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Innovation and Technology

To encourage enterprises to conduct more R&D activities, the government offers enhanced tax deduction for qualifying R&D expenditure. The deduction is 300 per cent for the first $2 million of such expenditure and 200 per cent for the remaining balance.

The territory has 16 State Key Laboratories and six Hong Kong branches of the Chinese National Engineering Research Centre, all recognised by the Ministry of Science and Technology. To unleash Hong Kong's strengths in scientific research and foster technology transfer and the realisation of R&D results, the government provides maximum annual funding of $10 million to each of the above facilities, and up to $8 million a year to the Technology Transfer Office of each of the seven designated universities2.

The Innovation and Technology Fund (ITF) supports projects that upgrade technology and promote innovation in manufacturing and services. In 2019, the fund committed more than $2.6 billion to supporting over 3,570 projects undertaken by research institutions and the industry, over 430 of which were R&D projects with total funding exceeding $1.3 billion. Research funding also comes from the University Grants Committee and Research Grants Council, which provided $5.41 billion in 2018-19.

InnoHK Research Clusters

The government is pressing ahead with the establishment of InnoHK research clusters in the Science Park to attract renowned universities, research institutes and technology enterprises to conduct more collaborative research in Hong Kong so as to develop the city as a hub for global research collaboration. The two clusters are Health@InnoHK, focusing on healthcare technologies, and AIR@InnoHK, on artificial intelligence and robotics. Non-profit-making research centres are expected to be set up in the clusters in 2020 and will receive financial support from a sum of $10 billion approved for the purpose. The government will also examine forming a third InnoHK research cluster to further promote global research collaboration.

Start-ups

Hong Kong has one of the fastest-growing start-up ecosystems. The number of start-up companies increased 21 per cent year on year to 3,184 in 2019, according to an Invest Hong Kong survey.

Through a $2 billion Innovation and Technology Venture Fund, the government co-invests with partner venture capital funds in local I&T start-ups at a government to venture capital fund investment ratio of about 1:2, to encourage more private investment in such start-ups. In 2019, the fund invested around $50 million in seven deals.

Six local universities3 obtain government funding through the Technology Start-up Support Scheme for Universities to support their teams in starting technology businesses and

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The City University of Hong Kong, Hong Kong Baptist University, Chinese University of Hong Kong, Education University of Hong Kong, Hong Kong Polytechnic University, Hong Kong University of Science and Technology, and University of Hong Kong

The City University of Hong Kong, Hong Kong Baptist University, Chinese University of Hong Kong, Hong Kong Polytechnic University, Hong Kong University of Science and Technology, and University of Hong Kong

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