Hong Kong's
resolve to become
a global innovation hub
As the city strives to become a top tech centre, the
government doubles down on I&T development and
increases support for emerging industries such as
biotechnology,
artificial
intelligence
intelligence
and electric vehicles.
By Morning Studio editors
May 21, 2024
In August 2023, Hong Kong Chief Executive John Lee Ka-chiu pledged to work towards making a cross-boundary science and technology hub a reality by 2035. Lee also proposed initiatives to facilitate a better cross-boundary flow of innovative ideas via the emerging Hong Kong-Shenzhen Innovation and Technology Park, to cement Hong Kong’s role as a bridge between mainland China and the rest of the world.
This is just one of the ways that Hong Kong is moving towards realising its mission to become a leading centre for innovation and technology (I&T). In December 2022, the city’s government unveiled the Hong Kong Innovation and Technology Development Blueprint, which outlines the directions and strategies to be implemented in order to transform Hong Kong into one of the world’s most important I&T centres.
According to the blueprint, Hong Kong is already well on its path towards becoming a prime tech hub. The city is aggressively promoting research and development (R&D) while also increasing venture capital fund investments, all to help create a conducive environment in which start-ups can flourish.
Vibrant I&T ecosystem
In October 2023, Lee delivered his annual policy address, which serves as the Hong Kong government’s policy blueprint. He announced a vast array of initiatives to sustain the city’s competitiveness and economic growth.
The Hong Kong government plans to:
Set up the New Industrialisation Development Office to promote new industrialisation, support strategic enterprises, assist the manufacturing sector with upgrades and transformation using I&T, and provide support for start-ups.
Establish the Hong Kong Microelectronics Research and Development Institute in 2024 to lead and facilitate collaboration among universities, R&D centres and the microelectronics industry, which will include leveraging the well-developed manufacturing supply chains and market of the Greater Bay Area (GBA).
Expedite the establishment of a supercomputing centre to foster artificial intelligence (AI) development. Cyberport will set up an AI supercomputing centre to support the demand for computing power from R&D and relevant sectors, and also promote industry development.
Support transformation of R&D outcomes from start-ups. The government will double the maximum funding provided for each technology transfer office of specified universities to HK$16 million, enabling them to strengthen their support of technology transfer efforts and expand marketing services.
Photo: SCMP/Yik Yeung-man
Set up a HK$10 billion New Industrialisation Acceleration Scheme to promote the downstream development of new industrialisation. It will provide financial assistance for enterprises in the fields of life and health technologies, AI and data science, advanced manufacturing and new energy technologies.
Promote cross-boundary data flow. In June 2023, Hong Kong signed a memorandum of understanding with mainland China aimed at fostering the secure cross-boundary flow of data within the GBA.
Photo: SCMP/K.Y. Cheng
Establish a third InnoHK cluster. The two existing InnoHK research clusters, which focus on healthcare technologies and AI, have successfully brought together top-notch R&D personnel from across the globe. The third cluster will focus on advanced manufacturing, materials, energy and sustainable development.
Hong Kong has a well-established reputation as an up-and-coming innovation hub. The recognition that the city has received in several international I&T rankings is a case in point.
A city already well regarded in the tech space
Hong Kong’s I&T rankings
Hong Kong’s I&T rankings
Hong Kong’s I&T rankings
Hong Kong’s performance in the “Technology” category ranked second worldwide in 2022, according to the World Digital Competitiveness Ranking produced annually by the International Institute for Management Development.
Hong Kong ranked third worldwide in the “Digital Intelligence Index” report, jointly published in 2020
by Mastercard and the Fletcher School of Tufts University in the United States.
The city is also ranked second in the world and first in Asia among emerging ecosystems in “The Global Startup Ecosystem Report 2023”, published by US-based policy advisory and research organisation Startup Genome.
It is no surprise, then, that many companies both big and small have decided to set up their bases in Hong Kong. Their motivations are as diverse as the industries they represent, as the Post discovered when talking to business owners in the city.
Onbiotechnology ...
In June 2023, it was reported that Hong Kong-based biotech company Insilico Medicine has set its sights on an initial public offering in the city, in a switch from its earlier plan to raise funds with a New York listing. Hong Kong’s ease of access to the rest of the world and proximity to mainland China were cited as the main motivators, according to Alex Zhavoronkov, the company’s CEO.
Alex Zhavoronkov
CEO of Insilico Medicine
One of the reasons why we moved the Asia-Pacific headquarters to Hong Kong is because we wanted to make a bet on the growth in the biotechnology industry in China. Hong Kong is a well-developed city where the East meets the West. It is the best way to travel, or my best place to travel to Europe, to the US, to Japan.
“In addition, Hong Kong is a financial centre. It is the second-largest IPO hub for biotech after Nasdaq,” Zhavoronkov explains. “The city is also home to many talented people, with five universities ranked in the top 70 globally, according to Quacquarelli Symonds University Rankings for 2024.”
Biotechnology company Insilico Medicine moved its Asia-Pacific headquarters to Hong Kong to capitalise on China’s fast-growing biotech industry.
Onsmart manufacturing and AI …
Unspun is a custom jeans maker based in San Francisco and Hong Kong that uses an on-demand supply chain. The company produces “perfect fit” clothes for each customer using proprietary software. The Unspun app scans the shape of a customer’s body to generate a highly accurate 3D digital avatar, which is then used as the model for making a pair of jeans fitted especially for them. This process allows the company to avoid the unnecessary wastage that is often seen with mass production.
“When thinking about starting up a business, there are a few important aspects or criteria: availability of talent, the ecosystem of investors and fundraising opportunities, and potential partners and customers,” says Walden Lam, co-founder and CEO of Unspun.
Walden Lam
Co-founder and CEO of Unspun
We saw Hong Kong as a hub for sourcing offices for apparel companies and manufacturers; a lot of the manufacturing companies have their headquarters in Hong Kong. There were a couple of sourcing companies as well. So, at least for what we do, Hong Kong is a good hub for that.
His advice to other entrepreneurs: “A lot can be said about leveraging the fast tempo and efficiency that comes with being in Hong Kong. There’s just a lot of on-the-ground energy from talents and investors – the overall ecosystem – to help accelerate your business.”
Custom jeans maker Unspun has bases in San Francisco and Hong Kong, relying on the latter city’s status as a dynamic sourcing hub for the apparel industry.
Onelectric vehicles …
Hong Kong EV Power provides electric vehicle (EV) charging solutions. The company aims to boost EV adoption by supplying chargers and cables to encourage a more friendly environment for this type of vehicle. Its initial operations were in mainland China, growing to provide charging stations in more than 63 cities and about 72,000 charging points.
Laurence Chan, the founder and CEO of Hong Kong EV Power, says his company is quickly making inroads in Hong Kong with the installation of 46 charging stations comprising 1,000 chargers, and it is also expanding to Southeast Asia and the Middle East. But why did he set up its headquarters in Hong Kong?
“Although we have a lot of experience in mainland China, and a majority of our revenue comes from there, if we want to expand to the rest of the world, a Hong Kong showcase is important,” Chan explains. “China has its own set of systems, and the charging interface in mainland China is designed for China-standard EVs. But in Hong Kong, our charging interface has to serve EVs from Europe, the US and Japan. The city is more international, and this gives us the opportunity to expand to other countries.”
Laurence Chan
Founder and CEO of
Hong Kong EV Power
The Hong Kong government is increasing its support and subsidies for EV purchase for environmental and economic reasons, so the market is only going to expand further. In 2020, 50 per cent of new car purchases were for EVs. We cannot ignore that.
Hong Kong EV Power already has a significant presence in mainland China, but decided to set up its headquarters in Hong Kong to serve as a jumping-off point for global expansion.
Photos: SCMP/Yik Yeung-man, Jelly Tse, Winson Wong
To further unleash the city’s I&T potential, the Hong Kong Innovation and Technology Development Blueprint has laid out four key development directions. These include promoting new industrialisation in Hong Kong; enlarging the I&T talent pool to create a strong impetus for growth; promoting development of the digital economy and developing Hong Kong into a smart city; and proactively integrating into China’s overall development while strengthening Hong Kong’s role as a bridge connecting the mainland with the world.
To learn more about what makes Hong Kong a dynamic centre for successful businesses, click here.
Story created by Morning Studio
Art direction by Venice Ng and Wing Chan
