LCQ2: Measures to support digital transformation of small and medium enterprises
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Question:
There are views that Hong Kong is undergoing an economic transformation where sectors such as wholesale, retail, and catering are particularly impacted, prompting a pressing need for reform, innovation, upgrading and transformation. In 2023, the Government allocated HK$500 million to launch the Digital Transformation Support Pilot Programme (DTSPP) to provide small and medium enterprises (SMEs) in sectors such as retail and food and beverage (F&B) with subsidies on a one-to-one matching basis for digital transformation. However, application for the programme ended in May 2025. Besides, the Technology Voucher Programme (TVP) launched under the Innovation and Technology Fund also ceased to accept new applications after December 31, 2024. In this connection, will the Government inform this Council:
(1) of the respective numbers of local enterprises that have received subsidies to date (with a breakdown by industry in table form), as well as the respective average amounts of subsidy received per enterprise, under DTSPP and TVP;
(2) how to assess the effectiveness of DTSPP and TVP (particularly for the wholesale, retail and F&B sectors);
(3) of the following information about the enhanced DTSPP, which is intended to be implemented within 2026:
(i) the specific implementation timetable for the programme, and whether the Government will regularise the programme; if so, the details; if not, the reasons for that;
(ii) whether the subsidy arrangement of the programme will be enhanced, including by raising the maximum subsidy amount per enterprise and by shifting from subsidy on a one-to-one matching basis to full subsidy; if so, the details; if not, the reasons for that; and
(iii) whether it will allocate at least $1 billion to the programme to step up assistance in the upgrading and transformation of sectors such as wholesale, retail and F&B, including by developing e-commerce platforms for market exploration and by offering greater support to relevant industries in the application of artificial intelligence and the pursuit of technological innovation; if so, the details; if not, the reasons for that; and
(4) of any further measures or programmes to support technological innovation among SMEs in sectors such as wholesale, retail and F&B, thereby facilitating their upgrading and transformation?
Reply:
President,
Regarding the question raised by the Hon Shiu Ka-fai, after consulting the Commerce and Economic Development Bureau, our reply is as follows:
(1) The Digital Transformation Support Pilot Programme (the Pilot Programme), funded by the Digital Policy Office under the Innovation, Technology and Industry Bureau and administered by Cyberport, aims to provide funding support, on a one-to-one matching basis (with a subsidy ceiling of $50,000), to assist small and medium-sized enterprises (SMEs) in food and beverage, retail, tourism, and personal services sectors in adopting off-the-shelf and basic digital solutions in three categories (digital payment and shopfront sales, online promotion and customer management systems), with a view to accelerating their digital transformation. Since its launch in early 2024, the $500 million Pilot Programme has received enthusiastic responses. To date, funding has been approved for 8 799 local SMEs across the retail sector (55 per cent), food and beverage sector (34 per cent), personal services sector (11 per cent) and tourism sector (0.8 per cent). The average amount of approved subsidies is approximately $49,000.
On the other hand, the Innovation and Technology Commission (ITC) launched the Technology Voucher Programme (TVP) in November 2016 to support non-listed local enterprises/organisations in adopting technology services and solutions to enhance productivity, or upgrade or transform business processes, thereby strengthening their long-term competitiveness. The TVP provides funding of up to 75 per cent of the total approved project cost per application (with a cumulative funding cap of $600,000 per enterprise/organisation). It has approved a total of 38 440 applications, with an average funding amount of approximately $175,800 per approved application, benefiting 35 805 enterprises/organisations. Approved projects primarily involved sectors such as wholesale and retail (36 per cent), restaurants and hotels (8 per cent), engineering (7 per cent), personal care services (6 per cent), and import/export trade (5 per cent), etc.
(2) Since the introduction of the Pilot Programme, Cyberport has collected, analysed and monitored the progress and effectiveness of SMEs with subsidies approved in their application of digital solutions through various channels (including reports on applied use submitted by SMEs and questionnaire). In general, SMEs receiving the subsidies have reported that the Pilot Programme has helped reduce operating costs, enhance efficiency, and increase the number of customers, in line with the intended objectives of the Pilot Programme. Given the positive feedback from SMEs, the Chief Executive's 2025 Policy Address announced that the Government will allocate additional resources to enhance the Pilot Programme, with the aim of further encouraging SMEs to adopt off-the-shelf basic digital solutions to boost their competitiveness and strengthen information security.
To evaluate the effectiveness of the TVP for funded enterprises/organisations, the ITC requires enterprises/organisations to submit an evaluation report six months after project completion, assessing whether the project has achieved productivity gains or business process upgrades and transformation. For completed projects, the vast majority of applicants consider that the projects have helped enhance the competitiveness of their enterprises/organisations. Specific outcomes include savings in manpower, time and/or costs; increased turnover; and upgrades/transformations/simplifications of business processes. In 2024, the ITC conducted a fundamental review on the TVP. Considering that the programme has achieved its original intent, coupled with the Government's continued strengthening of support for various industries in recent years, and that many policy bureaux and departments have introduced more targeted funding schemes dedicated to the specific conditions or operational needs of individual industries, it was therefore decided that TVP would cease accepting new applications after December 31, 2024.
(3) The Government is currently examining the ways to enhance the Pilot Programme. In addition to incorporating digital solutions on artificial intelligence and cybersecurity in the programme, considerations will also be given to factors such as the latest transformation needs of SMEs, market product offering and pricing, public finance conditions and operational experience, in devising the funding mode, scope and amount as well as the implementation details of the new round of the programme. We expect that an additional allocation of $300 million is needed. Our target is to roll out the enhanced Pilot Programme in the second half of this year following consultation with the Legislative Council.
(4) The Government has been assisting Hong Kong enterprises, especially SMEs, in different industries including retail, catering, etc, in upgrading, restructuring and enhancing competitiveness through various funding schemes. Among others, the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) provides funding support for non-listed Hong Kong enterprises to develop business in 40 economies with which Hong Kong has signed Free Trade Agreements and/or Investment Promotion and Protection Agreements. Besides, the Trade and Industrial Organisation Support Fund (TSF) provides funding support to organisations such as trade and industrial organisations and professional bodies to implement projects which aim at enhancing competitiveness, including assisting enterprises in upgrading and restructuring. As at end-January 2026, around 12 800 applications have been approved under the BUD Fund, involving a total funding amount of around $7.9 billion, in which around 50 per cent of the funding support involves projects related to upgrading and restructuring. For the TSF, a total of 515 applications have been approved, involving a total funding amount of around $900 million.
Ends/Wednesday, February 25, 2026
Issued at HKT 14:30
Issued at HKT 14:30
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