9. The second reason for economic recovery is the Government's critical assessment of the situation to determine the direction for Hong Kong's future development. I suggested as early as 1996 that Hong Kong should develop into a truly cosmopolitan city, servicing the Mainland, Asia and the world. My previous Policy Addresses explored and analysed time and again the causes of our particularly protracted and painful economic restructuring, and the direction and strategies we should adopt to foster restructuring. With the community gradually reaching a consensus, we finally decided that Hong Kong must leverage on the staunch support of the Mainland, engage ourselves globally and develop into a world city providing quality services.

10. Once consensus is reached, the direction for economic restructuring can be set. The role of the Government in respect of economic services is well defined. Our main task is to provide the necessary hard and soft infrastructure. We also strengthen our co-operation with the Mainland to capitalise on our advantages. We promote and apply new knowledge and new technology to facilitate economic restructuring. We increase investment in education, attract more talent and upgrade the quality of our manpower. The number of local organisations and enterprises engaging in research and development (R&D) is on the increase, as is the number of technical workers employed in the field and overall R&D spending. The application of new technology has enhanced the quality of our products and services.