Hong Kong Financial Secretary Paul Chan delivered his third Budget Speech yesterday with a raft of new monetary sweeteners aimed at promoting the city’s innovation and technology (I&T) development.
“The development of I&T will bring huge economic benefits to Hong Kong,” Chan said. “The intellectual property so generated can be commercialized to drive ancillary economic activities, thus creating quality employment opportunities and enabling people to live comfortably by adopting new technology.”
To date, the current government has injected over HK$100 billion to I&T development, focusing on four major areas biotechnology, artificial intelligence, smart city and Fintech.
Technology startups get a big boost
For the 2019-2020 budget, Chan set aside HK$5.5 billion for the development of Cyberport 5 to accommodate more technology companies and startups. The expansion project is expected to provide about 66,000 sqm of floor area, and include facilities such as offices, co-working space, conference venues and data service platforms.
“This will serve to attract more quality technology companies and start-ups to set up their offices in Cyberport and provide a pathway for young people to pursue a career in I&T,” Chan said. “We will proceed with the statutory town planning procedures to commence construction in 2021 for completion in 2024 at the earliest.”
Taking note that many local technology startups find their roots in universities, this year’s budget raises the maximum annual funding under the Technology Start-up Support Scheme for Universities from the existing HK$4 million to HK$8 million—for each university—starting from 2019-20 to better nurture university start-ups.
“Technology enterprises and start-ups in particular, are an integral component of the I&T ecosystem, with an important role in facilitating commercialization and application of R&D results as well as developing innovative ideas,” he said.
Launched in 2014, the scheme has so far supported 188 start-ups established by university teams to venture beyond their campus. Some of the funded start-ups have secured investment exceeding HK$300 million.
Meanwhile, the Corporate Venture Fund (CVF), which co-invests on a matching basis with angel investors or venture capital funds in tenants and incubatees of the Science Park, will be expanded to HK$200 million.
“The CVF has already committed the entire fund of HK$50 million to invest in nine projects and acted as a catalyst in attracting more than $670 million from co-investors,” Chan said.
Government puts major stakes in R&D
The government continues to aggressively push Hong Kong’s “unique edge” in R&D as a foundation for the city’s development of I&T. Chan is allocating not less than HK$800 million in the coming five years to support more research and development work, and the realization of R&D results by universities, key laboratories and engineering research centers.
“In respect of applied R&D, funding for Technology Transfer Offices of designated universities, the Technology Start-up Support Scheme for Universities, State Key Laboratories and Hong Kong branches of the Chinese National Engineering Research Centre will be doubled to support more R&D work and the realization of R&D results,” Chan said.
Last year, Chan has already earmarked In HK$10 billion into the Innovation and Technology Fund (ITF) schemes, particularly for the establishment of two innovative clusters in the Science Park, namely “[email protected]” focusing on healthcare technologies and “[email protected]” focusing on artificial intelligence and robotics technologies.
“The two clusters give us an edge in pooling top-notch local, Mainland and overseas universities, scientific research institutions and enterprises to undertake R&D activities together,” Chan noted. “A number of leading universities like Harvard University, Stanford University, Imperial College London, University College London and Johns Hopkins University have expressed interest in joining the two clusters and collaborating with local universities.”
Furthermore, Chan is adding more cache into the HK$20 billion injected into the Research Endowment Fund of the Research Grants Council under the University Grants Committee (UGC), which was announced in the last Policy Address.
The 2019-2020 budget has set aside a dedicated provision of HK$16 billion for UGC-funded universities to enhance or refurbish campus facilities, in particular the provision of additional facilities essential for R&D activities (such as laboratories).
“I hope that universities will, in developing or enhancing hardware, give due and priority consideration to I&T needs to ensure that their teaching and research facilities can meet the objective of nurturing I&T talent,” Chan said.
The budget also proposes increasing the monthly allowance for researchers to a maximum of HK$21,000 under the Researcher Programme and extends from two to three years the funding period under the Researcher Programme and the Postdoctoral Hub Programme.
“This means R&D institutes or enterprises can hire relevant R&D talents for three years which give them ample time for demonstrating their professional strengths in R&D projects,” Chan said.
He also allocated provisions for accommodation is an issue pertaining to the recruitment of researchers.
“The HKSTPC is constructing an InnoCell, which will offer about 500 residential units with flexible design to tenants, incubatees or visiting researchers in the Science Park. This project is expected to be completed by 2021,” he said.
Smart city and re-industrialization
Chan also allocated the budget in pursuant of the proposal from the last Policy Address for the HKSTP to build dedicated facilities required by the advanced manufacturing sector in industrial estates to facilitate more manufacturers to set up operations in Hong Kong,
“We plan to inject HK$2 billion into the ITF for launching a Re‑industrialization Funding Scheme to subsidize manufacturers on a matching basis to help them set up smart production lines in Hong Kong,” Chan said.
He added: “These initiatives for developing real high-end production will help reduce our economy’s over-reliance on service industries. The Innovation and Technology Bureau (ITB) will seek funding approval from the Legislative Council (LegCo) as soon as possible, with a view to implementing these initiatives in the second half of this year.”
Other I&T-related items in the current budget include:
- Earmarked HK$500 million to implement the IT Innovation Lab in Secondary Schools Programme in the coming three school years
- Earmarked HK$150 million to support the development and initial operation of an online arbitration and mediation platform by non-governmental organizations to enhance Hong Kong's role as an international hub for legal services
- Allocation of HK$120 million to extend the public EV charging networks at government car parks.
- Setting up an Academy of Finance in mid-2019 to groom financial talent.
- Promoting the use of the Faster Payment System for payment of government fees and charges