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From Seattle to San Francisco

Last week, I visited Seattle and San Francisco for a few days. Besides meeting with government officials and business leaders, I visited various leading tech companies, exchanged views with their senior management and research and development (R&D) teams to understand the latest development and future trends in innovation and technology (I&T). We also met with prominent start-ups and companies closely related to the start-up ecosystem, such as representatives from various types of funds and related professional services, as well as two institutes providing training relating to I&T, so as to have a deeper understanding of the overall I&T ecosystem and the correlations between sectors, and facilitate the formulation of policies in the promotion of I&T in Hong Kong.

During the company visits, we were briefed on different researches and applications on cloud computing, artificial intelligence (AI), machine deep learning and big data, and were impressed by the continuous capacity expansion and speed enhancement of cloud computing, which lead to user-friendly solutions applying big data and AI. Enterprises can make use of technologies to improve business flow, enhance efficiency and restructure operation models, so as to promote business development. It is expected that in the coming 3 to 5 years, applying AI and machine deep learning to provide new solutions to different businesses will be the major development trend.

Cloud computing provides a more cost-effective and flexible capability to conduct analysis and comparison of huge volume of data. For example, it allows computers to recognize massive pictures and images, conduct statistical analysis and comparison and even identify the hidden relevancies between data. The result calculated by cloud computing sometimes may even be more accurate than those by experienced professionals with relevant knowledge. This is not possible before high speed computing is available. With this, more enterprises now conduct researches on the application of machine deep learning in pathology studies, clinical diagnosis, autonomous driving technology, as well as town and traffic management, etc.

It is expected that the handling of different procedures, no matter outdoor mechanical procedures or office formatting procedures, will be much easier with machine learning. This does not only enhance efficiency and lower production cost, but also assist enterprises to improve user experience, and release resources for the development of new services. However, we must also strengthen the training, retraining and skill upgrading of manpower, so as to bring benefits arising from I&T development to enterprises and their employees.

The core of I&T and R&D development is nurturing and pooling talents, and building up a vivid ecosystem. To address the funding needs of I&T companies in different stages, we have been promoting the collaboration between the financial services and the I&T sectors. For example, angel funds, private equity funds and venture funds can provide suitable support to start-ups at their different stages. As regards private equity funds, most of them are currently operated offshore. We have revised our legislation and will consider introducing a more competitive tax arrangement to attract these funds to set up and operate in Hong Kong.

In this trip, I also noted that the significant commitment in I&T by Hong Kong in recent years, and the development potential of the Guangdong-Hong Kong-Macao Greater Bay Area have attracted the attention of investors and tech companies in the Silicon Valley. The ecosystem of I&T in Hong Kong is indeed taking shape. As at December last year, there are 2600 start-up companies in Hong Kong, amongst which 8 are valued as a “unicorn”.

With the implementation of various initiatives, including the provision of $10 billion to establish two innovative clusters in the Science Park, which focus on healthcare technologies (Health@InnoHK) as well as AI and robotics technologies (AIR@InnoHK), many international and Mainland renowned universities or research institutions have expressed interest in collaborating with Hong Kong through these clusters. More details are expected to be finalised in this year. These initiatives will help promoting the application of I&T in Hong Kong, pooling talents, and attracting more research institutions and tech companies to Hong Kong.

To build up Hong Kong’s I&T ecosystem, solid basic scientific research, realisation of R&D results, tech enterprises, entrepreneurs, funding, talents and a conductive social and institutional environment are all essential elements. We will continue to work on these areas to further promote the I&T development in Hong Kong.

April 14, 2019