A year ago, President Xi Jinping swore in the chief executive and principal officials of the sixth-term government of the Hong Kong Special Administrative Region. The national 14th Five-Year Plan (2021-25) clearly states Hong Kong’s position and mission to develop as an international innovation and technology (I&T) center.
Under the leadership of Chief Executive John Lee Ka-chiu, Hong Kong’s I&T development is now stronger than ever and has entered a new phase of acceleration. A review of the milestones reached in the development of the I&T ecosystem over the past year would help us understand its position and the road ahead.
The most obvious change under the current administration is that I&T has been given a more prominent place in the master plan for Hong Kong’s development. The overall development philosophy has shifted from the previous “positive noninterventionism” and “big market, small government” to better integration of a “capable government” and a “highly efficient market”. In areas where abundant resources and government guidance are needed, the government has taken the initiative to lead and inject development energy. Meanwhile, in areas where market forces are needed to promote high efficiency in resource allocation, the government has created favorable conditions to unleash the potential of the private sector. If Hong Kong were an athlete, the above would be the spirit and essence in joining the global I&T race.
The above changes were first reflected in the Policy Address delivered in October last year, in which the chief executive proposed measures to proactively compete for enterprises and talent. Then, at the end of last year, the Hong Kong Innovation and Technology Development Blueprint promulgated four broad development directions and eight major strategies. This was also the first time in more than two decades that Hong Kong had formulated a clear road map and a systematic strategic plan for I&T development. The budget announced earlier this year also set out three main directions to promote high-quality development, in line with the national development strategies. The overall objective of these policies/measures is to build a new pillar of economic growth and promote industrial diversification more comprehensively, with the ultimate aim of creating more quality jobs and entrepreneurship opportunities for all residents. In other words, these policies/measures set the direction and the goal of Hong Kong’s I&T race.
So, as an “athlete”, what should Hong Kong do to prepare itself, how should it build up its physical strength, and how should it run strategically on the track? In fact, the government has put forward a number of innovative measures and has made steady progress. The following are examples.
In terms of building up the industry chain, the Office for Attracting Strategic Enterprises is working to attract high-potential and representative strategic enterprises from around the world, particularly in strategic industries such as life and health technology, artificial intelligence (AI) and data science, fintech, advanced manufacturing and new energy. They are likely to be located in the Hong Kong-Shenzhen Innovation and Technology Park (HSITP), which is now under full construction. HSITP and the areas around Lok Ma Chau/San Tin will be consolidated to form the San Tin Technopole, which, together with the Shenzhen Innovation and Technology Zone, will form the Shenzhen-Hong Kong Innovation and Technology Cooperation Zone of about 540 hectares. As for the service industry, the Digital Economy Development Committee, which is chaired by the financial secretary, is conducting in-depth studies on strategies for its digital transformation, including cross-border data flows, digital infrastructure, industry subsidy schemes, etc.
On the capital side, as a flagship for co-investment in enterprises with strategic value, the Hong Kong Investment Corporation Ltd (HKIC) has been set up to manage the Co-Investment Fund of HK$30 billion ($3.83 billion). The HKIC will also manage the Hong Kong Growth Portfolio (HK$22 billion), the GBA Investment Fund (HK$5 billion) and the Strategic Tech Fund (HK$5 billion), which were launched in recent years. This year, the HKEX also launched the New Specialist Technology Company Listing Rules, which provides a convenient funding channel for specialist tech companies in industries such as cloud services, AI, semiconductors, electric vehicles and advanced materials.
On the research and development (R&D) front, the five government-established research centers, 16 State Key Laboratories and six Hong Kong branches of Chinese National Engineering Research Centers are in selected focus areas and foster commercialization of R&D outcomes and technology transfer. Another key project, the InnoHK research clusters, has commenced international collaboration with a focus on healthcare technologies, AI and robotics. The government also announced the HK$10 billion Research, Academic and Industry Sectors One-plus Scheme, which aims to accelerate the “from 1 to N” transformation and commercialization of R&D results. In addition, the government has expanded the Talent List. Together with the existing Top Talent Pass Scheme, the aim is to attract more high-level talent to come and meet Hong Kong’s development needs.
This year’s budget earmarked HK$6 billion to subsidize universities and research institutes to establish thematic research centers. The aim is to encourage cross-university and cross-institutional collaboration. A further HK$3 billion is earmarked for basic research in frontier technology fields such as AI and quantum technology. The government also plans to establish a Microelectronics Research and Development Institute to advance in the core technologies of the modern ICT industry. On the digital infrastructure front, the government is conducting a feasibility study on the establishment of the first AI supercomputing center. Such advanced hardware will directly upgrade the computing capabilities of R&D institutions and allow tech companies more computing resources in developing big-data-related business.
Together with the cumulative efforts of previous administrations, these initiatives have enabled Hong Kong to achieve some success. According to the IMD World Digital Competitiveness Ranking 2022, Hong Kong ranks third in the Asia-Pacific region and ninth in the world. Our two flagship I&T hubs, Cyberport and Science Park, are home to more than 3,000 tech enterprises, of which the startups have accumulatively raised over HK$110 billion, indicating that the local I&T community is growing rapidly. Hong Kong is no slouch when it comes to “hard technologies” either. PolyU and CUHK won two grand prizes at the 48th International Exhibition of Inventions Geneva, including a highly efficacious myopia-control spectacle lens and an anti-obesity and insulin-sensitizing drug.
Hong Kong is not alone on the running track. We need to attract like-minded “runners” to join us and make our I&T ecosystem more vibrant. That was why, when our community was gradually resuming normalcy with the economy beginning to stabilize, the government organized the Global Financial Leaders’ Investment Summit. Thereafter, the administration issued the “policy statement on the development of virtual assets” during Hong Kong FinTech Week to demonstrate its vision of developing into an international virtual asset center. This year, the government hosted the Digital Economy Summit 2023 to discuss the trends of smart cities, digital economy, big data and reindustrialization with global experts. The recent Wealth for Good in Hong Kong summit was a key initiative to promote Hong Kong’s asset and wealth management industry and encourage more family offices to establish a presence in our market. All these events will attract international and mainland enterprises and talents to Hong Kong, bringing unlimited opportunities and creativity to our I&T ecosystem.
Hong Kong is not an early starter in the global I&T race. Despite the current achievements, we are still far from the goal. Fortunately, the current administration has adopted a new mindset in terms of industrial policies, capital, R&D and talents, etc, to continuously enhance Hong Kong’s competitiveness. As long as the government persists in implementing these policies and measures while maintaining a free and open society and economy, I am optimistic that Hong Kong’s I&T development will enter a chapter of acceleration and the government will achieve breakthroughs in its remaining four-year term.
The author is a Legislative Council member representing the Technology and Innovation Functional Constituency, a tech entrepreneur and a tech investor.
The views do not necessarily reflect those of China Daily.
