Innovation and Technology to Hong Kong

Trends and opportunities

The Market

Hong Kong is fast-becoming known as a global innovation and technology hub. In 2018, the Global Innovation Index ranked the Hong Kong’s innovation and technology sector as second in the world, as part of the Hong Kong-Shenzhen technology cluster (Source: Global Innovation Index Report 2018, Global Innovation Index 2018). The Hong Kong Government has ramped up efforts to develop the startup ecosystem, attract and retain overseas talent, and offer world-class R&D facilities and infrastructure to support the sector. For the recent 2018-2019 Budget, the Hong Kong Government committed HKD$50 billion to promote Innovation and Technology and identified four areas of strength for development: biotechnology, artificial intelligence, smart cities and fintech. There are also numerous government bodies such as InvestHK, StartmeupHK, and the HKTDC able to support local and international companies in Innovation and Technology.

Startups / SMEs

Part of Hong Kong’s strengths in Innovation and Technology lie in its burgeoning startup ecosystem. The Government’s start-up initiative, StartmeupHK, found that as of August 2016 there were nearly 2,000 startups, with 5,618 workstations and 5,229 staff. In 2017, the number of startups increased by 16% and the number of staff employed in startups rose by 21%. (Source: Startup Ecosystem Survey, StartmeupHK 2016). There are also a number of Government initiatives that have been introduced to support young companies, such as:

• the Technology Start-up Support Scheme for Universities, which provides six local universities annual funding of up to HKD$24 million to encourage tech start-ups,
• the HKD$2 billion Innovation and Technology Venture Fund to encourage private venture capital investment in tech startups,
• the Technology Talent Admission Scheme, which was rolled out in May 2018 is a three-year pilot that provides a fast-track arrangement for the admission of overseas and Mainland China research and development talent, and
• StartmeupHK, a Government initiative that supports overseas startups in Hong Kong.

Technology Infrastructure and R&D

Hong Kong boasts world-class technology infrastructure and R&D facilities. It is home to the Hong Kong Science and Technology Park and Cyberport, which together host over 1,000 technology companies of all business stages and run incubator and accelerator programs. Furthermore, with upcoming mega projects such as the Greater Bay Area development and the Hong Kong-Shenzhen Innovation and Technology Park, Hong Kong is well placed to be the gateway for companies looking to reap the benefits of the international Hong Kong market, as well as take advantage of its close relationship with Mainland China. For startups, Hong Kong also has a booming co-working space industry, providing flexible, cheaper and smart workplaces for young companies.

Hong Kong is also well-known for its leading technology education and research. In 2006, the Government established five R&D centres, focused on bringing innovations to commercialisation in areas of automotive parts and accessory systems, ICT, textiles and apparel, logisitics and supply chain management enabling technologies, and nano and advanced materials. Hong Kong’s education in technology is also unrivaled – according to the QS World University Ranking by Subject, in 2018, five Hong Kong universities place in the top 100 for engineering and technology (Source: World University Rankings by Subject: 2018: Engineering and Technology, QS 2018).

Opportunities

Innovation and Technology initiatives in Hong Kong

There are numerous schemes and programs for different tech sectors in Hong Kong. As part of the 2018-2019 Budget, the Hong Kong Government announced it would inject HK$50 billion into innovation and technology. The HK$50 billion would be allocated as follows:

• HK$20 billion to support the Hong Kong-Shenzhen Innovation and Technology Park development.
• HK$10 billion into the Innovation and Technology Fund
• HK$10 billion to support the development of two research clusters in healthcare technology and AI and robotics
• HK$10 billion to support the Hong Kong Science and Technology Parks Corporation

Key sectors which the HK Government is attracting startups from with additional funding support include (but are not limited to) are:

• Smart Cities – The Smart City Blueprint is a strategic plan to build Hong Kong into a leading smart city that embraces innovation and technology with a strong economy and high quality of living. The Hong Kong Government has also established the Energising Kowloon East Office, which is focused on developing the Kowloon East area into a smart city CBD in Hong Kong. A number of smart city initiatives have been piloted already. Furthermore, the Development Bureau of the Government set up a HK$1 billion Construction Innovation and Technology Fund to encourage the construction sector to adopt new technologies and foster an innovative working culture.
• Healthy Aging – The Government has also pledged to set up a HK$1 billion Gerontechnology Fund to develop assistive technology to improve the quality of living for the elderly, improve the quality of aged care services and support healthcare professionals with their work.
• AI & Robotics – The Government earmarked HK$10 billion to develop a technology research cluster for AI and robotics as part of the 2018-2019 Budget. The Innovation and Technology Venture Fund was also launched by the Government to encourage venture capitalists to invest in Innovation and Technology, including AI as a potential investment area. The Hong Kong Science and Technology Parks also run a number of accelerator programs that have supported robotics startups, and is also home to the Robotics Catalysing Centre, which hosts robotics solution providers.

Co-working spaces

Co-working spaces are relatively new to Hong Kong, but the trend has soared with 560,000 square feet of providers already in operation.The Hong Kong co-working space market has grown by 50 per cent in the last three years and demand has been growing the fastest in the Asia Pacific region than anywhere else in the world (Source: Jones Lang LaSalle, ‘Hong Kong’s flexible work space offering grows 50% in three years’, 10 October 2018).

This area of real estate will only continue to grow as startups, SMEs and also large multinational companies recognise the benefits of co-working spaces, such as being connected to networks, sense of community, opportunity to collaborate, and smart, flexible office spaces that boost productivity.

A directory of co-working spaces in Hong Kong can be found here.

Competitive Environment

The Innovation and Technology environment in Hong Kong comprises of several key global competitors. Some of note are:

• Israel – There is strong government support for Israeli technology companies in Hong Kong. A Memorandum of Understanding was signed by the Israel and Hong Kong governments in 2014 to strengthen industrial R&D collaborations and technology development (Source: Innovation and Technology Commission, ‘Israel and Hong Kong Strengthen Industrial Research & Development Collaboration wih MOU’, February 2014). A delegation of cyber security companies from Israel recently visited Hong Kong.
• United States of America – In 2018, a US delegation including companies such as AECOM, Cisco and Microsoft visited HK and organised a smart city forum (Source: U.S. Consulate General Hong Kong and Macau, ‘Consulate General Strengthens Commercial Ties with Hong Kong’, 25 May 2018). Hong Kong Productivity Council is supporting US to promote its smart industries, advanced manufacturing and smart city technologies through organising events and programs (Source: U.S. Consulate General Hong Kong and Macau, ‘Consulate General Co-Hosts Showcase for U.S. Smart Manufacturing Companies with HKPC’, 4 June 2018) .The Hong Kong Government has specifically targeted the United States to invest in the region as a innovation and technology hub. In 2013, the HKTDC chose to run its “think ASIA, think HONG KONG” campaign in New York and Los Angeles to encourage US businesses to invest in the Hong Kong market.
• There are many innovation companies being set up in Hong Kong. You may find a long list of case studies on Invest HK website . 

Links and industry contacts

InvestHK
HKTDC
Hong Kong Science and Technology Park
Cyberport
Innovation and Technology Commission
Innovation and Technology Fund
Guandong-Macao-Hong Kong Greater Bay Area Plan

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

• develop international markets
• win productive foreign direct investment
• promote international education
• strengthen Australia's tourism industry
• seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.