seminars, more focused expert seminars could be organised between, say, ten foreign "best practice" companies and ten Hong Kong businessmen in related fields.
   

The way forward

9. We believe inward investment promotion is important to Hong Kong and we commend the IPU for their continual efforts. We submit these comments as a concept paper, as a contribution towards further dialogue on this very important task. We believe it beneficial to involve also in the discussion, other than Industry Department itself, parties which are promoting benchmarking practices including the Hong Kong Benchmarking Clearinghouse and the Hong Kong Productivity Council. It is our understanding that the latter parties are interested in contributing ideas towards developing a strategy for investment promotion including the following elements:
   • identifying international best practices
   • comparing these with best practices in Hong Kong
   • identifying best practices which are not yet adopted in Hong Kong
   • amongst these, evaluate the priority for promotion
   • evaluate interest from the private sector
   • formulate a targetted promotional campaign

   
   

10. The HKCSI would be happy to play a coordinating role in the discussion process.
    
    
    

(ends)

If you have any question, free to email us at csi@hkcsi.org.hk