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Innovation and Technology

the Productivity Council in September to provide students and researchers from MIT, local universities and enterprises with technology and entrepreneurial education and training. In the same month, the Guangzhou Institute of Biomedicine and Health under the Chinese Academy of Sciences set up a stem cell and regenerative medicine research centre at the Science Park.

Research and Development

The government's goal is to double gross domestic expenditure on R&D as a percentage of Gross Domestic Product to 1.5 per cent, equivalent to about $45 billion a year, by 2022; and to gradually reverse the ratio of public-sector to private-sector expenditure on R&D from being government-led to one of public-private participation.

To encourage enterprises to conduct more research activities, the government will introduce enhanced tax deduction for local R&D expenditure. The first $2 million of qualifying R&D expenditure will be eligible for a 300 per cent tax deduction, with 200 per cent for the remaining balance. Subject to the progress of the necessary legislative amendments, the initiative is expected to be implemented in the third quarter of 2018.

In addition to these new measures, the Innovation and Technology Fund (ITF) supports applied R&D that upgrades technology and promotes innovation in manufacturing and services. As at end-2017, the fund had committed more than $13 billion to supporting about 7,000 projects undertaken by research institutions and the industry, of which over 3,300 were R&D projects with total funding exceeding $9.6 billion. Research funding also comes from the University Grants Committee and Research Grants Council, which provided $5.28 billion in 2016-17.

Start-ups

Hong Kong has one of the fastest-growing start-up ecosystems. The city recorded a 16 per cent increase in the number of start-up companies, from 1,926 in 2016 to 2,229 in 2017, and operated about 6,240 workstations, according to an InvestHK survey.

In September, the government launched a $2 billion Innovation and Technology Venture Fund to encourage private venture capital funds to invest in local I&T start-ups. The government will co-invest with venture capital funds on an investment ratio of about 1:2.

Incubation programmes are also available to provide rental subsidies as well as marketing, financial and technical support to start-ups in their initial years, and to help them open up markets. The HKSTPC offers a Corporate Venture Fund, while Cyberport runs a Creative Micro Fund and the Cyberport Macro Fund, which invests in its start-up community by providing early-stage venture capital funding.

Under the Space Sharing Scheme for Youth, Cyberport will operate a SmartSpace co-working space of around 20,000 square feet in Tsuen Wan, offering entrepreneurial training and support services to help young entrepreneurs carry out innovation activities. The co-working space is expected to house about 140 start-ups.

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