As this year’s global political and economic situations are complex and volatile, we must be vigilant and make concrete efforts to help Hong Kong’s new industries thrive.

As in the past, the Chief Executive’s last policy address spared no effort to actively make plans for Hong Kong, putting forward more than 180 new policy measures, which also demonstrates this Government’s efforts in various aspects of governance in the past four years. These include elderly care, poverty alleviation, land acquisition for housing, and medical care. Nevertheless, in view of this year’s complex and volatile global political and economic situations, we must be vigilant and make concrete efforts to help our new industries thrive.

Bias towards “hard power”

This year’s policy address has focused extensively on innovation and technology. Unfortunately, it has placed too much emphasis on “hard power” while neglecting ‘soft power’. Example are: (1) increased investment in hardware for the innovation and technology industries by firming up the large-scale plan for developing the Lok Ma Chau Loop into Hong Kong-Shenzhen Innovation and Technology Park, (2) building an InnoCell next to the Science Park, providing accommodation and ancillary offices for rental to eligible tenants at the Science Park, and (3) identifying a site near the Liantang and Heung Yuen Wai Border Control Point for development. All these measures are most welcome.

In contrast, the “soft power” for supporting the innovation and technology industries is inadequate. First, our existing laws have failed to keep pace with the innovation and technology industries’ ever-evolving new business models, thus limiting their development, but the HKSAR Government is still not giving them enough attention. For example, recently several international innovation/technology companies with a large customer base, including Uber (online car hailing services) and Airbnb (bed-and-breakfast rental services), encountered obstacles blocking the development of their sharing-economy business models in Hong Kong because of local regulations.

No prospects in sight for reviewing Copyright Ordinance

Intellectual property rights are an indispensable “soft power” as they are very important for protecting innovation and technology achievements. Last year, the amendments to the Copyright Ordinance had to be put aside because of filibustering at the Legislative Council. So far, the HKSAR Government has not mentioned a timeframe for proposing the Amendment Bill again, which unfortunately is giving the public the message that there are no prospects in sight for the amendments. A sound legal system and globally tuned professional services are Hong Kong’s existing “software” strengths. However, in order to keep pace with international trends to develop the innovation and technology industries, Hong Kong must resolve the contradictions between new industries and old business models in order to remove such weaknesses existing in “soft power”.

It is also disappointing that the Policy Address has not rolled out any targeted measures to promote investment in innovation and strengthen government policy support in Hong Kong. After the establishment of the Innovation and Technology Bureau, the environment for innovation and technology has indeed improved. It has attracted authoritative organizations such as Sweden’s Karolinska Institute and Massachusetts Institute of Technology’s innovation centre to set up branches in Hong Kong. However, these have not changed the lack of investment in innovation and technology in Hong Kong. At present, research funding together with private investments represent only 0.7% of Hong Kong’s GDP, while government investment represents only 0.4%. This percentage is far lower than Israel’s 4.4%, Korea’s 4.1%, and neighbouring Singapore and Taiwan’s 2%. It is also far lower than the 3% invested by developed countries and regions in general.

Showing determination in formulating a policy blueprint

The HKSAR Government should emulate others and show determination in developing an overall policy blueprint to develop scientific research and increase private investments, including encouraging enterprises to invest in more research resources. At the same time, it can give tax incentives to the technology development industries so that they can get tax deductions for expenses on R&D, personnel training and procurement of high-tech equipment. The HKSAR Government may also consider setting up a tax exemption period and reducing the profit tax rate for start-ups engaged in research. This will encourage the innovation and technology industries to focus on development in areas where Hong Kong has the strengths and potential, such as robotics, medical technology and smart cities, and successfully commercialise their scientific research results or develop them into a Hong Kong brand.

In view of Hong Kong’s neglect in nurturing science and technology R&D talents over the years, which has hindered the development of the innovation and technology industries, the HKSAR Government must learn from the bitter experience and strive to improve the education policies and promote the pursuit of innovation and scientific research in the society.

At present, Hong Kong’s eight institutions of higher education train only a few hundred engineering and technology graduate students each year. Together with science graduate students, the total number is only one thousand or so. Moreover, after graduation, these students do not necessarily engage in scientific research. According to 2014 statistics, Hong Kong had a total of only 26,000 researchers, which as a percentage of local population were lower than the OECD countries.

Arousing young people’s passion for innovation and technology

If the HKSAR Government wants to encourage more young people to engage in scientific research and innovation, it must help them cultivate a strong interest from an early age, including classifying STEM (science, technology, engineering and mathematics) coding education as compulsory courses and strengthen their curriculum in all primary and secondary schools. I recommend learning from the experience in the US by inviting the National Aeronautics and Space Administration (NASA) to work with our schools on a regular basis so that our students are able to acquire a wide range of astronomical knowledge and understand the structure and relevant scientific principles of rockets, which will not only make them feel that making rockets and going into space are not out of reach, but more importantly also deepen their dreams and interest in science. In fact, since 2009, the Chamber has been exclusively sponsoring the Young Astronaut Training Camp annually for our secondary school students to receive astronaut training and learn aerospace science and technology at the space facilities in Beijing and Jiuquan. For secondary school students, the HKSAR Government can collaborate with leading technology companies to provide STEM education resources to help these students acquire research industry-related knowledge in order to arouse their passion to pursue a career in innovation and technology industries.