Innovation and Technology in the Knowledge-based Economy

1
Innovation and Technology in the Knowledge-based
Economy
Thomas TANG
Executive Director, Hong Kong Productivity
Council Hong Kong
2
XVI World Congress of Accountants Workshop 2
3
Innovation and Technology in the Knowledge Based
Economy and their Implications for
Accountants THOMAS TANG Executive
Director Hong Kong Productivity Council
(HKPC) November 19, 2002
4

• Key Drivers of Productivity Growth
• Innovation
• Technology

5

• Enabler of Innovation and Technology Development
• Information Technology
• Applications for
• Manufacturing
• Service Processes
• Communication and Information Systems

6

• Why Innovative Accounting Techniques
• To meet changing client needs particularly in
  Cost and Management Accounting

7

• Innovative Accounting Techniques in Order of
  Popularity
• Product Life Cycle Analysis
• Activity Based Management
• Activity Based Costing
• Target Costing
• (from Study by Askarany and Malcolm Smith)

8

• Low Application Rate of Innovative Accounting
  Techniques, according to Recent Studies e.g.
  Activity Based Costing (ABC)
• 14 in UK and Australia
• 10 in USA
• (from Innovation Diffusion by Malcolm Smith)

9

• Reasons for Not Adopting Innovative Techniques
• Lack of suitable software programs
• Cost of system setup and its implementation
• Cost of maintaining and collecting cost
  information
• Lack of information on available costing
  techniques

10

• Reasons for Not Adopting Innovative Techniques
• Lack of appropriate accounting skills
• Low benefit coupled with high cost
• Lack of confidence in the ability of new
  accounting techniques
• Employee resistance

11

• Implementation Culture of Innovation
  Successful Diffusion
• Education and Training to Establish the
  Credibility of Accounting Innovations
• Breaking down the Barriers or Employee Resistance
  to Change
• On all levels Individual, Group, Intergroup and
  Organizational
• Empowerment of Employees

12

• Implementation Culture of Innovation
  Successful Diffusion
• Alignment of Incentives
• Incentives Aligned with Programme Objectives
• To Facilitate, Reward and Reinforce Effective
  Change

13

• Implementation Culture of Innovation
  Successful Diffusion
• Internal Sponsorship
• Key Individuals within the organization to
  demonstrate the Managements Understanding and
  Commitment
• Clear Communication of Goals and Strategies
• Visionary Leadership

14
Chinas Accession to WTO

• In its WTO accession, China made substantial
  concessions on foreign investment in the services
  economy, covering
• Partnership limited to CPAs licensed by Chinese
  authorities
• Affiliation between foreign and Chinese
  accounting firms
• Recognition of foreigners CPA qualification
• No mandatory localization requirement
• Expansion of Services taxation and management
  consultancy

15
Chinas Accession to WTO

• Capitalizing on these Opportunities
• eXtensible Business Reporting Language (XBRL)
• Automatic Exchange and Reliable Extraction of
  Financial Information
• Across All Software Formats and Technologies
• Internet

16
Chinas Accession to WTO

• Capitalizing on these Opportunities
• Online Experts and Virtual Teams
• Chinas Geographical Spread
• Cross-Border Business Activities
• Internet

17

• Conclusion
• Innovative Accounting Techniques generally have
  Low Adoption Rates
• The Nurturing of an Innovative Culture and
  Incentive Programmes are Means to Promote a Wider
  Adoption
• Innovation and Technology are Productivity Tools
  for Accountants in Today's Knowledge Based
  Economy

18
THANK YOU !