Chief Executive CY Leung
Innovation has always driven us – our societies, our economies, our aspirations. The difference today, of course, is technology. The marriage of innovation and technology, its extraordinary growth and continuing spread into every aspect of our economic, business and social lives, is the dominant force in today’s global economy.
Indeed, a new Hong Kong economy has emerged – that has a large external component, and comprises a wide range of sectors with a much bigger geography. In the country and in the world, we are no longer playing the role that started 30 years ago.
We own much more than light manufacturing on the Mainland, and we no longer limit ourselves to the Pearl River Delta region. We now cover the entire Mainland of China, from the southern to northern provinces, and from the coast to the western regions. Hong Kong factories can now be found in other countries as well. We own enterprises ranging from mining, quarrying, fishery, agriculture and dairy farming; petrochemical plants, railways and heavy machinery; financial and professional services, telecommunications and retail sales.
A Hong Kong jewellery company has 1,000 stores in Mainland China – a good indication of the size of the market and more importantly the replication capability of Hong Kong businesses on the Mainland. And we no longer compete on costs. We compete on value, and this is where innovation and technology come in.
Rising innovation tide
Innovation and technology has taken centre stage in national development under the 13th Five-Year Plan. And China encourages “mass entrepreneurship and innovation” in consumption, manufacturing processes, industries, investment, funding and many other aspects. Indeed, the strategic policies “Internet Plus” and “Made in China 2025” are underpinned by innovation.
There is no doubt that the Mainland of China has achieved spectacular success in promoting mass entrepreneurship. Last year, the number of newly registered companies reached 11,600 a day, which means that, on average, eight new enterprises were born every minute.
Zhongguancun, a high-tech home to dozens of universities and enterprises, has emerged as China’s Silicon Valley. The National Mass Entrepreneurship and Innovation Week was held there last October. The event will become an annual one, with exhibitions to be held in major cities throughout the country. In short, the Mainland’s innovation tide is rising.
Ingredients for success
Hong Kong is perfectly positioned to ride on the tide of “re-industrialisation” – to develop high value-added innovation and technology industries. We are blessed with first-class technological infrastructure: our Internet connection speed is among the fastest in the world; our household broadband penetration rate, at 83%, is among Asia’s highest; and our mobile subscription rate, at an impressive 227%, is among the highest in the world.
We have other essential ingredients for success: a sound legal system, a robust intellectual property regime, innovative research personnel and, of course, sufficient financial resources. After all, we are the world’s China financial centre, as well as China’s global financial centre.
Perhaps even more important, Hong Kong holds the combined advantages of “one country, two systems”. As part of China, we enjoy the privileges that “one country” confers, including ready access to the vast markets of the Mainland. At the same time, Hong Kong is blessed with the benefits that come with a separate economic and social system – benefits that are available to no other city in China.
This unique duality has made Hong Kong what I call a super-connector. We bring the rest of China and the rest of the world together in so many ways – trade, finance, logistics, education and arts and culture. And we can do the same in innovation and technology. Indeed, we are well on our way.
Our innovation and technology ties with the Mainland are deep and long-standing. With the support of the Central Government, in particular the Ministry of Science and Technology, 16 Partner State Key Laboratories were already established in Hong Kong. They serve as a base for high-level research and development, as well as scholarly exchanges.
Hong Kong is also home to six Hong Kong Branches of Chinese National Engineering Research Centres. They provide engineering research and consultancy support to industry. My Government will continue to support these research and development activities.
Innovation and technology is among the top priorities of my Government. Last November, we set up a dedicated Innovation and Technology Bureau. It is led by Secretary Nick Yang, who is with us today. The bureau spearheads our drive in innovation and technology development.
Shortly after November, the Academy of Sciences of Hong Kong was established. It will serve to expand Hong Kong’s co-operative network with scientists, entrepreneurs and institutions from all over the world. I owe my gratitude to Lap-chee, to Professor Tsui, for leading the Academy, and I have no doubt many fruitful collaborations will come along.
Our efforts in promoting innovation and technology are beginning to bear fruits. The Hong Kong Science Park held its Career Expo earlier this month, offering about 1,000 openings. It was packed with hundreds and thousands of job seekers – many of them are bright young talents.
Meanwhile, local start-ups have embraced the incubation programme of the Hong Kong Cyberport – the number of applications received last year exceeded the quota by several times. Cyberport will double the quota and establish new clusters for areas such as financial technology and e-commerce. Also hugely popular are Cyberport’s Smart-Space – small offices and workstations designed for start-ups. Smart-Space facilities will be increased by 50% to meet rising demand.
Burgeoning start-up hub
Space aside, funding is a crucial element in nurturing start-ups.
In my Policy Address this year, I announced a number of new initiatives to support innovation and technology. These include a US$250 million Mid-stream Research Programme to promote translational research in our universities, as well as a US$250 million Innovation & Technology Venture Fund. The latter will invest in local technology start-ups together with venture capital funds on a matching basis. We have also earmarked US$60 million for an Innovation & Technology Fund for Better Living. It was designed to support projects that make our daily lives more pleasant, more efficient and safer – something we can all appreciate.
We will continue to work closely with all stakeholders, from academia and research to our industrial sectors and the rising start-up ecosystem.
I invite you to join us, in Hong Kong, where we are creating a thriving and rewarding home for innovation and technology.
Chief Executive CY Leung gave these remarks at the “Innovation & the New Economy of Hong Kong” discussion session at the Boao Forum for Asia Annual Conference 2016.