Hong Kong boosts innovation credentials

Hong Kong is actively positioning itself as an international innovation and technology centre within the Guangdong-Hong Kong-Macau Greater Bay Area (GBA).

The Special Administrative Region (SAR) is implementing various initiatives to both enhance its competitiveness and contribute to the development of the region, including the creation of the Northern Metropolis. All this is in line with China’s 14th Five-Year Plan (2021-25).

‘The Ministry of Science and Technology of the People’s Republic of China has extended the favourable policies to Hong Kong. These policies, such as including Hong Kong experts in the national pool of experts, are expected to encourage the scientific research community in Hong Kong to contribute to the country’s needs,’ said Lillian Cheong, JP, Under Secretary for Innovation, Technology and Industry of the Government of HKSAR, speaking at the ACCA Hong Kong annual conference in September.

Ground-breaking technology

Cheong emphasised the advantages of the GBA, including its substantial GDP of over US$1.9 trillion and its large population with a per capita GDP of US$22,000.

‘Given the attention the central government put on the GBA, the national strategy has injected continuous impetus to the growth of Hong Kong,’ she said.

Hong Kong possesses distinct advantages in the GBA, particularly in scientific research and innovation. With well-known universities and ground-breaking technology, the SAR has demonstrated its strengths in basic scientific research, while its ability to attract top-tier researchers to its universities is encouraging.

Cheong highlighted Hong Kong’s abundant capital-raising capabilities and its mature and business-friendly environment, which attract businesses from mainland China and around the world.

Recognising the need for continuous support and long-term policies in innovation and technology, the Hong Kong government released the Innovation and Technology Blueprint in December 2022. This outlines some major directions for development: perfecting the innovation and technology ecosystem, promoting new industrialisation, growing the pool of talent and fostering the digital economy.

Pivotal role

The National 14th Five-Year Plan emphasises high-quality development, and different places have their own unique positioning to achieve the upgrading of the industrial chain.

‘Guangdong Province’s manufacturing policy focuses on attracting high-quality industrial projects both domestically and internationally, creating industrial clusters, and encouraging the development of specialised and sophisticated enterprises that produce new and unique products,’ said Daniel Chan, executive vice president and head of Greater Bay Area at HSBC during a panel discussion. 

He pointed out that although Guangdong province leads in terms of the number of intellectual property registrations, it focuses more on development than research, with a lack of emphasis on basic research.

‘Hong Kong can play an important role. The GBA encompasses different functions of the world’s leading bay areas, such as advanced industry, finance, and innovation and technology,’ said Chan.

Peter Mok, head of the Greater Bay Area at Hong Kong Science and Technology Parks Corporation (HKSTP), has seen first-hand the changing technology adoption landscape in Hong Kong.

‘Four to five years ago, not a lot of corporates were willing to adopt solutions and products from our tech ventures. However, we now witness more businesses collaborating with our park companies,’ said Mok.

He also highlighted the Hong Kong government’s support for adopting innovative products development by HKSTP’s park companies, which serves as a valuable endorsement for these enterprises seeking to expand overseas.

The Honourable Hai-long Shang, Legislative Council Member and consultant at SenseTime, an artificial intelligence company, suggested that within the GBA, the ecosystem should be further developed, with a focus on faster data transfer implementation.

He cited an example of the recent agreement between Hong Kong’s Innovation, Technology and Industry Bureau and the Cyberspace Administration of China in Beijing to promote cross-boundary data flow in the GBA.

Long-term outlook

Dr Gordon Yen, chairman of the Hong Kong Business Angel Network and founding managing partner of Radiant Tech Ventures, emphasised the importance of patient long-term investors to support the fast-growing technology start-up industry.

He also noted that the proposed restrictions by the US on investing in certain areas of China’s high-tech sector have already impacted investment sentiment in Chinese companies.

‘The restrictions may not significantly affect small-scale enterprises that are unsure of future development and rely more on domestic markets. However, for the enterprises to grow at a fast speed, the restrictions pose challenges,’ said Shang, adding that government support could help SMEs to develop.

Chan spoke of HSBC’s investments in this area to accelerate innovation and transformation in Hong Kong’s small businesses and mid-cap corporates as well as specialised funds for technology companies.

The bank also switched to a strategy of investing in companies before they become profitable, including making quantitative assessments, and this year it merged its two funds into a HK$3bn billion fund for new economy development.

‘We realised that when founding a new company, we need to provide support as an ecosystem and provide different support in different life cycles,’ said Chan.

Mok added that aside from investment, HKSTP also provides support in market promotion and talent development. ‘We have close connections with leading universities in Hong Kong and nurture talents from a very early stage through various programmes,’ Mok said.

Shang highlighted the potential in the technology and innovation sector, and encouraged accountants to seek opportunities in the future.