Hong Kong's startup ecosystem is thriving, and the Shenzhen-Hong Kong technology cluster has been ranked the world's second largest, according to a new report from the Hong Kong Trade and Development Council.
The report found that as of 2016, some 2,000 startups were operating in Hong Kong. This grew a further 16% in 2017.
Science Park alone is home to more than 680 technology companies and around 13,000 technology professionals, while Cyberport has more than 800 community members.
Biotechnology, artificial intelligence, smart city and fintech are the strongest areas for development in Hong Kong, the report found. Major research focus areas include software as a service, the internet of things, analytics, robotics, virtual reality, and augmented reality.
Meanwhile R&D as a percentage of the gross domestic product is expected to double in the five years from 2017.
The report notes that Hong Kong ranked first in infrastructure out of 126 economies surveyed for the Global Innovation Index 2018. This index ranked Hong Kong as 14th overall with a total innovation score of 54.62 of a possible 100. This compares to 68.40 for innovation leader Switzerland.
The Hong Kong and Shenzhen innovation technology was also ranked second in the world after Toyko-Yokohama.
Government initiatives to support Hong Kong's innovation and technology sector are having the desired effect, the report indicates.
Historically, these initiatives have included setting up the Innovation and Technology Fund (ITF) with an initial HK$5 billion capital injection, establishing Cyberport and Science Park, and founding ASTRI.
More recent initiatives include the HK$2 billion Innovation and Technology Venture Fund, established in 2016 to co-invest in local innovation and technology startups, and the Technology Start-up Support Scheme for Universities, launched in 2014 to provide six local university with annual funding of HK$4 million to encourage technology start-ups.
In 2017, the government stepped up investment in innovation and technology development with a commitment to double expenditure as a percentage of GDP to 1.5% in five years. An additional HK$50 billion was allocated in the latest budget to promote innovation and technology development.