Opening address at the GREAT Festival of Innovation Hong Kong
Secretary of State for International Trade Liam Fox's opening speech at the GREAT Festival of Innovation Hong Kong.
Good morning to everyone.
It’s a real pleasure to finally be here, at the start of the GREAT Festival of Innovation in Hong Kong.
For myself and the members of my team who have travelled from the UK, it almost seems surreal that this fantastic showcase is finally upon us. And a huge thank you to all of our people here from the UK and Hong Kong who have made this happen.
For me, this festival offers an opportunity to look far into the future, exploring the technological developments that will unite the UK and Asia, and shape the world economy for up to a century or more.
Innovation is, of course, a key focus of ours. My department was created in order to shape an independent trade policy for the United Kingdom, our first for more than 4 decades.
A 21st century trade policy must embrace the realities of the modern trading environment, and that means protecting, promoting and celebrating innovation.
But the location of this festival lends it an extra significance.
Hong Kong has always been one of my personal favourite cities – a global commercial hub that possesses a unique blend of drive, energy and dynamism.
Of course, this city has, for centuries, been Britain’s gateway to Asia.
Of course, we are not here to dwell on the past. But the ties of history and language that are shared by the UK and Hong Kong have put opportunities ahead.
Our shared history is the preface of to our shared future. Now, the IMF predicts that, in the next 2 decades, 90% of global growth will be generated beyond the borders of the European continent.
Much of this will be driven by the Asian economies, where new markets are growing to meet their own innovation revolution.
The next few years will offer a golden opportunity for the UK to work with our partners across Asia to drive innovation and shape the future of global trade.
The UK has the experience and capability in key industries - from technology and finance to education and healthcare – that make us the natural partner for the region’s burgeoning economies.
This festival is hugely symbolic. Why? Because it comes at a time when the UK is seeking to deepen our trading ties with partners across the world.
This not only applies to those emerging economies that will be the drivers of global economic growth, but also to long-established partners and friends with highly developed and complementary economic structures.
And of course, Hong Kong is foremost among these.
We have chosen to hold the GREAT Festival here in Hong Kong because our trading relationship with this city is, I believe, a model for the UK’s future trading partnerships.
Both the UK and Hong Kong believe that agility and adaptability are the keys to an effective trade policy in an ever-changing and evolving global environment.
And this approach is at the heard of what the Prime Minister has described as a truly ‘Global Britain’. We won’t be less engaged, but more engaged as we leave the EU, deploying the determination that Britain has always had to promote our values and help shape the global environment in our fast-changing world.
Governments must be able to act quickly and effectively to changes on the ground, ensuring that new industries do not mean new barriers to trade but effective and efficient policy tolls to deal with them.
The Strategic Dialogue with Hong Kong was one of the first of our new measures to be launched following the creation of DIT.
We are already holding meetings, at official and ministerial level, to identify and remove those non-tariff barriers which currently impede trade flows between our 2 economies.
Because there is much we can do, and businesses already do, to liberalise our trading practices without undergoing the process of negotiating a full free trade agreement.
What underpins this is the recognition that we share values, goals, and a mutual commitment to global free trade, and built on that commonality.
Earlier this year, I travelled to Davos in Switzerland to attend the World Economic Forum.
The event was, as ever, extremely productive, and an invaluable opportunity for businesses and policymakers to come together and shape the future of global trade.
In that respect, it is a lot like particular showcase – the GREAT Festival of Innovation.
But the WEF also emphasised, to me, how unnecessary some of the perceived complications around global trade liberalisation really are.
A free trade agreement is, of course, a fine achievement for both parties, and should often be pursued as the ultimate goal.
But it is simply too broad to be the first or only approach to bilateral trade liberalisation. Often, barriers can be lifted more quickly with an incremental approach which identifies existing common ground – the ‘low-hanging fruit’, if you like, of trade relations.
There is no greater defender or advocate for the rules-based global trading system than the United Kingdom and multilateral agreements remain the gold-standard of trade liberalisation. Hong Kong is a strong and valued ally in this cause.
Yet it is also true that the system possesses an inherent inflexibility. Too often, formalised policy frameworks have been left standing by progress and innovation, and by the technological developments that have accelerated globalisation.
Let’s just think of the one great change we have witnessed – the development of the digital global economy. It’s hard to imagine now when it didn’t exist.
In the UK alone, the digital economy supports around 1.4 million jobs, and the sector is growing 32% faster than the wider economy.
In 2015, global e-commerce sales surpassed $25 trillion.
Yet there exists no formal international framework governing these vast trade and capital flows.
Of course, you do not need to hear this from me. Many of Asia’s most distinguished and innovative digital companies are here with us at this festival - one of the reasons we chose Hong Kong in the first place.
Many of you might assert that your industry is doing just fine, having reached all its achievements without any multinational governance whatsoever.
But any such measures would be designed not to stifle innovation, but to enhance it.
But these disrupters are the Darwinians drivers of our economy. We all know the benefits that technology can bring to consumers and citizens.
And, I want to see a wider discussion around how technology can help governments to facilitate trade and lead effective policy development.
Later this morning, we will have a panel discussion on ‘The Future of Free Trade’.
Much of the talk around the future of trade is focussed on the ‘trade disruptors’. These new technologies and industries are at the forefront of the shake up the global economy and are reshaping the way we approach international commerce.
Those of us who are fortunate enough to be able to help shape trade legislation must ask ourselves how we can harness the power of innovation to enhance global opportunity and build a more prosperous future for us all.
So technology may be a disruptor, but it is also a facilitator.
One small example is my own department’s trade platform online – great.gov.uk.
Government is using digital innovation to directly put exporters in the UK in contact with potential customers overseas.
Similarly, by the same route, companies in Asia and around the world can access a searchable directory of British exporters, allowing them to quickly source their ideal product.
It is a small but important step towards government embracing technology as a way to facilitate more traditional trade.
But if we really want to harness innovation to open global trade, we must look at the transformative effect technology has had in lifting the burden of bureaucracy from certain industries.
Now take personal finance, just as an example. Twenty years ago or more, if you wanted to take out a loan, you had to walk into a bank for a face-to face discussion with the manager.
For those of you, remember what it was like, armed with your employment and income details, it was up to you to persuade the bank that you were able to repay the money borrowed.
Today, you can take out a loan at the touch of button, or a tap of a smartphone screen you can achieve the effect.
This is not because finance has somehow become less complex. Arguably, people’s personal finances and credit scores are more convoluted than ever.
Rather it is because technology has removed the bureaucratic burden from the customer, and even from the bank manager, and delegated it to an algorithm.
Even in medicine – my own profession in which I began my working career – patients can be assessed, and prescriptions issued through an automated online service.
The fundamental contribution that technology has made to human existence has been to make complicated things simple. It probably says something about our nature that the history of innovation is a long string of labour-saving devices for us.
And if technology can make paying your tax or booking a holiday more efficient and accessible, then why can’t it do the same for exporting?
A bilateral or multilateral free trade agreement is, fundamentally, an attempt to make the system less complicated. It is an admirable an important goal and one which we must pursue with vigour at all time.
But as well as making the world less complicated, we should also recognise that technology can be used to ease to improve the conditions of the people within the economic system.
We cannot forget that innovation also has the potential to unlock vast swathes of the global economy, especially in the developing world.
For years now, millions of Africans have been using mobile phone banking, in lieu of a reliable system of high-street institutions – an early innovation often overlooked outside the continent.
E-commerce has also helped to neutralise at least to some extreme the barriers of geography and infrastructure that have sometimes stifled new ventures in undeveloped nations.
And by allowing economic activity to take place within the home, it continues to emancipate women in particular across the globe into the world of work – entrepreneurism at the click of a mouse.
But, as well as addressing the wider questions of technology and international trade, the GREAT Festival of Innovation also has a narrower and more immediate focus: the vast opportunities that exist between Asia and the United Kingdom.
Our country has a richly-deserved reputation for excellence in innovation and technology.
The UK boasts some 58,000 technology firms. In the last year, more venture capital in tech came to London than in Germany, France, Spain and Ireland combined.
In many areas, the research and development capabilities of the UK have put us at the cutting-edge, creating the technologies of the future.
In Bristol close to where I live and represent in Parliment, a company called Graphcore is developing the next generation of computer processors.
In Exeter, the Centre for Graphene Science are developing self-powering wearable tech that will allow electronic devices to be woven directly into clothing – not that far away from the images the young people were telling us about.
And in Cardiff, the Compound Semiconductor Catapult is leading the way to find a high-capacity replacement for silicon chips.
These companies are being aided in their endeavours by a government that is committed to technology and innovation.
Our business-friendly regulatory environment and the lowest corporate tax rate in the G20 have helped to propel us to first place in Forbes’ Best Countries for Business survey.
Our Industrial Strategy is ensuring that the investment, resources and infrastructure are in place to help innovators to thrive in every corner of the United Kingdom.
And our ambition to build a truly global Britain is allowing UK companies to trade more freely than ever with our partners across Asia.
Let me give you just one local example – the UK company OC Robotics are working here with Dragages Hong Kong to provide remote access technology for the construction of the undersea road tunnels between the mainland and Hong Kong International Airport.
This is what is at the heart of the GREAT Festival of Innovation.
The UK may have a lot to offer, but so does Asia especially Hong Kong. The festival is not about selling our products to Asian markets though we don’t mind if we do, but about building relationships and collaboration.
The partnerships between UK and Asian firms that will be established at this festival and the networks that we build will shape the future not only of the UK, Hong Kong, and Asia, but of the world.
The festival will showcase the very best of British and Asian innovation in how we will learn, how we live, how we work and how we play in the future, across multiple sectors.
We are here not only to celebrate what we have, but to build a network that will drive innovation, develop new technology, and determine the future of global trade.
We are at a truly exciting moment in history. We want to hear your opinions on global commerce, and learn from your expertise to unlock the opportunities of free and open commerce.
If we innovate together, we can achieve so much.
So, let’s discover the future. Let’s create tomorrow.
Thank you.