Blog

Promoting innovation and technology development

The COVID-19 pandemic, which has lasted for a year, has dealt a heavy blow to the economy and livelihood of Hong Kong. The Government has spared no effort to contain the epidemic as soon as possible by adopting various anti-epidemic measures, including imposing targeted group testing and district-specific compulsory testing, expanding gradually the scope of testing and strengthening case tracking, with a view to restoring citizens’ lives, travels, family caretaking and work to the greatest extent possible. All along, I have rendered full support on the financial front to ensure that our anti-epidemic works are adequately equipped and funded.

We are also actively strengthening the application of technology to assist with the anti-epidemic work, including the development of electronic waistbands for home quarantine and CuMask. In addition, the Innovation and Technology Commission has funded a number of research and development (R&D) projects for anti-epidemic products and technology applications, such as the use of touchless lift button system to reduce physical contacts.

The driving force of technological development is to address the needs of the society, citizens and consumers or to resolve the pain points in business operations. They are the key behind innovation in products and services. When technology and innovative ideas converge, they can bring new impetus to promote sustainable economic development. However, R&D and application of technology require not only a substantial amount of resources, but also a suitable context. The involvement and support of the Government is therefore crucial, especially in early stages of innovation and technology (I&T) development. This includes allocating public resources to generate pull factors, introducing policies and creating an enabling environment for the I&T industry.

Over the recent years, I have been promoting the enhancement of the I&T ecosystem through policy measures and resource allocation in the Budget. Relevant initiatives include nurturing and pooling talents, attracting enterprises, encouraging scientific research, inducing market demand and establishing smooth financing channels. With years of work, our efforts have gradually borne fruits.

Talent is the key to I&T development. In order to nurture and pool talents in the field, the Researcher Programme and the Postdoctoral Hub were merged into the Research Talent Hub in July 2020 with an increased funding. Each eligible company or organisation may receive funding to employ up to four I&T talents with bachelor’s, master’s, or doctoral degrees, which provides the employers with greater flexibility in engaging scientific researchers for their R&D work. The scheme has so far funded more than 6 000 research positions, involving more than $2 billion of funding. As regards the Technology Talent Admission Scheme, about 220 people have been granted visas or entry permits since the introduction of the scheme in 2018 and almost 30% of them hold doctoral degrees.

In the Budget last year, I set aside $40 million to arrange short-term I&T internships for students taking STEM programmes in local universities. The STEM Internship Scheme, which was launched in June 2020 on a pilot basis, is well-received by the academia and the industry and has benefited more than 1 000 university students.

In order to provide secondary school students with more resources and opportunities to explore the application of technology through interest and practice, I allocated $500 million in the 2019-20 Budget to implement the IT Innovation Lab in Secondary Schools scheme. Each secondary school can apply up to $1 million of funding to organise information technology-related extracurricular activities. Since its launch in December last year, more than 40 schools have applied funding for organising courses on artificial intelligence and mobile application programming, as well as participating in robotics competitions.

In terms of building up business clusters, I allocated $10 billion in the 2018-19 Budget to establish two world-class I&T platforms. Through attracting internationally renowned universities, organisations or business entities to set up R&D laboratories at the Science Park, the initiative aims at strengthening collaboration in scientific research and enhancing our local R&D standard and capability, with a view to making Hong Kong an international scientific research centre. The two platforms, namely “Health@InnoHK” and “AIR@InnoHK” which focus on healthcare technologies and artificial intelligence / robotics technologies respectively, have been well-received.

To encourage research and application, we extended the funding scope of the Public Sector Trial Scheme (PSTS) under the Innovation and Technology Fund in early 2020, so as to assist more local technology companies to realise and commercialise their R&D outcomes. In March 2020, a special call was launched under PSTS to support product development and application of technologies for the prevention and control of the COVID-19 pandemic. More than 60 applications have been approved so far, involving funding of over $100 million. About half of the applications were submitted by local technology companies, an example being the touchless lift button system.

On promoting re-industrialisation, the Government launched the $2 billion Re-industrialisation Funding Scheme in end-July last year to subsidise manufacturers on a matching basis to set up new smart production lines in Hong Kong. The funding ceiling is one-third of the total project expenditure or $15 million per approved project, whichever is lower.

Separately, I enhanced the Technology Voucher Programme (TVP) in last year’s Budget by raising the Government’s funding ratio for each TVP approved project from two-thirds to three-quarters. The funding ceiling per applicant has been increased from $400,000 to $600,000 and the maximum number of approved projects is also increased from four to six. More than 3 000 projects have been approved so far, amounting to over $500 million of funding.

The Budget last year also featured our support for the development of I&T infrastructure, such as Phase II of the Science Park Expansion Programme, the Cyberport Expansion Project, the Advanced Manufacturing Centre in the Tseung Kwan O Industrial Estate and the Microelectronics Centre in the Yuen Long Industrial Estate. All these projects are progressing steadily.

On the development of smart city, the Government has released the Smart City Blueprint for Hong Kong 2.0 in December 2020, proposing over 130 smart city initiatives. Meanwhile, the “iAM Smart” Platform launched recently would allow citizens to access government and commercial services via the one-stop personalised service platform using a single digital identity. Services currently available include eTax, renewal of vehicle licenses, registration for employment services by job seekers, and services provided by electricity and gas providers. It is expected that by mid-2021, the number of services accessible through “iAM Smart” will increase to about 110.

As for creating smooth financing channels for the I&T industry, we revised the listing rules in 2018 to permit the listing of companies with weighted voting right structures and pre-revenue or pre-profit biotechnology enterprises in Hong Kong, and to provide facilitation for companies listed in other markets to come to Hong Kong for secondary listing. Also, the limited partnership fund regime which was introduced in August last year, together with other concessionary measures in the pipeline, would largely enhance our attractiveness to private investment funds (including private equity and venture capital funds), thereby facilitating the channelling of capital to I&T companies of different development phases. In fact, there are already over 70 relevant fund houses incorporated and registered in Hong Kong in the past few months.

We have been investing in and promoting I&T development in all aspects over the years, including developing I&T infrastructure, pooling talents and companies, allocating more resources to encourage research and application, and attracting private funding, with a view to building a vibrant I&T ecosystem. While there are still many challenges ahead, they would provide the motivation for us to keep exploiting creativity and exploring solutions, so that the development of I&T can better serve the community, improve the quality of life, and bring ongoing impetus for the diversified development of Hong Kong’s post-pandemic economy.

24 January 2021