Hong Kong’s Innovation and Technology Sector Flourishes, Driving High-Quality Development

Hong Kong’s innovation and technology sector is experiencing unprecedented growth, marking a significant step towards high-quality development in the region. Over the past year, more than 150 Web3/blockchain-related companies have chosen Hong Kong’s Cyberport as their base of operations, solidifying its position as a thriving hub for technological advancements.

Recognizing the sector’s importance, the Hong Kong government has allocated a substantial amount of 50 million Hong Kong dollars to expedite the development of Web3.0, leveraging the potential of blockchain technology. This investment signifies the government’s commitment to fostering innovation and propelling Hong Kong towards a future centered around scientific and technological self-reliance.

Hong Kong’s dedication to nurturing the innovation and technology sector has been evident through its substantial investments, totaling nearly $200 billion, to support its growth. Building on this foundation, the Chief Executive’s “Policy Address” last year unveiled proactive measures to attract enterprises and talents, setting the stage for the sector’s advancement.

This initiative was further solidified by the “Blueprint for the Development of Innovation and Technology in Hong Kong,” which laid out a comprehensive roadmap for the sector’s growth. Aligning with the national development strategy and emphasizing high-quality development goals, the recent budget showcased Hong Kong’s commitment to capitalizing on the unique advantages of the “one country, two systems” framework.

Since the new government assumed office, accelerated efforts have been made to strengthen Hong Kong’s innovation and technology ecosystem, resulting in remarkable progress. The Hong Kong Science Park, a flagship for innovation and technology, has experienced a remarkable 30% increase in the number of companies settling within its premises, totaling 320 companies, with 20% originating from mainland China or overseas.

Notably, among the enterprises that have chosen the Science Park is a “unicorn” company specializing in new-generation data processor chips (DPUs). Moreover, over 430 startups have successfully graduated from the Hong Kong Science and Technology Parks Incubation Program, and science and technology enterprises in the park have raised approximately 780 million yuan in funding over the past year.

In a similar vein, Cyberport, another prominent innovation and technology hub, has witnessed rapid growth within its thriving ecosystem. Currently, it houses over 1,900 community enterprises. Notably, six “unicorns” have emerged from Cyberport, including a smart logistics startup that successfully listed on the Hong Kong Stock Exchange last year, and another travel platform that is preparing for listing.

Furthermore, a Cyberport community company became the second virtual asset trading platform in Hong Kong to receive a license from the Securities and Futures Commission. Recognizing the immense potential of Web3.0 and blockchain technology, the government has allocated 50 million yuan in the financial budget to Cyberport, facilitating its accelerated development. As a result, more than 150 related companies have established themselves within Cyberport, fostering further research and innovations in the field.

The government’s efforts to promote applied research and development and new industrialization have also yielded positive outcomes. The five research and development centers under the government achieved a remarkable year-on-year increase of over 10%, undertaking over 210 research and development projects in the 2021-22 fiscal year. Additionally, the number of approved patent applications rose by 16%, reaching 135.

Notable achievements include the fabric delivery technology invention by the Hong Kong Research Institute of Textiles and Clothing, which received the prestigious Gold Medal of Jury’s Commendation at the International Exhibition of Inventions. The Hong Kong Productivity Council has also successfully aided over 150 companies in implementing intelligent manufacturing technology, leading to significant improvements in production efficiency.

Recognizing the importance of collaboration between industry, universities, and research institutions, the government launched the “Industry-University-Research 1+ Plan.” This initiative aims to inject funds into the Innovation and Technology Fund in phases, facilitating the transformation and commercialization of research results.

In line with the focus on digital transformation, Hong Kong’s service industry has made significant strides towards adopting digital solutions. The establishment of the “Digital Economy Development Committee” and the allocation of 500 million yuan in this year’s budget for Cyberport’s “Digital Transformation Support Pilot Program” highlight Hong Kong’s commitment to accelerating the digitalization of small and medium-sized enterprises. The program, which is set to launch soon, will leverage a one-to-one matching funding model to facilitate the adoption of basic digital solutions.

To enhance the local innovation and technology ecosystem, Hong Kong aims to attract leading enterprises with cutting-edge research capabilities. The Office of Introduction of Key Enterprises has been actively engaging with high-potential companies worldwide, particularly in strategic industries such as life and health technology, artificial intelligence and data science, financial technology, advanced manufacturing, new energy, and new materials.

With a co-investment fund of 30 billion yuan, the government is evaluating various factors when considering joint investment opportunities, including the potential of individual projects, contribution to the local economy, innovation and development, and job creation. Settlement options include the existing Science Park and Cyberport, as well as upcoming projects like the Hong Kong-Shenzhen Science and Technology Park and Xintian Science and Technology City. Additionally, the Introduction Office has collaborated with the Immigration Department to facilitate talent entry applications for several key enterprises.

Besides public resources, the market has demonstrated a growing interest in investing in innovative technologies in recent years. Hong Kong’s securities market, private equity, and venture capital funds offer an ideal platform for financing innovation and technology companies. Reforms to the listing system in 2018 paved the way for the listing of biotech companies in Hong Kong, resulting in the successful listing of 57 such companies and raising over 116 billion Hong Kong dollars.

Moreover, the introduction of a listing mechanism for special technology companies in March this year provides additional financing channels for domestic and foreign companies engaged in core technologies. This listing mechanism encompasses cloud services, artificial intelligence, semiconductors, electric vehicles, advanced materials, and new energy, further bolstering the development of these critical sectors.

The relentless efforts invested in the innovation and technology sector in Hong Kong have significantly strengthened its foundation. Looking ahead, the government will continue to prioritize the four directions outlined in the “Hong Kong Innovation and Technology Development Blueprint”: improving the innovation and technology ecosystem, expanding the talent pool, fostering digital economy development, and collaborating with Greater Bay Area cities to establish a world-class innovation and technology center. By doing so, Hong Kong will propel itself on the path of high-quality development, aligning with the country’s vision for scientific and technological progress.

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