2018 Policy Address: Local R&D gets a boost for tech sector growth

Hong Kong SAR chief executive Carrie Lam delivered her second annual Policy Address yesterday before the Legislative council .

Chief Executive Carrie Lam yesterday delivered her second Policy Address with renewed commitment to the growth of the city’s innovation and technology (I&T) sector by introducing new initiatives and fresh round of funding.

Research and Development (R&D) received a big boost with the injection of $20 billion into the Research Endowment Fund of the Research Grants Council; the launch of a $3 billion Research Matching Grant Scheme; and the introduction of fellowship schemes for outstanding academics to strengthen the pool of talent in research and innovation and technology in Hong Kong.

This further impetus to develop Hong Kong into a R&D hub is coupled with incentives such as reduced taxes for local enterprises engaged in this activity.

“The bill  for providing enhanced tax deductions for qualifying R&D expenditure incurred by local enterprises has entered the final stage of scrutiny in the LegCo, the passage of which will benefit enterprises for their qualifying R&D expenditure in 2018‑19,” Lam said.

In looking back to her inaugural address last year, Lam said Hong Kong has made “good progress” in the eight major areas for I&T development for which the sector received its biggest funding boost of HK$50 billion.

According to Lam, the open data initiative is one of the areas where ongoing progress is being made.

“Last month we firmed up the policy and implementation measures on opening up government data to promote smart city development. The policy requires all government departments to formulate and publish their annual open data plans by the end of this year,” she said.

Furthermore, Lam added that the Hospital Authority (HA) is actively making preparations for a Big Data Analytics Platform, which will allow academic researchers to access HA’s clinical data. 

“The HA will also provide training for them to facilitate collaborative research projects,” she said.

In response to the industry’s long-time clamor for support of home-grown IT solutions, Lam said the government is set to revise its procurement program in 2019.

“We will introduce a pro-innovation government procurement policy in April next year. By raising the technical weighting in tender assessment, tenders with innovative suggestions will stand a better chance of winning government contracts,” she said.

“We will also enhance exchange with the sector and dissemination of procurement information to facilitate the participation of I&T start-ups and small and medium-sized enterprises (SMEs) in government procurement,” Lam added.

Meanwhile, the Policy Address made a big push for re-industrialization of the city’s manufacturing sector through the help of I&T.

“While Hong Kong is a service-oriented economy, high-end and high value-added manufacturing has a promising prospect, following the development of I&T and promotion of R&D,” Lam said.

For this purpose, the government is allocating $2 billion for launching a “Re-industrialization Funding Scheme” to subsidize manufacturers, on a matching basis, to set up smart production lines in Hong Kong.  The Innovation and Technology Bureau will work out the operational details of the scheme, such as the eligibility criteria and approval mechanism. 

She pointed out: “High-end manufacturing will generate R&D needs, which is conducive to raising R&D investment by the industries, thus contributing to robust and sustainable development of the R&D work of local universities and research institutes. High-end manufacturing will also provide quality jobs for local I&T talent, particularly young graduates.”

Other key I&T-related announcements during this year’s Policy Address include:

  • Allocation of $500 million for organizing an annual “City I&T Grand Challenge” in the next five years in order to promote the use of I&T in addressing livelihood issues. Various sectors to put forward I&T solutions to tackle issues closely related to our daily lives.
  • Promotion technology transfer by increasing the funding support to the Technology Transfer Offices of universities, the Technology Start-up Support Scheme for Universities, as well as the State Key Laboratories and Hong Kong branches of the Chinese National Engineering Research Centre.
  • The funding for these three relevant schemes under the I&T Fund will be doubled. The maximum annual funding for the Technology Transfer Office of each university will be increased from the existing $4 million to $8 million; the maximum annual funding for each specified university under the Technology Start-up Support Scheme for Universities will also be increased from the existing $4 million to $8 million; and the annual funding for each State Key Laboratory and each Hong Kong branch of the Chinese National Engineering Research Centre will be increased from the existing $5 million to $10 million to support scientific research and commercialization of outputs.
  • The issuance of the first batch of virtual banking licenses by the end of 2018 or early 2019
  • The opening up of appropriate government premises for the installation of 5G base stations by mobile service operators

In conjunction with the 2018- 2019 Policy Address, the government also released yesterday the 2018-2019 Policy Agenda that set out have set out 244 new initiatives and 470 on-going initiatives.

A number of them will impact the development of Innovation and Technology in the city. Some of these key new initiatives are:

  • Establish at the Hong Kong Science Park two research clusters on healthcare technologies and artificial intelligence/robotics technologies. Proactively attract top local, Mainland and overseas universities, research institutions and technology enterprises in the two technology areas to join the clusters and undertake collaborative researches
  • Double the funding for the technology transfer offices of designated universities; funding provided to designated universities under the Technology Start-up Support Scheme for Universities; and funding provided to the State Key Laboratories and Hong Kong branches of Chinese National Engineering Research Centres.
  • Organize a “City I&T Grand Challenge” to invite different sectors to provide technology-based solutions to livelihood issues. In addition to prize money, the winning solutions will be tried out in suitable public organizations with a view to implementing and refining the solutions
  • Support the HKSTP Corporation to develop research-related infrastructure and facilities to strengthen support for its tenants and incubatees
  • Enhance the Cyberport Incubation Programme and the Cyberport Creative Micro Fund, and introduce new schemes such as the Overseas/Mainland Market Development Support Scheme and the Easy Landing Scheme, to support Cyberport’s start-ups and tenants.
  • Support Cyberport in promoting the development of e-sports in Hong Kong, including providing a dedicated e-sports competition venue, organizing local and regional competitions and major events, launching training programmes and public promotion activities, supporting the industry and nurturing talent
  • Proactively participate in building the Greater Bay Area into an international innovation and technology (I&T) hub by leveraging Hong Kong's strengths in areas such as technology research and development and internationalization
  • Enhance the GovHK portal by introducing artificial intelligence and chatbot functions to facilitate the search and use of e-Government services, and step up the implementation of e-Government with the application of eID
  • Establish a Smart Government Innovation Lab to co-ordinate and facilitate the promotion of Smart Government, including inviting the industry to submit proposals for information technology application and product suggestions for various public services, as well as arranging trials and technology testing for suitable proposals, thereby allowing government departments to effectively formulate innovative measures to improve public services and create more business opportunities for local start-ups and SMEs
  • Launch a pilot chatbot service at the 1823 call centre to answer public enquiries.
  • Allocate an additional $500 million for the TechConnect (block vote) to further promote the use of technology by government departments with a view to enhancing service quality.
  • Provide $2 billion to the HKSTP Corporation for developing facilities for advanced manufacturing in the Industrial Estates
  • Facilitate the development of the fifth generation (5G) public mobile service by making available radio spectrum in a timely manner and by implementing facilitation measures for opening up suitable government premises and public facilities for mobile network operators to roll out 5G networks
  • Increase the transparency of government information and data and implement more comprehensive measures to open up more government data, including publication of annual open data plans by bureaux/departments by end-2018
  • Encourage the development of online dispute resolution, and give policy support to the development of a B&R e-arbitration and e-mediation platform by non-governmental organizations so that Hong Kong will be able to provide efficient and cost-effective online dispute resolution services. In addition, we also give policy support to the development of a smart contract platform for use by enterprises of countries along the B&R in exploiting developments in LawTech to facilitate deal making and dispute resolution.
  • Implement the $1 billion Construction Innovation and Technology Fund to encourage wider adoption of innovative technology to transform the construction industry, thus boosting the industry’s capacity to meet construction demands
  • Apply innovation and technology to enhance municipal services by introducing automated cleaning machines and technology for trial use at different venues, with a view to assessing their applicability