21 July 2018
Many Silicon Valley companies are benefiting from joint projects with universities. Photo: Bloomberg
Many Silicon Valley companies are benefiting from joint projects with universities. Photo: Bloomberg

How Hong Kong can achieve its Silicon Valley dream

Many cities aspire to become the next Silicon Valley but some are making more progress than others.

To catch up with the global innovation race, this year’s policy address put HK$5 billion into the innovation and technology fund. However, the extra funding is yet to be approved by the Legco finance committee.

The big question is how effectively has the fund been driving the city’s innovation?

The fund was set up in 1999 with HK$5 billion to foster innovation and technology advancement.

It mainly covers four programs — innovation and technology support, general support, small entrepreneur research assistance and university-industry collaboration.

What is worth highlighting is that the fund for university-industry collaboration is underused.

As of the end of 2014, only 262 (6 percent) of 4,304 projects approved by the fund were university-industry collaboration.

The importance of university-industry collaboration cannot be overestimated.

Stanford University, for example, takes pride in its deep roots in Silicon Valley where it is widely seen as a leading source of innovation and invention.

Many the world’s best-known tech companies such as Google, Cisco and Yahoo have benefited from Stanford’s expertise, resources and network.

“Industries and universities are getting closer than ever. Nowadays, companies are very sophisticated about what they want from universities,” Katharine Ku, director of technology licensing of Stanford University, told EJ Insight.

“As many of them have cut their R&D budgets and some don’t even have their own innovation pipeline, they have to look outside and identify innovation — universities are a good place for them.”

Hong Kong’s low level of university-industry collaboration indeed makes the city look less innovative than its Asian counterparts.

According to the Global Innovation Index 2014, Hong Kong ranks 10th among 143 economies surveyed but no better than 20th in terms of university-industry research collaboration, lagging behind Singapore, Malaysia and Japan.

Patrick Yue, an associate provost for knowledge transfer in the Hong Kong University of Science and Technology, said the absence of an indigenous technology industry is the leading reason for Hong Kong’s low ranking.

Nevertheless, there is an upward trajectory of R&D and innovation activities in Hong Kong’s technology sector.

However, the sector is dominated by overseas players such as IBM (United States), Samsung (South Korea), Siemens (Germany) and Huawei (mainland China), among others.

A total of 4,499 Hong Kong companies have taken part in R&D involving US$852 million in funding in 2012, up 7.3 percent from 2011, according to the Census and Statistics Department.

What is important is whether Hong Kong universities are willing to work with companies from here and abroad.

Ideally, university-industry partnership creates a win-win situation.

While industry benefits from the expertise of faculty members, the collaborative project brings in royalty revenue.

For example, last year Stanford’s Office of Technology Licensing licensed 106 new inventions and generated US$108.6 million in royalties.

Despite the perceived benefits, there are challenges.

The first is the difference in culture between academia and business.

Stanford’s Ku said many companies, especially in Asia and Europe, want to own intellectual property, control publications or keep research results confidential.

“We say no to all of that, but it takes a long time for them to adjust. Companies are used to controlling things.”

In some collaborative research projects, Stanford is willing to compromise with industry.

For instance, Stanford allows its industry partners to preview publications and check if the company wants to protect some findings for patenting.

Potential patent earnings may also benefit the university, if properly negotiated.

The second challenge is whether universities should change their research and benefit industry.

“Our worry is that if they do that, they will lose their cutting-edge science,” Ku said.

“As they say, electricity was discovered but those who invented it didn’t know what to do with it in the first place. Nobel prize-winning research doesn’t come to practical use maybe for 50 years. If you’re going to measure its impact over 20 years, that time is not long enough.”

John Bacon-Shone, associate director of the Knowledge Exchange Office of the University of Hong Kong, said universities could do more than university-industry research collaboration to foster innovation.

“Knowledge transfer should not be limited to application of technology in business. Access to academic knowledge and data can foster innovation in business, government, NGOs and the broader community.”

Nowadays, most academic information is behind a paywall, even though it was mainly funded with public money, he said.

He urged the Hong Kong government to make academic knowledge and data publicly accessible.

Hong Kong is not Silicon Valley but the Silicon Valley experience shows that the innovation ecosystem can flourish even without government intervention.

A powerful collaboration between industry and universities may carry more weight in making Hong Kong the next Silicon Valley than simply putting more money in a government funding scheme.

– Contact us at [email protected]


an independent contributor and consultant

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