Around two thirds of Hong Kong ICT enterprises (67.92%) are investing in the Greater Bay Area, according to a survey conducted by the Hong Kong Computer Society (HKCS).
The survey of 106 large scale local and multinational ICT corporations, conglomerates and SME tech entrepreneurs found that 72 have investments in the Greater Bay Area excluding Hong Kong.
Among these, 63.9% are investing less than HK$50 million, but 25% are investing over HK$100 million. Top cities for technology investments include Guangzhou, Shenzhen and Zhuhai, followed by Macau and Dongguan.
The main reasons motivating Hong Kong IT companies to invest in the Greater Bay area are the huge market and business opportunities (23.44%), sufficient supply of professional and technical talent (23.44%) and reasonable costs (18.75%).
Investments are mainly centered around research and development, marketing and promotion, as well as consulting services. On the research and development front, respondents are mainly focused on the research and applications of AI and IoT.
"The Greater Bay Area is comprised of Hong Kong, Macau and nine Guangdong cities including Guangzhou and Shenzhen. This represents a population of 67 million people with a combined GDP that is 12% of the national economy,” HKCS president Ted Suen said.
“This provides enormous opportunities for collaboration and business synergies among the eleven cities as well as a united force to world markets.... As the demand for digital and business transformation in the Greater Bay Area continues to grow, there will be enormous potential for IT professionals to explore in the region."
But Suen noted that there are still only a small proportion of local companies investing in areas including manufacturing, and hardly any angel or venture capital investors from Hong Kong investing in the region.
In addition, around 60% of respondents report having no new investment plans for the region for 2019. Factors inhibiting further investment include regulation and tax issues, cost concerns and fears that the market is not open enough.
Among the companies not planning new investments in the region, 17.2% meanwhile stated that they are following the policies of their parent company.
“It's very natural that the investment intentions of the multinational technology companies in Hong Kong are affected by the parent company's policies; however, it is worth the attention of the authorities of the Greater Bay Area, as many companies still have doubts about the domestic regulations and tax issues, as well as lack of preferential policy, cost issues and market openness of the Mainland, etc., that hinder their investment decisions," Suen said.
“It's necessary to step up publicity and conduct more tours to the region to let Hong Kong's IT companies have a better understanding of the cities in the Greater Bay Area and their development potential," Suen added.
Despite these concerns, the survey also found that over 40% of companies investing in the Greater Bay area have confidence that these investments will pay off, and less than 16% are not confident.