2016 Policy Address by Chief Executive (3)

IV. Innovation and Technology

67. Innovation and technological capabilities are key indicators of the level of social and economic development.  Innovation and technology not only create new momentum for economic growth, they also provide us with a more convenient, comfortable and secure way of living.  

68. The newly established Innovation and Technology Bureau (ITB) will make strenuous efforts to co-ordinate, support and complement the development of Hong Kong's innovation and technology industry.  It will, among other things, proactively co-ordinate the work of universities, the Hong Kong Science Park, industrial estates, the Cyberport, the Productivity Council, the Applied Science and Technology Research Institute and four other research and development centres, and set up a robust system for scientific research, development and production.  

69. 2015 is an important year for innovation and technology in Hong Kong.  We saw the establishment of the ITB and the Academy of Sciences of Hong Kong.  The world-renowned Karolinska Institutet of Sweden has decided to open its first overseas research facility at the Hong Kong Science Park.  The Massachusetts Institute of Technology has also announced the establishment of its first overseas Innovation Node in Hong Kong.  In the year ahead, we must maintain our efforts to promote innovation and technology.  

70. Hong Kong enjoys the advantages of both "one country" and "two systems" in developing the innovation and technology industry.  In addition to attracting top research and development institutions from around the world, we can more proactively seek co-operation opportunities with the Mainland at both national and local levels.  

71. In collaboration with the Ministry of Science and Technology, 16 Partner State Key Laboratories have been established at the University of Hong Kong, the Chinese University of Hong Kong, the Hong Kong University of Science and Technology, the City University of Hong Kong, the Hong Kong Polytechnic University and the Hong Kong Baptist University.  This year, the five new Hong Kong branches of the Chinese National Engineering Research Centres (CNERCs), together with 16 Partner State Key Laboratories and one Hong Kong branch of a CNERC already established, will conduct research and development activities in a diverse range of disciplines.  The Government will set aside over $100 million a year to support these projects.  

72. Moreover, in the 2015 State Science and Technology Awards announced recently, five of the winning projects were led or participated by Hong Kong scientific researchers.  

73. Since the launch of the Hong Kong, Macao and Taiwan Science and Technology Co-operation Programme by the Ministry of Science and Technology in 2012, a total of 80 projects have been initiated so far.  Among these, Hong Kong took part in 41 projects.  The projects in turn promoted research and development collaboration between Hong Kong and the Mainland in areas such as biomedicine, electronic information, new energy and new materials.  

74. Currently, there are six Hong Kong universities with offices in the Shenzhen Nanshan High-Tech Zone.  An entrepreneurship group from the Hong Kong University of Science and Technology and the Dongguan Songshan Lake Science and Technology Industrial Park have jointly set up an international robot industrial base.  Hong Kong and Shenzhen have also signed a co-operation agreement for promoting innovation and entrepreneurship among young people.  

Downstream Research

75. Hong Kong's scientific research efforts are concentrated in universities.  A key issue concerning the development of our innovation and technology industry is how the research results of universities can be commercialised.  To further encourage University Grants Committee-funded institutions to carry out more mid-stream applied research projects, the Government will earmark $2 billion to the ITB.  Investment income generated from the allocation will be used to fund research undertaken by the institutions.  

Development of Industries

76. The Science Park provides well-equipped office space for research and development, laboratories and comprehensive technical and corporate development support.  It focuses on three cross-disciplinary platforms, namely "smart city", "robotics" and "healthy ageing".  Housing 580 companies and employing 11 500 people, the Science Park creates a huge clustering effect.  The gross floor area of the park will be increased to 330 000 square metres upon completion of Phase 3 and will be able to meet development needs for the next two to three years.  The Hong Kong Science and Technology Parks Corporation is also planning to further increase the gross floor area of the entire park by around 70 000 square metres.  

77. "Re-industrialisation" is a potential new area of economic growth for Hong Kong.  The Government and the Hong Kong Science and Technology Parks Corporation have revised the industrial estate policy.  Apart from constructing multi-storey buildings in the remaining space of the industrial estates for lease to innovation and technology industries, we will also recover idle factory premises.  This will promote smart production, attract high value-added technology industries as well as high value-added manufacturing processes.  The Hong Kong Productivity Council will also facilitate industrial upgrading and transformation, enabling enterprises to embrace "re-industrialisation" and move towards high value-added production.  On testing and certification, measures will be introduced this year to exempt relevant waiver fees to facilitate the operation of laboratories in industrial buildings.  

78. In view of an anticipated increase in the demand for sites for scientific research and new industrial use, the Government will identify sites near the Liantang/Heung Yuen Wai Boundary Control Point for the development of the Science Park and industrial estates.  

79. In the past 10 years, the Cyberport has endeavoured to groom information and communication technology (ICT) talent and successfully nurtured more than 160 start-ups.  Making reference to the concept of shared working space, the Cyberport has also sought to encourage start-up businesses by providing working space at concessionary rents with flexible tenancy terms.  In addition, the Cyberport Creative Micro Fund provides financial assistance for aspiring entrepreneurs to put their ideas into action and develop prototype products.  

Support for Innovation and Technology Start-ups

80. In recent years, there have been breakthroughs in the support for start-ups.  Apart from the Science Park and Cyberport, which support start-ups in research and development and assist them to open up markets, the number of incubation and co-work locations funded and operated by the business sector has increased from just a few six years ago to over 40 now.  This shows that investors attach greater importance to the development of innovation and technology.  There are currently around 1 600 start-ups occupying these incubation and co-work locations and most are innovation and technology start-ups.  According to an international study last year, the growth of Hong Kong's start-up ecosystem ranked fifth globally.  

81. Through the Science Park and Cyberport, the Government will continue to give full support to start-ups at different stages of development.  The Cyberport will increase the incubation scheme quotas and establish new clusters for areas such as financial technology and e-commerce to meet the latest development of the industry and the market.  It will increase the provision of facilities such as Smart-Space small offices and workstations by 50% within next year and explore ways to better utilise its facilities and spaces, so as to cater for the development needs of the ICT industry.

82. Innovation and technology start-ups require capital input at different stages of development.  In addition to current sources including the Innovation and Technology Fund, the Cyberport Creative Micro Fund, the Corporate Venture Fund set up by the Science Park, as well as the funding schemes of various universities, the Cyberport will allocate $200 million to launch a Cyberport Macro Fund for investment in its ICT start-ups.  

83. To encourage investment from venture capital funds in local innovation and technology start-ups, the Government will set aside $2 billion to set up an Innovation and Technology Venture Fund for co-investing with private venture capital funds on a matching basis.  

Digital Development and Smart City

84. The Internet is of increasing importance to us.  According to the World Competitiveness Yearbook, Hong Kong has ranked first globally in technology infrastructure for five consecutive years.  At present, there are over 17 000 Wi-Fi.HK hotspots offering free Wi-Fi services.  The Government will progressively expand the coverage of free Wi-Fi services by doubling the number of hotspots to 34 000 within three years to provide such services at all public rental housing (PRH) estates and public hospitals, markets, parks, sitting-out areas, promenades, tourist spots, public transport interchanges and land boundary control points.  Hong Kong will then have one of the highest Wi-Fi densities in the world.  The existing speed of Wi-Fi connection at government venues will be progressively doubled and security enhanced.  We will offer free Wi-Fi services at all youth service centres and study rooms run by the Government and non-profit-making organisations, and work with schools to improve the quality of their Wi-Fi services in order to support e-learning.  

85. The ITB will, in collaboration with research institutions and public and private organisations, study the development of a "smart city", which includes providing free Wi-Fi services at bus stops and shopping arcades, opening up more public data to facilitate development of user-friendly mobile applications (apps) for the public, and developing intelligent homes.  The ITB will formulate a digital framework and standards for the development of a "smart city".  

86. The application of big data can be very extensive.  Examples include analysing and forecasting meteorological changes, traffic situation, spread of diseases and business trends.  In response to the global trend of big data analytics, the ITB will formulate policies on big data application.  Last year, the Government launched the Public Sector Information portal (data.gov.hk) to provide more than 5 000 datasets.  The Government will continue to encourage public service bodies and commercial organisations to open up more data.

Innovation and Technology Fund for Better Living

87. Innovation and technology can improve our everyday life in a wide range of aspects, including communication, transportation, healthcare, education, the environment, public order, consumer spending and food safety.  The Government will set aside $500 million to set up an Innovation and Technology Fund for Better Living to finance projects that make use of innovation and technology to improve our daily life.

Other Supporting Initiatives

88. The Government will review the functions and composition of the Advisory Committee on Innovation and Technology to meet the needs arising from the new landscape.

89. The Government will step up efforts to promote STEM (Science, Technology, Engineering and Mathematics) education and encourage students to pursue the study of these subjects.

(To be continued)

Ends/Wednesday, January 13, 2016
Issued at HKT 11:51