Following is a question by the Hon Kenneth Leung and a written reply by the Secretary for Innovation and Technology, Mr Nicholas W Yang, in the Legislative Council today (March 28):
      
Question:

     The 2018-2019 Budget has mentioned that the application and omnipresence of innovative technology such as artificial intelligence (AI) have not only spurred the birth of new industries, but also revolutionised the traditional business model, generating keen competition along with transformation opportunities for various sectors and industries.  It is learnt that in recent years, the governments of various countries, apart from deploying resources for the research and development (R&D) on AI, have also commenced studies on the impacts of AI on their societies, economies, human resources, etc.  Moreover, the World Economic Forum pointed out in a report it published last year that by 2020, most of the work processes for quite a number of jobs (including clerical work, administration, construction and production as well as writing and legal work) will be undertaken by AI.  In this connection, will the Government inform this Council:
      
(1) whether the authorities conducted, in the past three years, in-depth studies on the impacts of the application and omnipresence of AI on Hong Kong's employment situation, economic and industrial structures, production processes, etc; if so, of the details; if not, the reasons for that;
      
(2) of the policies and measures, apart from earmarking $10 billion in the coming year for supporting initiatives such as the establishment of a research cluster on AI/robotics technologies, that it has put in place to promote Hong Kong's R&D on AI; whether it will step up (i) the support for local start-ups which engage in R&D on AI and (ii) the nurturing of related scientific research talents; if so, of the details; if not, the reasons for that; and
      
(3) whether the authorities have plans to adjust the human resources planning, including adjusting the curriculums of programmes for formal education (including kindergartens, primary and secondary schools and tertiary institutions) and continuing education, in order to prepare for the advent of an AI era; if so, of the details; if not, the reasons for that?

Reply:
      
President,
      
     Having consulted the Education Bureau (EDB) and the Labour and Welfare Bureau, our reply to the various parts of the question is as follows:
      
(1) Artificial intelligence (AI) technology has been developing rapidly in recent years. On enhancing industrial automation and intelligence, the local manufacturing industry has adopted more AI and robotics technologies in recent years to optimise production lines, testing systems, inventory management, etc, and improve operational efficiency. We notice that more and more other industries have also started to apply AI technology to improve existing business processes and business models. Through further automation and improvements in operational efficiency, employees can focus more on innovative and high value-adding work, thereby driving business growth and increasing overall productivity. AI technology can also help product or service providers to identify and respond to customer needs in a faster and more effective manner, thereby improving the quality of the products or services provided and promoting business development.
      
     Besides, technologies such as AI, big data analytics and machine learning can facilitate smart city management in Hong Kong, with a view to achieving the objective of developing a sustainable smart city which is efficient, safe and energy saving.
      
     Universities in Hong Kong perform outstandingly in AI technology and related fields with world-leading research and development (R&D) capabilities. For example, a research team of the Chinese University of Hong Kong developed a novel facial recognition system with the world's highest accuracy of 99.15 per cent in 2014. Another local research team using AI technology to process medical image for lung cancer and breast cancer in order to improve efficiency in clinical diagnosis in 2017 achieved diagnostic accuracies of 91 per cent and 99 per cent respectively. Furthermore, according to Scopus, the world's largest abstract and citation database of peer-reviewed literature, universities in Hong Kong as a whole ranked third globally in terms of producing the most highly cited and impactful research on AI. 
      
     To take advantage of the convenience and huge opportunities brought about by AI development, the Government will devote more resources to enhance Hong Kong's R&D and application capabilities in the AI field, train relevant talents and support technology start-ups to boost the development of AI technology in Hong Kong, thereby benefitting the community as a whole. 
      
(2) On enhancing R&D capabilities, it was announced in the latest Budget that $10 billion would be earmarked to support the establishment of research clusters on healthcare technologies and on artificial intelligence and robotics technologies to attract the world's top scientific research institutions and technology enterprises to Hong Kong for conducting more midstream and downstream R&D projects in collaboration with local universities and scientific research institutions.
      
     The Government will also continue to fund R&D projects on AI through different schemes under the Innovation and Technology Fund (ITF). For example, with the support of the ITF, the Hong Kong Applied Science and Technology Research Institute has collaborated with local banks to develop a smart investment platform which provides investment options through the use of AI, big data analytics and machine learning programme calculations; and developed AI technology on Chinese character recognition which recognises different handwritten Chinese characters for enhancing the efficiency of document processing.
      
     To encourage enterprises to conduct more R&D activities, including those on AI technology, we will implement a measure within this year to provide enhanced tax deduction for local R&D expenditure incurred by enterprises.
      
     On nurturing R&D talents, in the 2016/17 academic year, there were respectively 28 339 and 4 925 students enrolled in the University Grants Committee (UGC)-funded undergraduate and postgraduate programmes that are related to science, technology, engineering and mathematics (STEM). To build up a pool of local research talents and to incentivise more local students to apply for admission to research postgraduate (RPg) programmes, the EDB will inject $3 billion into the Research Endowment Fund. The investment income generated would be used for providing studentships for local students enrolled in UGC-funded RPg programmes.  The amount of studentship will be pegged to the prevailing tuition fee payable by RPg students. The studentships scheme will commence from the 2018/19 academic year.
      
     In addition, through the Internship Programme, the ITF supports the ITF projects and incubatees/innovation and technology (I&T) tenants of the Hong Kong Science and Technology Parks Corporation (HKSTPC) and the Cyberport to hire local university graduates as R&D interns, with a view to nurturing I&T talents. To encourage more local university graduates to enter the field of I&T, we will further extend the Internship Programme in the second half of this year to cover local technology start-ups invested by the Innovation and Technology Venture Fund (ITVF).
      
     Furthermore, we will set aside $500 million under the ITF to launch in the third quarter of this year a five-year Technology Talent Scheme to nurture and bring together more technology talent. The scheme comprises the Postdoctoral Hub programme and the Re-industrialisation and Technology Training Programme. The above measures all contribute to nurturing local research talents, including talents in the AI field.
      
     On supporting technology start-ups, the Government will, through the ITF and organisations like the HKSTPC and Cyberport, continue to provide technology start-ups (including those engaging in AI technology) with various supports including incubation programmes, technical support, working spaces, shared facilities etc. 
      
     In terms of funding, the Enterprise Support Scheme under the ITF subsidises enterprises for R&D work by providing dollar-for-dollar matching fund of up to $10 million for approved projects. There is no requirement for recoupment of Government's contribution and the recipient companies can own the intellectual property rights of the projects. The Technology Start-up Support Scheme for Universities provides an annual funding of up to $4 million for each of the six local universities, so as to support their teams to start technology businesses and commercialise their R&D results. 
      
     In addition, the Government launched the ITVF in September 2017 to co-invest with venture capital funds in I&T start-ups in Hong Kong at a matching ratio of approximately 1 to 2. AI technology is one of the potential investment areas. Our assessment of partner venture capital funds is now underway. We will announce the results in the short term and make co-investment in local I&T start-ups gradually starting from the second half of the year. 
      
(3) To cope with continuous developments on the social, economic, scientific and technological fronts, and to prepare our students for the challenges and opportunities brought by innovations and technological advancements, we need to ensure, through timely review and continual renewal, that the school curriculum can keep abreast of the times. The EDB renewed the relevant curricula for different learning stages in 2017.  For kindergarten level, the renewed curriculum puts further emphasis on fostering children’s imagination and creativity.  For primary and secondary levels, the renewed curricula comprise learning elements in technology education, which enable students to update themselves on innovations and technological developments as well as enhance their abilities in computational thinking for the development needs of the society. The EDB attaches great importance to the continual promotion of a paradigm shift in the mode of teaching through various teacher professional development programmes and school-based professional support services. We encourage the adoption of student-centred teaching designs to equip students with the skills to create, collaborate and solve problems. In recent years, the promotion of STEM education has been our key focus. This includes strengthening teachers' capabilities in curriculum planning and organising school-based STEM education programmes through training programmes and experience sharing sessions on STEM education for primary and secondary school teachers, so as to arouse students' interest and curiosity and promote self-directed learning by providing them with more opportunities to take part in hands-on and minds-on activities.

     At post-secondary level, the Vocational Training Council (VTC) launched the Higher Diploma in Data Science and Analytics in 2017 and will launch a new Higher Diploma in Financial Technology in September 2018.  Both programmes will feature an AI and machine learning module in their curricula. Besides, the VTC will set up a Robotics and AI Laboratory and a Big Data Laboratory to help introduce and apply the technology of AI and machine learning through new learning modules in higher diploma programmes, and facilitate students' participation in cross-disciplinary projects in collaboration with the industries, with an aim to nurture young talents with the relevant vocational and professional skills. The VTC has also been working closely with the industries to identify the learning needs of working adults, and if needed, will timely launch new in-service modules and professional diploma programmes to help them upgrade their knowledge in AI.

     Through the Study Subsidy Scheme for Designated Professions/Sectors (SSSDP), the EDB encourages the self-financing post-secondary education sector to offer programmes in selected disciplines, including computer science and financial technology, to nurture talent in support of specific industries with keen manpower demand. The SSSDP was launched in the 2015/16 academic year on a pilot basis to subsidise about 1 000 students per cohort to pursue designated full-time locally accredited self-financing undergraduate programmes in selected disciplines. It will be regularised in the 2018/19 academic year with the number of subsidised places increased to about 3 000 per cohort.  Current students of the designated programmes will also receive the subsidy from the 2018/19 academic year. In the 2018/19 academic year, there will be five computer science programmes and four financial technology programmes under the SSSDP, which will provide 306 and 265 subsidised first-year intake places respectively.
      
     As for promoting continuing education, the Government has earlier announced a series of enhancement measures of the Continuing Education Fund (CEF), including the expansion of the scope of the CEF courses to all courses registered in the Qualifications Register (QR) (except programmes funded by the UGC and provided by the Employees Retraining Board).  Currently, the QR covers 14 areas of study and training which include Computer Science and Information Technology. With the increased number of courses registered in the QR in future, we expect that more training programmes with different scope will become eligible for registration as the CEF courses. Besides, the 2018-19 Budget announced the increase of the subsidy ceiling of the CEF from the current level of $10,000 to $20,000 per applicant to further encourage members of the public to pursue continuing education and upgrade their skills.

Ends/Wednesday, March 28, 2018
Issued at HKT 15:31

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