In his 2016 policy address, Chief Executive Leung Chun-ying devoted 2,789 words to discuss innovation and technology, and the word “innovation” even appeared in the headline of his speech.
But in this year’s speech, the section devoted to technology had only 2,249 words, 20 percent less if you like. The innovation word was also dropped from the headline.
Leung has largely repeated what he said in the previous policy address about promoting innovation and technology in Hong Kong, except for two fresh initiatives.
These include building apartments near the Science Park to attract technical talents, and reserving HK$500 million for the Innovation and Technology Bureau to assist various government departments in adopting technology for service enhancement.
In the policy Address last year, Leung pledged to splurge HK$10 billion to boost the tech sector, with the initiatives including a HK$2 billion Innovation & Technology Venture Fund and HK$500 million Innovation and Technology Fund for Better Living.
He also granted HK$200 million to the Cyberport Macro Fund, and reserved HK$2 billion for the Innovation and Technology Bureau to support more research projects.
In contrast, there have been no big-bang proposals in 2017.
Still, the tech sector is offering applause.
Well, what’s the reason?
“The biggest government support for innovation and technology is just to take hands off. That may work far more better than overdoing,” an industry insider says. “Perhaps our chief executive finally got it.”
Observers point out that various government-sponsored funds launched last year are still in the middle of inviting applications, and that it takes some time for implementation.
In the mean time, there are already too many tech funds, either public or private. Too many of such funds could distort the market operation. Worse, it may misguide new start-ups into positioning themselves just to obtain government support, rather than focus their efforts on making products geared to market demand or beefing up their competitive edge.
In fact, experiences from US and China markets show that all successful internet companies are not a result of direct government support.
The US is known for its free market. As for China, the success of internet giants like Tencent or Alibaba is more or less due to the lack of excessive government regulation.
Rather than providing too much targeted support, the Hong Kong government is doing the tech sector and startups a big help as it just concentrates on fostering a healthy economic environment and maintaining business-friendly policies, such as a low tax regime and an open market.
This article appeared in the Hong Kong Economic Journal on Jan. 19
Translation by Julie Zhu
[Chinese version 中文版]
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