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Financial Secretary


Striving for Innovation and Technology

Today is Father's Day. May I take this opportunity to wish you all a happy Father's Day and hope you can enjoy your time with your family.

Promoting the development of innovation and technology (I&T) has been a priority for the Government. The National 14th Five-Year Plan makes clear the position and mission of Hong Kong to develop as an international I&T centre. Promoting the upgrading, transformation and diversification of industries through I&T is the road which must be taken for Hong Kong to move towards quality development. This will also help our country to accelerate the realisation of high-level self-reliance and greater strength in science and technology and Chinese-style modernisation. The development of I&T is a core issue for Hong Kong's future development.

Since the establishment of the then Innovation and Technology Bureau (now the Innovation, Technology and Industry Bureau) in 2015, we have invested nearly $200 billion to support the development of I&T. In his Policy Address delivered in October last year, the Chief Executive proposed measures to actively compete for enterprises and talent. The Hong Kong Innovation and Technology Development Blueprint promulgated at the end of last year establishes a clear development direction and roadmap for Hong Kong’s I&T development. I have announced in this year’s Budget that Hong Kong should implement three main directions of taking forward high-quality development. We must actively align with national development strategies, and leverage our strengths and the unique advantages under "one country, two systems" to open up new arenas for our economic development.

The new-term Government has assumed office for nearly a year. We have accelerated our efforts in the area of I&T and made good progress. The overall I&T ecosystem in Hong Kong has become more vibrant, with various achievements in nurturing start-ups, attracting enterprises and talent, and realising the transformation of research and development (R&D) outcomes.

Take the Hong Kong Science Park, one of our flagship I&T bases, as an example. In the past year, a total of 320 companies landed, up 30% compared to last year, of which 20% came from the Mainland or overseas, including one "unicorn" company which focuses on developing next-generation data processing units (DPUs). In addition, over 430 start-ups graduated from the Hong Kong Science and Technology Park’s Incubation programme. In the past year, technology companies in the Science Park raised about $780 million.

The I&T ecosystem of Cyberport, another flagship I&T base, is also growing rapidly. At present, there are over 1,900 enterprises in the Cyberport community of which the start-ups therein have accumulatively raised over $35.7 billion, and own over 480 intellectual property items. Among the six "unicorns", a smart logistics start-up was successfully listed on the Hong Kong Stock Exchange last year; while a travel platform is on the way to listing. Last year, one Cyberport community company became the second virtual assets trading platforms licensed by the Securities and Futures Commission. On the other hand, I have allocated $50 million in the Budget for Cyberport to accelerate the development of the third-generation Internet (Web 3.0), which uses blockchain as the underlying technology. Over the past year, more than 150 relevant enterprises landed in Cyberport, which will certainly bring in more R&D and applications in this respect.

In promoting applied R&D and new industrialisation, the Government's five research and development centres have also been collaborating well with the industry. In the financial year 2021-22, over 210 R&D projects were undertaken, representing an annual increase of over 10%; 135 patent applications were granted, up 16% compared to the previous year. One example is a fabric handling technology developed by the Hong Kong Research Institute of Textiles and Apparel (HKRITA), which won a Gold Medal with Congratulations of the Jury at the International Exhibition of Inventions in April this year. On the other hand, the Hong Kong Productivity Council has assisted more than 150 enterprises to apply intelligent manufacturing technology for production. For example, it has recently assisted a traditional life and health-related enterprise to improve its production and management efficiency by using smart robots and data systems.

All these examples have demonstrated the spirit and ingenuity of the local industry. With the right policies and technical support, Hong Kong is definitely capable of realising Industry 4.0.

We will continue to strengthen our support for I&T and new industrialisation. The $10 billion "Research, Academic and Industry Sectors One-plus Scheme" announced in the Policy Address has recently been approved by the Legislative Council. We will inject funds into the Innovation and Technology Fund in phases to implement the programme, with a view to accelerating the “from 1 to N” transformation and commercialisation of R&D outcomes.

We also need to step up the pace for digital transformation for the service sector, which accounts for a larger share of our economy. The Digital Economy Development Committee, chaired by myself, was established last year and is conducting in-depth studies on cross-boundary data flows, digital infrastructure, digital transformation and talent development. In particular, $500 million has been set aside in this year's Budget for Cyberport to launch the Digital Transformation Support Pilot Programme, a one-to-one matching scheme to assist SMEs in applying ready-to-use basic digital solutions, which will be launched shortly.

To further enrich the local I&T ecosystem, we are sparing no efforts to attract enterprises with frontier R&D capabilities to Hong Kong. The landing of top-notch enterprises in the industry can lead to a clustering effect in the upstream and downstream of the industry chain, and attract top talents to Hong Kong.

The Office for Attracting Strategic Enterprises (OASES) is working to attract high-potential and representative strategic enterprises from around the globe, particularly in strategic industries including life and health technology, artificial intelligence and data science, financial technology, advanced manufacturing, new energy and new materials. In about six months since its establishment, OASES has met with more than 150 enterprises, many of which are leaders in their respective industries, as well as companies engaging in cutting-edge technologies. Some enterprises have submitted their development proposals.

For these enterprises, there are many different factors to consider whether to land in Hong Kong, including government policies and funding support, flexibility in land premium and infrastructure provisions arrangements, the availability of talent in Hong Kong, the ease of cross-boundary data flow, taxation and other issues regarding imports into the Mainland, etc. We will consider the overall benefits that these enterprises can bring to Hong Kong and discuss with them the most suitable conditions and proposals. We have set up a $30 billion Co-Investment Fund and will take into account various factors, including the potential of individual projects of the enterprises to drive the development of local industries, the contribution to the development of the local economy and I&T, as well as the number of job opportunities that can be created, in deciding whether to co-invest in the enterprises concerned. In terms of land, the existing Science Park and Cyberport, as well as the Hong Kong-Shenzhen Innovation and Technology Park in the Loop and the San Tin Technopole, which are being taken forward at an accelerated pace, are also options for enterprises to explore. In recent months, OASES, through the Immigration Department, has handled a number of cases related to talent admission.

Apart from the devotement of public resources, there has also been a growing interest in investing in I&T in recent years. Hong Kong has vibrant securities, private equity and venture capital markets, and is an ideal platform for I&T companies to raise capital. In 2018, we reformed our listing regime to facilitate the listing of pre-revenue/pre-profit biotechnology companies in Hong Kong. In March this year, we also launched a widely-welcomed listing regime for specialist technology companies, which provides an additional channel of financing for specialist technology enterprises in industries such as cloud services, artificial intelligence, semiconductors, electric vehicles, advanced materials and new energy. It is also expected to contribute to the breakthroughs to R&D for core technologies in our country.

With the concerted and focused efforts paid over the years, the foundation of Hong Kong's I&T development has been further strengthened. In the future, we will continue to work in accordance with the four major directions set out in the Hong Kong Innovation and Technology Development Blueprint, with a view to enhancing Hong Kong's I&T ecosystem, enlarging the I&T talent pool, promoting the development of digital economy and a smarter city, so as to join hands with our sister cities in the Greater Bay Area to build a world-class I&T hub and move towards high-quality development together with our country.

June 18, 2023

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