The Hong Kong technology sector is largely underwhelmed with the 2018 Policy Address delivered by Chief Executive Carrie Lam yesterday at the Legislative Council, giving mixed reviews.
This despite Lam’s assertion that the innovation & tech (I&T) sector has made “good progress” over the past year, and providing new initiatives and fresh round of funding.
The general business community through Hong Kong General Chamber of Commerce (HKGCC) gave the policy address a thumb ups.
On the I&T-related section of the speech, HKGCC chairman Aron Harirela said in a statement: ““The sector is essential for Hong Kong’s continued development as a world-class city, so we are particularly pleased to see the injection of an additional $28 billion of funding in areas including university research and reindustrialization”.
However, Airbnb, one of tech-oriented companies bringing disruption to established industries, aired its disappointment after the speech.
“It’s disappointing that months since the formation of the Policy Innovation and Coordination Office, little progress has been made towards the objectives set out in last year’s policy address – ‘reviewing outdated laws’ and promoting ‘balanced, healthy, and sustainable development of the tourism industry’,” the company said in a press statement.
It pointed out that the HAGAO (Hotel and Guesthouse Accommodation Ordinance) Amendment Bill that has been “pushed forward since then threatens to further restrict healthy, sustainable tourism in Hong Kong”.
Computerworld Hong Kong reached out to several tech insiders for their insights on this year’s Policy Address:
Charles Mok, legislator for the IT sector
Overall impression: The manpower problem facing the ICT sector is imminent but this year’s Policy Address still issues no support to solve the problem. The government continues to set out more funds but the progress of the 8 major areas of I&T development issued in last year’s Policy Address is still slow. I am concerned that the money-driven initiatives this year benefit more on long term R&D and re-industrialization development but little on front-line tech workers and ICT companies.
Comments on I&T-related policies: The 2018 Policy Address adopted some of my proposals and I welcome the government to implement these new measures:
- A new programme of “City I&T Grand Challenge” to invite different sectors to provide technology-based solutions on livelihood issues.
- A pro-innovation government procurement policy will be released in April next year and a Smart Government Innovation Lab will be established to co-ordinate and facilitate the promotion of Smart Government, including inviting the industry to submit proposals for IT application and product suggestions for various public services.
- All government departments will draw up and publish annual open data plans by the end of this year.
- Real-time transport data: Apart from calling for the public transport operators to open up real-time operational data for public consumption free of charge, this year’s Policy Address also includes support to develop a data collection system and mobile application for green minibuses, for providing real-time arrival information of green minibus routes.
- 5G development: Radio spectrum with a total of 4 500 MHz in various frequency bands for assignment to mobile service operators will be released next year and the government will proactively open up appropriate government premises for the installation of 5G base stations by mobile service operators.
- The launch of a pilot chatbot service at the 1823 call center to answer public enquiries.
Areas for improvement: I am disappointed that no new policies were issued on tech talent nurturing, STEM education and review of outdated regulations. The work of reviewing outdated laws that are hindering the adoption and development of I&T is not only seriously lagging behind our international counterparts but it is also going in the opposite direction.
There is also a lack of support for internationalization of Hong Kong’s technology sector. The government should support our local SMEs to go global rather than only to focus on the Greater Bay Area development.
Stephen Lau, secretary general (honorary), Hong Kong Computer Society
Overall impression: Overall, I think it is positive. It is following up on various initiatives. In particular, we have given three proposals to the government which has now appeared on the Policy Address. We are not the only ones to suggest these measures but they have been adopted.
One of these measures is on procurement. We said that the government procurement procedures should try to adopt measures to encourage the adoption of local innovative products. On that the government has responded saying it will revise the procurement procedure. Early next year, they would come up with a revised procedure whereby they would encourage or give more marks to innovation, secondly to be able to adopt locally produced innovative products – to give them priority and special consideration such that our industry and particularly those startups and SMEs can benefit. So if the government can be a pilot site or to adopt their products for testing and for evaluation, these local companies can create a branding for them to pursue further market in Hong Kong as well as overseas.
Second, we have not seen much action in the past year relating to the revision of existing and outdated legislations so that we will not block advancements in innovation towards a smart city. The government is saying they are now looking into this – particularly they are looking at the telecommunications legislation to see how we can best to suit technology development in this area.
Third is on R&D. Many times, the difficult part is the commercialization – how to turn it into a product that is commercially viable. A lot of R&D stumbles on this last-mile in terms of commercialization. We are happy to see that there is now improved funding in universities for schemes for commercializing the R&D efforts in Applied research.
Areas for improvement: There are also other measures that we have proposed but have not yet mentioned in this particular policy address. We will continue to work with the government to further pursue some of them
For example, we have a Technology Talent Admission Scheme implemented this year, which will facilitate the import of talents for the right innovation. This is a good plan. However, we suggested that half-way through the duration of the scheme – within one and half years, we should do a checkpoint to see how effective it is, whether it requires some midpoint correction and all that.
The other one has to do with the Greater Bay Area (GBA). The GBA requires collaboration among the cities in Guangdong and Hong Kong and Macau. We should actually look more into our positioning. How to sort the centers of excellence in selected technologies or selected areas that can then be complementary and supplementary to the other cities. How do we the sharing, how do we do the collaboration, what areas do we actually focus on? Recognizing our current and past performance and excellence areas, we will be able to be sort out how we can contribute to the GBA’s overall success. So, we have not seen a very clear definition of our positioning of Hong Kong in the collaboration with the GBA. What does being a “super connector” means? It is another level of clarification, another level of elaboration. We want to see more substance terms of the implementation aspects and what areas we should focus upon in order to perform this task of super connecting.
Furthermore, here is a scheme to promote R&D in the industry. There is a scheme upon which if you take PhDs to do applied research in enterprises, then the government will provide a subsidy of HK$30,000.
This is good, but we have mentioned that for applied research in industries, not only PhDs are good. There could be master-degree level people of recognized universities who could also perform the role of doing applied research in industries. So we should also consider subsidizing not only PhDs but qualified people with master’s degrees from recognized universities.
Rating: 7.5 to 8
Peter Smith, partner, CIO Connect
Overall impression: It is encouraging to see the Government provide further funding to promote I&T with an injection of an additional $28 billion. It’s particularly pleasing to see the focus on the adoption of technology in delivering public services, where Hong Kong is a laggard today compared with its global peers.
An important aspect to consider here though is that funding alone, together with the outstanding can-do workforce we have in Hong Kong, will not be enough for Hong Kong to reinvent itself as an international I&T center.
To turn this concept of an international I&T center into a reality will require exemplary execution capabilities that extends beyond the know-how with our existing pool of talent that we have in our government departments, enterprises and research facilities today. An injection of additional technology leadership, and critical emerging technology expertise will be required to supplement our existing I&T workforce to realize this fundamental and bold vision for Hong Kong. “
Areas for improvement: Disappointing to not see further measures taken by the government to improve roadside air quality by providing stimulus measures which will encourage the adoption of electric transportation for both the public and private transport sectors. Hong Kong is of course ideally suited to being a leading exponent of e-transportation services given our dense urban living environment and world class energy & transport infrastructure. This is also a lost commercial opportunity for our great city.
Winnie Tang, honorary professor at the Department of Computer Science, University of Hong Kong and founder of Smart City Consortium
Overall impression: Besides a land bank, we also need a talent bank for I&T development in Hong Kong. It is gratifying to see the Chief Executive’s continuous commitment to foster development with specific and practical proposals in the 2018 policy address, further to the unprecedented focus on technology and innovation (I&T) development in last year’s policy address.
Comments on I&T-related policies: The focus of this year’s I&T section is on re-industrialization—the CE has put together HK$4 billion for a Re-industrialization Funding Scheme, and the Hong Kong Science and Technology Parks Corporation (HKSTP) is to “identify suitable land for building facilities required by the dedicated advanced manufacturing sector.” Compared to last year of which the focus was on the upstream of the supply chain, such as research and startups, the measures this year can encourage downstream production. This helps to form a dynamic and healthy ecosystem in Hong Kong.
Areas for improvement:
- Lack of determination on opening data and sharing it with the public
Data is seen as the “new oil”, it is a key raw material for promoting big data analysis, artificial intelligence and other creative and digital economy.
The CE has mentioned to require “all government departments to formulate and publish their annual open data plans by the end of this year.” But no timeline and detailed plans were available as to what and when to open the data to the public.
The government has collected a large amount of data and should take the lead in opening the data, by means of a common spatial data infrastructure (CSDl). Europe, America and Singapore have longed established this kind of platform. But ours will not be fully operational until 2023. This will likely weaken Hong Kong’s leading position in innotech development.
- Lack of focus on recruiting and retaining talent
Though the government has introduced various initiatives in the last 12 months, such as the Technology Talent Admission Scheme and the Technology Talent Scheme, we are not competitive enough in terms of acquisition of global scientific research talents.
Australia’s Global Talent Scheme allows two types of company to recruit talents from overseas: (1) technology-based or STEM (science, technology, engineering, and mathematics) related start-ups; (2) Enterprises with an annual turnover of AUD$4 million may also sponsor overseas experienced professionals. These visas last for four years, and the talents can apply for permanent residency in the third year. As for Canada, its new policy shortens the application time for admitting the innotech talents and their family members to only two weeks.
Do we have the sufficient edge to attract overseas talent?
- Innovation should be emphasized in procurement
Currently, assessment of government tender skews towards pricing with weighting of 70%. The weighting of technical expertise is only 30%. By next April, tenders with innovative suggestions will stand a better chance of winning government contracts as proposed by the CE today. I don’t know how much the new weighting will be. May I suggest the proportion of technical expertise to over 50% to reflect the importance and emphasis on innovation?
- HK$17 billion R&D budget is missing
The CE has promised to raise the R&D expenditure from 0.73% of the Gross Domestic Product to 1.5% in five years’ time, and has been setting a goal of HK$45 billion a year. However, only HK$28 billion has been ear-marked so far in the Policy Address. Are we going to add the outstanding of HK$17 billion later?