HONG KONG 2004 - Commerce and Industry

To promote the development of innovation and technology, the Innovation and Technology Commission (ITC) under the Communications and Technology Branch is tasked with the mission of spearheading Hong Kong's drive to become a world-class, knowledge-based economy. The commission formulates and implements policies and measures to promote innovation and technology; supports applied research, technology transfer and application; promotes technological entrepreneurship; facilitates the provision of technology infrastructure and development of human resources; and promotes internationally accepted standards and conformity assessment services to underpin technological development and international trade. The commission works closely with its partners in the Government, industry, business, tertiary education institutions and industrial support organisations.

To make Hong Kong a regional centre for innovation and technology, the Government has been implementing various initiatives to drive forward innovation and technology. It offers a range of infrastructure and funding support for applied research and development activities.

The $5 billion Innovation and Technology Fund supports projects that will help upgrade the technology level and promote innovation in the manufacturing and service industries. By year-end, the fund had provided financial support of some $1,690 million to 668 projects undertaken by industrial support bodies, trade and industry associations, higher education institutions, professional bodies and locally incorporated companies.

Major efforts have been made to promote technological entrepreneurship. A $750 million Applied Research Fund was established in March 1998, replacing two previous schemes to provide equity finance for technology ventures in the private sector. In November 1998, private venture capital firms were appointed as managers for the fund. Besides selecting technological ventures for investment, the venture capital firms provide management and networking advice to the investee companies. By year-end, $384 million in financial support had been provided to 23 companies through these fund managers.

SMEs form a dynamic and vital part of Hong Kong's economy. The Innovation and Technology Fund has been actively supporting technology development among SMEs through its Small Entrepreneur Research Assistance Programme (SERAP). SERAP provides dollar-to-dollar matching grants up to $2 million each to help small start-up companies carry out research and development activities to turn innovative technological ideas into commercially viable products, processes or services. By year-end, $207 million in financial support had been provided to 196 companies through SERAP.

A $250 million DesignSmart Initiative was launched in June 2004 to strengthen the support for design and innovation, and to promote the wider use of design and innovation in industries to help them move up the value chain.

The DesignSmart Initiative comprises a Design Support Programme and a one-stop shop for a design cluster. The Design Support Programme operates four funding schemes to support projects in four categories — design research; design/business collaboration; design professional continuing education; as well as promoting and honouring design excellence. By year-end, the Design Support Programme had provided financial support of some $12 million to four projects. The one-stop shop aims to create and sustain a cluster of high value-added design activities among design professionals and interns, and companies, where creative ideas with functionality will be stimulated, nurtured, researched, promoted, commercialised and branded. It will be located in Kowloon Tong and run by the Hong Kong Science and Technology Parks Corporation and the Hong Kong Design Centre.

The publicly funded Hong Kong Applied Science and Technology Research Institute Company Limited (ASTRI) has been in operation since September 2001. It performs high quality research and development for transfer to industry for commercialisation to upgrade the technology level of industry and stimulating the growth of technology-based industry in Hong Kong. ASTRI's current research programmes focus on photonic technologies, integrated circuit design, communications technologies and material technologies.

The Hong Kong Jockey Club Institute of Chinese Medicine Limited (HKJCICM), incorporated in May 2001 as a subsidiary company of ASTRI, takes forward the vision to position Hong Kong as a world centre for the development of health food and pharmaceuticals based on Chinese medicine. Its mission is to spearhead the development of Chinese medicine as a high value-added industry for Hong Kong through promotion and coordination of related activities and strategic support for scientific and evidence-based development programmes. The Hong Kong Jockey Club Charities Trust has pledged to donate $500 million to support the HKJCICM's research and development programmes. The institute has set its programme directions to steer Chinese medicine development towards embracing standardisation, technology and product development, safety appraisal and evidence-based clinical studies.

Pioneered by four leading local design professional bodies and with funding support from the Government and the Hong Kong Jockey Club Charities Trust, the Hong Kong Design Centre (HKDC) was established in September 2002 as a multi-disciplinary organisation dedicated to the promotion of the design industry and its competitiveness in the region as a service industry. Under the DesignSmart Initiative, the HKDC will work with the Hong Kong Science and Technology Parks Corporation to operate a one-stop shop for a variety of activities and facilities, including professional education and training; design-related exhibitions, seminars and workshops; a design-related resource centre; events for networking among design professionals and user industries; and an incubation programme.

In January 2004, the Government established the Steering Committee on Innovation and Technology to coordinate the formulation and implementation of innovation and technology policy and to ensure greater synergy among different elements of the innovation and technology programme. Chaired by the Secretary for Commerce, Industry and Technology, the Steering Committee comprises 12 representatives from relevant government bureaux, academia, industry as well as innovation and technology organisations.

To improve the relevance of applied research and development (R&D) to the needs of the industry and to ensure optimal use of resources, the Government plans to adopt a new strategic framework for innovation and technology development. The new strategy emphasises five elements, i.e. focus, market relevance, industry participation, leverage on the Mainland, and better coordination among different elements of the innovation and technology programme. The key initiatives of the new strategy are:

On June 30, 2004, the Government issued a consultation paper on the new strategy for a two-month public consultation and most of the submissions received were supportive of the direction and initiatives of the new strategy. Taking into account the feedback received, the Government plans to set up R&D centres under four technology areas: automotive parts and accessory systems, logistics and supply chain management enabling technologies, textiles and clothing, and nanotechnology and advanced materials. In addition, ASTRI will subsume R&D under five technology areas: communications technologies, consumer electronics, integrated circuit design, opto-electronics, and Chinese medicine, as part of its development plan. The Government will invite proposals to host the R&D centres in early 2005, with the aim to set up the R&D centres in the second half of 2005.

In line with the new strategy, Hong Kong has continued to strengthen technology cooperation with the Mainland. Pursuant to an agreement signed by the Ministry of Science and Technology and the Commerce, Industry and Technology Bureau, a 'Mainland and Hong Kong Science and Technology Cooperation Committee' was formed and held its first meeting in Beijing in December 2004. The Committee agreed on a work plan to enhance technology cooperation and exchanges between Hong Kong and the Mainland in four technology areas: radio frequency identification (RFID) technologies, automotive parts and accessory systems, integrated circuit design, and Chinese medicine.

In September 2004, the ITC and the Guangdong Provincial Department of Science and Technology launched the 'Guangdong and Hong Kong Technology Cooperation Funding Scheme'. The purpose of the scheme is to encourage collaborations among universities, research institutions and technology enterprises in Hong Kong and Guangdong in carrying out applied R&D projects that will facilitate industry upgrading and economic development in the Greater PRD region. Under the scheme, Hong Kong and Guangdong have provided funding support to 24 and 43 projects respectively in six technology areas of common interest.

The ITC organised the Hong Kong Student Science Project Competition, coordinated nominations from the HKSAR for the State Science and Technology Awards, and took the lead in coordinating Hong Kong's participation in the China Hi-Tech Fair 2004 held in Shenzhen. All these events helped foster an innovation and technology culture in the community.