In his budget speech last Wednesday, Hong Kong’s Financial Secretary Paul Chan Mo-po earmarked an extra HK$50 billion to boost innovation and promote technology industries, on top of funds set aside last year.
Of the new money, some HK$20 billion will be used on development of the planned Hong Kong-Shenzhen Innovation and Technology Park in the border area of the Lok Ma Chau Loop.
About HK$10 billion will be injected into the Innovation and Technology Fund to support the establishment of research centers for healthcare technologies, artificial intelligence and robotics technologies.
Chan also proposed allocating HK$10 billion to the Hong Kong Science and Technology Parks Corp to help it to boost research infrastructure and support for incubatees.
As for the remaining ten billion, the money will be used to support the establishment of two Technology Research Clusters on healthcare technologies and on artificial intelligence and robotics technologies.
Three out of the four initiatives are HK$10 billion-sized projects. So, is HK$10 billion enough?
Let’s take a look at Finland’s experience.
Finland used to be a leader in information industry, but its flagship company Nokia suffered a huge setback due to mobile phone industry changes. The country then shifted its resources to mobile games.
It now boasts well-known mobile games creators such as Rovio Entertainment (developer of Angry Birds) and Supercell (developer of Clash of Clans).
The Finnish government has set up the Finnish Funding Agency for Technology and Innovation, known as TEKES. Each year, it injects over 500 million euros, or about HK$4.8 billion into TEKES. Of this, 135 million euros (about HK$1.30 billion), goes directly to new startups.
TEKES has so far provided loans and subsidies for over 100 gaming companies and numerous start-ups since 1996. Mobile games have now become one of Finland’s major export services.
Finland’s example shows that HK$10 billion, if used properly, is enough to build up a new industry, or even create a number of world-class enterprises.
Supercell was founded less than eight years ago. In 2016, Chinese internet giant Tencent paid US$8.6 billion for 84.3 percent stake in the Finnish firm. Supercell is now a major tax payer in Finland.
Following Finland’s example, if Hong Kong can inject, say, HK$5 billion into Innovation and Technology Fund each year, and use HK$1.3 billion of the funding to provide interest free loans for startups, it can help lure lots of talents into the sector and attract foreign investments as well.
Over time, the city can create more jobs, and technology would develop into one of the major pillars of the economy.
The full article appeared in the Hong Kong Economic Journal on March 2
Translation by Julie Zhu
[Chinese version 中文版]
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