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Opening remarks by S for IT at Road to IPO: Seminar for High Growth Corporates (English only) (with photo)
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     Following are the opening remarks by the Secretary for Innovation and Technology, Mr Nicholas W Yang, at Road to IPO: Seminar for High Growth Corporates today (June 2):

Fanny (Chairperson of the Board of Directors of the Hong Kong Science and Technology Parks Corporation (HKSTPC), Mrs Fanny Law), Charles (Chief Executive of the Hong Kong Exchanges and Clearing Limited, Mr Charles Li), distinguished guests, friends, ladies and gentlemen,

     Good morning. I am pleased to join you all at the seminar today to help the Hong Kong's start-ups and entrepreneurs.

     As a former venture capitalist and serial entrepreneur, I know that securing the first round of funding from professional investors is always the most challenging. While you may have the most brilliant idea in the world, the lack of timely venture investment could be a severe or sometime fatal limitation to any promising start-up. In addition, investors' confidence could be affected by external factors such as political and economic changes. In 2016 for example, investors were worried about the uncertain pace of global economic recovery, Brexit, future cohesiveness of European Union and the US presidential election. These worries, coupled with rising interest rate, led to a less favourable investment climate. That said, Hong Kong stock market still performed very well last year, as compared to 2015, with an increase of 4.2 per cent and 17 per cent in the total number of listed companies on the main board and GEM board respectively. And the growth is not just at the IPO level. From 2014 to 2016, the number of start-ups in Hong Kong rose by 83 per cent from about 1 100 to 2 000, and the amount of venture capital investment in Hong Kong increased by 280 per cent, growing from about US$80 million in 2014 to more than US$300 million for the first three quarters in 2016. It would appear that the investors still look to Hong Kong as a place to find good start-up deals, even at times of concern and caution.

     Hong Kong has a number of unique advantages which helped to earn the trust of global investors: a well-established legal system with intellectual property protection, as well as a robust regulatory framework that safeguards the interests of inventors and innovators; world-class infrastructure and international connectivity which facilitate the flows of people, ideas and knowledge, plus our world-renowned universities producing a creative talent pool; a simple, transparent and attractive low tax regime; and last but not least, Hong Kong's combined advantage of "one country, two systems" and the strategic role as the "super-connector" between the Mainland of China and the rest of the world. Through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, there is flexible and scalable connectivity between the Hong Kong and Mainland capital markets. In addition, Hong Kong plays an important role in facilitating the gradual internationalisation of the Mainland's markets.

     However, Hong Kong needs to accelerate the transition from a service-based economy to a knowledge-based economy, in order to play a more significant role in the Belt and Road and "Made in China 2025" strategic initiatives. To this end, I believe promoting Hong Kong's innovation and technology development is the only option and this is high on the agenda of the HKSAR Government.

     Since the establishment of the Innovation and Technology Bureau in November 2015, the Government has introduced a host of initiatives to strengthen Hong Kong's innovation and technology ecosystem. An unprecedented amount of over HK$18 billion has been invested, and another HK$10 billion has been earmarked for the future.

     Today the investors are keen to identify technology start-ups that often encompass new business models, new entry to new markets, using the latest digital technologies such as cloud computing, big data analytics, biotech and Internet of Things. For instance, fire-detecting robots and insect- and disease-detecting drones for farms are all inventions of Hong Kong's aspiring start-ups.

     A study conducted by the Chinese University Center for Entrepreneurship and Google in 2015 pointed out the lack of investment funding was a key factor holding back Hong Kong's start-ups. Against this background, the Government has set aside HK$2 billion to set up an Innovation and Technology Venture Fund, which will be launched later this month. The Government will co-invest with private venture capital funds in local innovation and technology start-ups on a matching basis from pre-Series A to Series B stage. Through such "smart money" investment, we hope to leverage on the experience, expertise and network of seasoned venture capitalists to help our local start-ups to scale up and compete in the global market.

     The Cyberport and Hong Kong Science and Technology Parks Corporation also launched a number of new funding schemes to help our early-stage technology start-ups. The Creative Micro Fund of Cyberport has successfully supported hundreds of local start-ups in the information and communications technology area. The latest HK$200 million Macro Fund will co-invest with professional investors in Cyberport start-ups and entrepreneurs. The HKSTPC has also established the Corporate Venture Fund to co-invest with other angel investors or venture funds in Science Park tenants or incubatees from the seed stage to Series A stage.

     I believe that with more deal flows coming up from our universities, young entrepreneurs and SMEs, we will see an increasingly more vibrant start-up ecosystem, which in turn would attract more international investors to join and invest in our technology start-ups to progress from growth stage to Series B or C stage, and finally to public listing at Hong Kong's world-class stock exchange.

     Hong Kong does need more active participation from the private sector to complement the Government's efforts. I am sure our distinguished speakers and guests would share their insights with us in this direction. And for the budding entrepreneurs among the audience today, I hope you will learn a lot today to grow your start-ups successfully.

     Last but not least, I would like to thank the Hong Kong Exchanges and Clearing Limited and the Hong Kong Science and Technology Parks Corporation, as well as our co-organisers, for organising this meaningful seminar today. I wish the seminar every success.

     Thank you very much.
 
Ends/Friday, June 2, 2017
Issued at HKT 12:27
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Photo

The Secretary for Innovation and Technology, Mr Nicholas W Yang, delivers opening remarks at Road to IPO: Seminar for High Growth Corporates co-organised by the Hong Kong Science and Technology Parks Corporation and the Hong Kong Exchanges and Clearing Limited today (June 2).