Financial Secretary John Tsang will focus on promoting technology-based, creative and green economies to ensure Hong Kong's long-term growth.

In his 2009-10 Budget today Mr Tsang said the Government's new economic initiatives cater to calls for the Government to promote economic diversification.

"Faced with the global financial crisis, governments around the world are reviewing their strategies for economic development. During an economic downturn, as well as addressing immediate needs, it is vital we are far-sighted in encouraging high value-added economic activities that open up new sectors for sustainable economic growth," he said.

Technology-based economy

The Government will promote the development of new technologies to enhance Hong Kong's competitiveness through the provision of infrastructure, manpower training, co-operation with the Mainland and other economies and funding schemes.

It will admit more solar energy photovoltaic research institutes to Hong Kong Science Park.

It will continue to work with Shenzhen to attract more overseas enterprises to conduct scientific research in Hong Kong, and further co-operation under the Shenzhen-Hong Kong Innovation Circle where the two governments will formulate an action plan for the next three years and jointly fund co-operative research projects.

In co-operation with Guangdong, Hong Kong will explore other areas of technological development to enhance the overall research capacity of the Pearl River Delta region and facilitate the upgrading and restructuring of Hong Kong enterprises in the region.

Two laboratory buildings in Science Park Phase 2 have been reserved to support biotechnology research. The buildings will be commissioned in April.

"Biotechnology has potential for wide applications. Our universities are well positioned to develop this technology. A number of world-renowned biotechnology companies have been conducting technological research in Hong Kong, building up a sound foundation for development. In addition to the key development areas of electronics, precision engineering and information technology, biotechnology will become a new cluster in the Science Park."

The development of Phase 3 of the park is now under study to meet demand from economic restructuring and enterprises' for research facilities.

Industrial estates

The Government is studying ways to enhance the functions of industrial estates, reviewing the mix of industries within them and exploring future market opportunities, including the introduction of new industries, to ensure the development of Hong Kong's industrial estates keeps pace with the times and brings the best economic benefits. The study will be completed in the third quarter. The potential and feasibility of developing a fourth estate is being studied.

The number of calls for Innovation & Technology Fund applications each year will be increased.

The Finance Committee has approved the establishment of an $18-billion Research Endowment Fund, and the Government will also progressively provide 800 additional places for postgraduate research programmes in three years starting from the 2009-10 academic year.

"These will help increase our research capacity and competitiveness, and attract outstanding researchers, educators and more high value-added enterprises to Hong Kong."

Creative economy

A dedicated office to co-ordinate work on the development of a creative economy and give more effective support to creative industries will be formed by mid-year by integrating Government resources.

Funding of $300 million will be earmarked for the development of creative industries in the coming three years.

The Government will promote the use of design and nurture more local talent to drive the development of the design industry, incorporate the elements of design and creativity into education, promote the development of the local film industry through the Film Development Council's efforts to expand markets for Hong Kong films in the Mainland and Southeast Asia, and provide financial support to further incubate more digital entertainment companies.

"We will also develop creative industries with strong local characteristics through the promotion of culture and art, [and] continue to promote the accomplishments of our creative industries in the Mainland and overseas."