Hong Kong moved up one position on the second edition of the Asian Digital Transformation Index with an overall score of 62.3. This put the market behind only Singapore (78.0) and Japan (63.5), and well ahead of the regional average of 48.3.
By contrast, mainland China lagged on the index with a score of 36.4, with the market ranking in seventh place for the second time.
But if the US, Australia and the UK were included in the leaderboards, Hong Kong would rank sixth behind all these nations, and mainland China would rank tenth, the report states.
The research found that around 74% of the population of Hong Kong and 77% in mainland China now have access to superfast internet connectivity, which is considered a key enabler of digital transformation.
Hong Kong meanwhile ranked second behind only Singapore in terms of digital infrastructure, in part due to widespread access to highly affordable fixed broadband connectivity.
The city ranked third on the human capital component of the index -- which evaluates categories such as access to qualified digital talent, and fifth in terms of industry connectivity -- which includes indicators such as national plans for AI development and company-level technology adoption.
Hong Kong is one of seven markets in Asia that have formulated AI strategies backed with pubic R&D funding, the report finds.
“Notwithstanding the areas in which they continue to lag behind their western rivals, it is fair to say that organizations in most economies in the Index -- including those in its lower tier such as mainland China, India and Malaysia -- have access to the tools they need to bring about far-reaching technology-led change in their operations,” the report states.
“Many of the technology tools, such as software and virtual hardware, are also becoming more affordable to organizations thanks to the growth of cloud computing.”