FHKI 60th Anniversary Commemorative Album

In the 1970s, the social and political environment in neighbouring places like Taiwan, Singapore, Korea and Malaysia stablised and began to open up industrial processing zones. Many of the US- funded electronics companies relocated their production lines to these new industrialised regions because production costs in Hong Kong were rising and labour and land shortage problems were worsening. At that time, these companies’ former workers already mastered the techniques and management skills of running electronics factories. Seeing that demand from overseas markets was strong, many of them took the opportunity to start their own business. Foreign investors coming to Hong Kong to set up factories had provided essential training to Hong Kong people who had the capability of starting their own electronic business. In general, the majority of these Hong Kong-funded electronics enterprises were initially engaged in original equipment manufacturing (OEM) production, or private label manufacturing. “To sustain competitiveness and growth, Hong Kong industrial enterprises have to continue to upgrade and transform so as to keep pace with the constantly changing global market. The most commonly used approaches range from conducting R&D, applying innovation and technology to building brands and expanding sales channels,” Dr Roy Chung said. Some also expand business through acquisition so as to enable the company to be vertically integrated. The acquisition strategy is not only about buying the brands, but also the technologies and clientele owned by the acquired companies. Yet the more important consideration is to effectively enhance the added value of the company’s products and services. “Companies should also take advantage of Hong Kong’s position as an international financial centre to raise funds. With sufficient capital, companies will be able to strengthen their capabilities to take leading positions in their respective field of business.” After World War II, many US companies set up factories in Japan for production of the emerging popular electronic products to supply the US and European markets. Then in the late 1960s, because of the upsurge of production costs and increase in market demand, both Japanese and US companies were set to upgrade their industries and to expand their production capacity. US firms found that Hong Kong was an ideal offshore place to set up labour-intensive factories to produce electronic consumer products like transistors, electronic boards, hi-fi sets, radios, recorders, car radios and inhouse cordless telephones, and other consumer products such as toys and watches. US firms considered Hong Kong an excellent investment destination because Hong Kong at that time had sufficient cheap manpower which could meet the needs of the labour- intensive electronics industry. Hong Kong also followed British law and regulation systems with which the US businesses were familiar. When compared with nearby places including Taiwan, Malaysia, Singapore and Korea, Hong Kong had a stable social and political environment while cities on the Mainland were not open yet. In late 1960s, the electronics industry was newly introduced to Hong Kong by US firms. To attract workers, electronics factories offered better pay packages and employee welfare (with facilities like staff canteen and recreational activities for staff). Air-conditioned workplace successfully lured young workers to join the industry although in general textile and clothing industries offered higher wages. Many students took up summer jobs in electronics factories to help solve the labour shortage problem during the peak manufacturing season in July and August. The emergence of the electronics industry in Hong Kong boosted the growth of other industries, like plastics, metals, paper and printing industries as suppliers, while toys and watch industries as users of electronic parts and components. Federation of Hong Kong Industries 60 th Anniversary Commemorative Album 29