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Hong Kong’s Ambitious Leap: The City’s Strategic Roadmap to Becoming a Global Innovation and Tech Hub

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Determined to be a global hub for innovation, Hong Kong is pushing to become a leading technology powerhouse. The government is stepping up its focus on Information and Technology (I&T) development and boosting support for burgeoning sectors like biotechnology, artificial intelligence, and electric vehicles. This piece was penned by Morning Studio editors on May 21, 2024.

In a promise made in August 2023, Hong Kong's Chief Executive John Lee Ka-chiu committed to transforming the city into an international science and technology hub by 2035. Lee also suggested strategies to promote a smoother cross-border exchange of innovative ideas through the promising Hong Kong-Shenzhen Innovation and Technology Park. This will solidify Hong Kong's position as a connector between mainland China and the rest of the world.

This merely represents one of the tactics Hong Kong is employing to achieve its goal of becoming a top hub for innovation and technology (I&T). In December 2022, the city's governing body introduced the Hong Kong Innovation and Technology Development Blueprint. This document details the plans and tactics that will be put into action to transition Hong Kong into a globally significant I&T hub.

The plan indicates that Hong Kong is firmly on track to evolve into a leading technology center. The city is actively encouraging research and development (R&D), while simultaneously boosting venture capital funding, all in the effort to establish a favorable atmosphere for the growth of start-ups.

Dynamic I&T environment

Total domestic spending on R&D at

HK$30.13 billion

In the year 2022, it amounts to $3.86 billion

Housing approximately

4,200 new businesses

by the year 2023, encompassing over

Ten mythical creatures known

The level of funding in venture capital funds at

41.7 billion Hong Kong dollars

during 202

In October 2023, Lee presented his yearly policy statement, acting as the strategic plan for the Hong Kong government. He declared a wide range of plans to maintain the city's competitiveness and drive its economic expansion.

The government of Hong Kong intends to:

Establish the Office for the Development of New Industrialisation to foster new industrial growth, back key businesses, help the manufacturing industry with improvements and change through Innovation & Technology, and offer assistance to emerging businesses.

Inaugurate the Microelectronics Research and Development Institute in Hong Kong in 2024, aiming to spearhead and foster partnerships between universities, R&D hubs, and the microelectronics sector. This will involve utilizing the sophisticated manufacturing supply chains and the market of the Greater Bay Area (GBA).

Speed up the creation of a supercomputing hub to boost the progression of artificial intelligence (AI). Cyberport plans to establish an AI supercomputing hub to cater to the needs for computational power from research and development and associated fields, as well as to encourage industry growth.

The government is set to boost the transformation of research and development results from start-ups. It plans to increase the highest amount of funding given to each technology transfer department in certain universities to HK$16 million. This will allow these departments to enhance their technology transfer initiatives and broaden their marketing services.

Image Credit: SCMP/Yik Yeung-man

A HK$10 billion New Industrialization Acceleration Scheme has been established to boost the growth of new industrial sectors. This fund will offer financial support to businesses specializing in life and health technologies, artificial intelligence and data science, advanced manufacturing, and novel energy technologies.

Encourage the transfer of data across borders. In June 2023, Hong Kong entered into an agreement with mainland China with the intention of promoting the safe transfer of data within the GBA across borders.

Image Credit: SCMP/K.Y. Cheng

Set up a third InnoHK hub. The current two InnoHK research hubs, concentrating on healthcare technologies and artificial intelligence, have effectively united world-class research and development staff from worldwide. The forthcoming third hub will be dedicated to advanced manufacturing, materials, energy, and sustainable growth.

Hong Kong is renowned for its rapid emergence as a center for innovation. This is evidenced by the city's high placement in various global innovation and technology rankings.

A city that holds a strong reputation in the technology sector

Rankings of Innovation and Technology in Hong Kong

Rankings of Innovation and Technology in Hong Kong

Rankings of Innovation and Technology in Hong Kong

In 2022, Hong Kong's performance in the "Technology" domain secured the second spot globally, as per the World Digital Competitiveness Ranking, an annual report released by the International Institute for Management Development.

In the "Digital Intelligence Index" report, jointly released in 2020 by Mastercard and the U.S.'s Tufts University Fletcher School, Hong Kong secured the third position globally.

The metropolis also holds the second position globally and the top spot in Asia for emerging ecosystems, according to "The Global Startup Ecosystem Report 2023". This report was released by Startup Genome, a policy advisory and research organization headquartered in the United States.

Unsurprisingly, numerous corporations of all sizes have chosen to establish their headquarters in Hong Kong. The reasons behind these moves are as varied as the sectors they come from, as found out during conversations with city-based business owners by the Post.

Regarding biotechnology, Hong Kong is recognized as one of the global leaders in raising funds for this sector. As of April 2024, 64 healthcare and biotech companies, which are yet to generate revenue or profit, have been listed to raise a staggering total of HK$120.5 billion.

In a significant development in June 2023, Insilico Medicine, a biotech company based in Hong Kong, announced its intention to go public in the city. This was a deviation from its previous plan of listing in New York. The firm's CEO, Alex Zhavoronkov, pointed out that Hong Kong's easy global accessibility and its close proximity to mainland China were the key factors influencing this decision.

Alex Zhavoronkov, the CEO of Insilico Medicine, explained that their decision to relocate the Asia-Pacific headquarters to Hong Kong was influenced by their belief in the potential growth of the biotech industry in China. He described Hong Kong as a cosmopolitan city where Eastern and Western cultures intersect, making it an ideal travel hub for trips to Europe, the US, and Japan.

Moreover, Zhavoronkov pointed out that Hong Kong is a significant financial hub, ranking second only to Nasdaq as a primary location for biotech initial public offerings (IPOs). The city also boasts a wealth of talent, hosting five universities that rank in the top 70 worldwide, according to the Quacquarelli Symonds University Rankings for 2024.

Insilico Medicine, a biotech firm, has relocated its Asia-Pacific main office to Hong Kong in order to tap into the rapidly expanding Chinese biotech sector.

Regarding smart manufacturing and AI

Unspun, a custom jeans manufacturer with bases in San Francisco and Hong Kong, operates on a demand-based supply chain. They create flawlessly fitting garments for every individual by utilising their own unique software. The Unspun application captures the contours of a consumer's body to construct an extremely precise 3D digital representation, which is subsequently used as a blueprint for creating a pair of jeans tailored specifically for that individual. This method enables the company to prevent the needless waste often associated with bulk manufacturing.

Walden Lam, CEO and co-founder of Unspun, highlights some critical factors to consider when launching a business. These include the accessible talent pool, the investor and funding landscape, and the prospect of suitable partners and customers.

Walden Lam

Co-founder and Chief Executive Officer of Unspun

Hong Kong was perceived as a central point for procurement offices of clothing firms and producers; a significant number of the manufacturing businesses are headquartered in Hong Kong. There are also several sourcing firms located here. Thus, for our line of work, Hong Kong serves as a prime location.

His piece of advice for fellow entrepreneurs is: "There's a lot to gain from capitalizing on the swift pace and effectiveness that Hong Kong offers. There's an abundance of local vigor from skilled individuals and investors – the entire ecosystem – which can aid in propelling your business forward."

Unspun, a company that specializes in making custom jeans, operates out of two locations: San Francisco and Hong Kong. They leverage Hong Kong's reputation as a vibrant supply center for the clothing sector.

In the realm of electric vehicles…

Hong Kong EV Power is a company that offers charging solutions for electric vehicles (EVs). Their goal is to increase the use of EVs by providing charging cables and stations, thus creating a more welcoming environment for these vehicles. They started their operations in mainland China and have since expanded to offer charging facilities in over 63 cities, with approximately 72,000 charging points.

The founder and CEO of Hong Kong EV Power, Laurence Chan, indicates that his firm is swiftly gaining traction in Hong Kong by establishing 46 charging locations with a total of 1,000 chargers. Additionally, the company is broadening its reach to Southeast Asia and the Middle East. However, what prompted him to establish the company's main base in Hong Kong?

"Despite our extensive experience and significant revenue from mainland China, a showcase in Hong Kong is crucial for our global expansion," Chan points out. "China operates on its own unique systems, and the charging interface in mainland China is specifically tailored for Chinese-standard electric vehicles. However, in Hong Kong, our charging interface has to cater to electric vehicles from Europe, the US, and Japan. The city's international nature provides us with the chance to branch out to other nations."

Laurence Chan, the founder and CEO of Hong Kong EV Power, has noted that the Hong Kong government is amping up its support and incentives for purchasing electric vehicles (EVs). These steps are being taken due to both economic and environmental reasons, and it is anticipated that this will lead to a significant growth in the market. In fact, last year, half of all new car purchases were EVs – a fact that cannot be overlooked.

While Hong Kong EV Power already holds a strong position in mainland China, the company chose to establish its headquarters in Hong Kong as a strategic move towards global expansion.

According to photos provided by SCMP/Yik Yeung-man, Jelly Tse, and Winson Wong, the Hong Kong Innovation and Technology Development Blueprint is aiming to maximize the city's innovation and technology potential. It has identified four primary paths for development. These include boosting new industrialization in Hong Kong; expanding the talent pool in innovation and technology to facilitate growth; fostering the growth of the digital economy and transforming Hong Kong into a smart city; and actively aligning with China's overall development while reinforcing Hong Kong's role as a connector between the mainland and the rest of the world.

For further insights on why Hong Kong is a thriving hub for prosperous businesses, follow this link.

Narrative developed by Morning Studio. Artistic guidance provided by Venice Ng and Wing Chan.

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