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2017 Policy Address by Chief Executive (4)
IV.  Innovation and Technology

54. Innovation and technology are no slogan.  They create new impetus for economic and social development.  Hong Kong's application of innovation and technology notably trails the Mainland of China in various aspects.  Since the establishment of the Innovation and Technology Bureau (ITB), the atmosphere for innovation and technology development in Hong Kong has been significantly enhanced over the past year, with more top-tier global research and development institutes establishing their presence here.  The Massachusetts Institute of Technology set up its first overseas Innovation Node in Hong Kong.  The Karolinska Institutet from Sweden, for the first time in its 200-year history, established an overseas research centre in our Science Park.  The Guangzhou Institutes of Biomedicine and Health under the Chinese Academy of Sciences also announced it would set up a Guangzhou Hong Kong Stem Cell and Regenerative Medicine Research Centre in our Science Park.  The Alibaba Group launched a $1 billion Hong Kong Entrepreneurs Fund.  Sequoia Capital initiated the Hong Kong X-Tech Startup Platform to provide funding support for early-stage and angel projects.  Two weeks ago, the HKSAR Government and the Shenzhen Municipal Government signed a memorandum of understanding on the development of a Hong Kong/Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop in Hong Kong, with a site area quadruple that of the Science Park.

55. The Government has also made a substantial investment of $18 billion to enhance Hong Kong's innovation and technology ecosystem. These measures include promoting re-industrialisation, funding universities to conduct mid-stream and applied research projects, subsidising industry adoption of technology to upgrade and transform, and supporting start-ups.

56. Supply of hardware, such as land and premises, is a necessary but not sufficient condition for Hong Kong to promote innovation and technology successfully.  Facing competitors, Hong Kong must consider how to enhance its overall competitiveness, including offering tax and financial concessions, and other policy support measures to attract innovation and technology enterprises from Hong Kong, the Mainland and overseas.

Promoting the Development of Applied Scientific Research

57. The Government will request universities to conduct more impactful and translational research projects that meet Hong Kong's needs, so as to tie in with the work promoting the development of industries and re-industrialisation.  In this regard, the Government will request the University Grants Committee (UGC) to complete the review on the allocation of research grants within one year, and expand the assessment criteria to include research impact and effectiveness of knowledge and technology transfer.

58. The Government will also request, through the UGC, all universities to refine their knowledge and technology transfer plans within six months and strengthen the role of their knowledge transfer offices in co-ordinating and commercialising research outputs. Universities should implement their refinement programmes as soon as possible.  The UGC and the ITB will keep the universities' implementation under review as one of the criteria for fund allocation.

59. The $2 billion Midstream Research Programme is now open for applications.  The programme encourages universities to conduct more applied research to facilitate downstream research or product development.

Helping Start-ups

60. Start-ups in Hong Kong are developing quickly.  There were nearly 2 000 start-ups in Hong Kong last year, a growth of 25% compared with 2015.  Among these start-ups, 35% of the entrepreneurs were from outside Hong Kong.  The number of incubators and co-work locations run by the commercial sector has increased to over 40.

61. In last year's Policy Address, I announced the establishment of a $2 billion Innovation and Technology Venture Fund to invite eligible venture capital funds as partners to co-invest with the Government in Hong Kong's technology start-ups.  The fund will commence operation by the middle of this year.  Moreover, through the Technology Start-up Support Scheme for Universities, the Government has subsidised six local universities to set up over 120 technology start-ups, turning their research and development deliverables into businesses.

62. The Science Park and the Cyberport have each established funds to invest in technology start-ups and increased the quotas for their incubation programmes.

63. To further foster the development of the innovation and technology ecosystem, the Government supports the construction by the Hong Kong Science and Technology Parks Corporation (HKSTPC) of an InnoCell adjacent to the Science Park.  InnoCell will provide residential units with flexible design and ancillary facilities, such as shared working spaces, for leasing to staff of the incubatees and start-ups in the Science Park.  It will also be open to scientific research personnel from outside Hong Kong who work for other companies in the park.  The HKSTPC is conducting a detailed study with a view to completing the construction of InnoCell in three years.

Promoting the Development of Industries and Re-industrialisation

64. The Science Park expansion is underway for completion in three years.  This will further increase the park's gross floor area to some 400 000 square metres.

65. To promote re-industrialisation, the Government is preparing to build a Data Technology Hub and an Advanced Manufacturing Centre in the Tseung Kwan O Industrial Estate, to be completed in three and five years respectively.  Furthermore, the Government introduced a Technology Voucher Programme two months ago to subsidise the use of technology by SMEs to improve productivity or facilitate upgrading and transformation.

66. Industries enjoying advantages in the process of Hong Kong's re-industrialisation include biotechnology, big data, the Internet of Things, artificial intelligence and smart city.  ITB, Invest Hong Kong and the ETOs will actively encourage relevant enterprises to establish their presence in Hong Kong.

67. The Government will establish an Inno Space with the Hong Kong Productivity Council to facilitate the sharing of practical technologies and skills to promote the translation of innovative and technological ideas into industrial designs or products, and support a start-up culture and re-industrialisation.

68. The Government has set aside sizable sites, including one of over 50 hectares near the Liantang/Heung Yuen Wai Boundary Control Point, for use by the innovation and technology sector (including the development of a science park and industrial estates) and other emerging or traditional industries.  We will also recommend the Science Park make best use of the developable sites in Tai Po, Yuen Long and Tseung Kwan O industrial estates.

Smart City

69. The Government is committed to developing Hong Kong into a smart city by using innovation and technology to enhance city management and improve people's livelihood. Our consultant will complete its study by the middle of this year.  So far, preliminary studies have been carried out on some important areas such as the environment, healthcare and transport.

70. The Government is striving to promote the establishment of a Common Spatial Data Infrastructure (CSDI) to provide government departments as well as public and private organisations with an information infrastructure to share spatial data, supporting various smart city applications, and support the smart city blueprint of the ITB.  The Development Bureau is commissioning a strategic study on the development of CSDI.

71. The Government is using Kowloon East as a smart city pilot area, leveraging people-centric information and communications technology solutions for the sharing of data to improve the use of resources and enhance the management of pedestrian and vehicular traffic flows.

72. The Government will continue to implement incentive measures to encourage the private owners of eligible industrial buildings to convert them into data centres.  We will further streamline the procedures for issuing waivers for such purpose.

73. Since the launch of the Wi-Fi Connected City Programme in the middle of last year, the number of free Wi-Fi hotspots has increased by 1 400 to 18 400.  It is estimated that by 2019, the number of such hotspots will increase to 34 000.

74. The Government has earmarked $500 million for the ITB to assist government departments in using technology to enhance the quality of public services.

75. The Government will launch a $500 million Innovation and Technology Fund for Better Living by the middle of this year to subsidise innovation and technology projects which will bring more convenient, more comfortable and safer living to the public, or those addressing the needs of specific community groups.

(To be continued)
Ends/Wednesday, January 18, 2017
Issued at HKT 11:41
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