49% of AI enterprises expressing difficulties in recruiting technical talent HKPC provides nine major recommendations for establishing Hong Kong as a well-recognised “International AI and Data Industry Development Hub”HONG KONG SAR - Media OutReach - 10 November 2023 - Hong Kong Productivity Council (HKPC) released the key findings on their "Hong Kong AI Industry Development Study" today, focusing on the status of Hong Kong's artificial intelligence (AI) industry development, domestic and overseas competition and local corporate utility. HKPC also provided nine major recommendations for establishing Hong Kong as a well-recognised "International AI and Data Industry Development Hub". As one of the highlights of "2023 Policy Address", the HKSAR Government has stated "AI and data science" as one of the three focuses of new industrialisation development. Upon receiving LegCo funding a few years ago, Hong Kong now hosts 14 cross-industry AI research laboratories and three universities ranking in the world's top 30 universities with AI-related subjects and research, the HKSAR Government will also establish a "Digital Policy Office" to accelerate the construction of a high-performance computing (HPC) data centre, which is slated to complete in 2024-2025 and is already gradually applying AI technology into its public services. In order to build Hong Kong into an "AI and Data Industry Development Hub", how should enterprises and governments respond? In light of this, HKPC collaborated with the Hong Kong Institute of Economics and Business Strategy (HIEBS), HKU Business School at The University of Hong Kong to conduct a "Hong Kong AI Industry Development Study" in mid-2023 to explore the various needs, opportunities and challenges the industry is currently facing. A total of 216 AI-related enterprises participated in the survey, and the key findings of the research are as follows: Overview of the development of Hong Kong's AI industry: 49% of participants expressed encountering difficulties in recruiting technical talent Among the AI enterprises interviewed, 25% are large companies, and 75% are small and medium enterprises (SMEs). Of these, 17% said they are developing at all three levels (basic layer, technology layer and application layer), and 22% said they intend to extend their development to other layers in the future. 55% of the companies are looking to expand their businesses into both international and local markets. In comparison, 14% and 11% of companies will choose to focus their businesses in Hong Kong and the Mainland, respectively. Financial overview:
- 51% of large companies stated that they are currently profitable, with 31% of overall enterprises claiming to be profitable.
- Funding sources: 43% of companies report receiving funding from the HKSAR Government, while 19% received funding from venture capital/angel investors.
- Cumulative investment amount: 49% of companies invested less than HK$1 million, while 21% invested between HK$1 million and HK$5 million, 6% of companies invested between HK$5 million and HK$10 million, 5% of companies invested between HK$10 million and HK$100 million, and 4% of companies invest over HK$100 million.
- 48% of companies are solely developing AI for one industry, while 16% of companies target two industries and 15% of companies target three industries at the same time.
- Targeted industries: 29% telecommunications and information technology services, 24% medical/clinical and health equipment, health products, pharmaceuticals, 23% education, nurturing/training, 22% manufacturing, and 21% Government organisations.
- Main sources of income: 63% from Hong Kong, 19% from the Mainland, and 15% from overseas.
- Insufficient processing power: 44% of enterprises express having difficulties securing enough processing power, and 71% cover the shortfalls through cloud computing services, of which 31% choose HPC data centres in the Mainland while 26% choose HPC data centres overseas.
- Insufficient data: 44% of companies are having difficulties collecting data, and 16% say it takes a long time to collect sufficient data. Meanwhile, 8% reported that they have no relevant data.
- Recruitment difficulties: 49% of companies are having difficulties recruiting, and some even reduced their hires of technical talent in Hong Kong. 77% of companies reasoned that it is due to Hong Kong's high operating costs, and 41% expressed that Hong Kong lacks relevant technical talent. Nevertheless, 45% of companies still plan to increase the hiring of Hong Kong technical talent.
- Construct an Asia-leading HPC centre: The Government invests in establishing a "public" HPC Centre and introduces preferential policies to attract local and foreign enterprises to build "private" HPC centres in Hong Kong and attract enterprises to carry out AI R&D in Hong Kong along with other public supercomputing resources (e.g. Universities).
- Establish an "International Big Data Hub": Develop data policies through the newly formulated "Digital Policy Office" and establish regulations to create a "privacy policies-free" environment. Further promote Government departments and Government-operated or funded institutions to provide "privacy policies-free" big data and APIs, and negotiate and implement data circulation with Mainland and overseas cities. This will facilitate the circulation of big data involving personal privacies (e.g. medical data), while at the same time safeguarding individual citizens.
- Formulate regulatory policies and guidelines for the development and application of AI technology: The Government must strike a balance between promoting the development of the AI industry and safeguarding public interests, while enhancing the confidence of the industry and the public in the application of AI. We may refer to experiences and practices of other regions to stay in line with Mainland and overseas industry development.
- Strengthen cooperation with the Greater Bay Area and other countries to improve the AI and data industry, while Hong Kong focuses on developing its advantages: AI chip design, algorithms, AI frameworks, AI application software, etc.
- Take the lead in promoting large-scale AI applications: In line with the development vision of smart city and smart government, the HKSAR Government should develop and launch large-scale AI applications by example to lead the development of the AI industry and attract AI companies to develop in Hong Kong.
- Empower industries in Hong Kong by upgrading and transforming with AI: Encourage industry chambers to cooperate with the AI industry, share successful AI use cases, explore new application scenarios, utilise Government funding to provide AI training to employees, apply AI to help traditional industries upgrade and transform, accelerate the development of emerging industries, and create business opportunities for the AI industry.
- Develop an "International Financing Centre for AI Companies": The Government should cooperate with relevant public and private institutions to promote and publicise the newly launched "Specialist Technology Company Listing Rules" (Chapter 18C) by the Hong Kong Stock Exchange, which allows pre-revenue, pre-profit specialised technology companies to list in Hong Kong, along with the new changes to HKEX's GEM board's listing rules. These reformed listing rules will attract more AI companies to list in Hong Kong and more venture capital funds to come to Hong Kong.
- Popularise AI education and accelerate the fostering of interdisciplinary "AI+ talent": Universities and community colleges may incorporate AI education into their compulsory courses and in more disciplines, and secondary schools may also integrate AI education in multiple stages.
- Promote Hong Kong as "The Most Internationally Livable City for AI Talent": The HKSAR Government may promote the city's AI industry development plan and the convenience of being in an international city. Additionally, formulate preferential policies to encourage AI companies to relocate non-local AI tech employees to Hong Kong and attract AI talent from across the globe to develop in Hong Kong.
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About HKPC New Industrialisation
New Industrialisation is one of the eight major development focuses of the Hong Kong Productivity Council (HKPC). To support the goal of achieving new industrialisation as stated in the "Hong Kong Innovation and Technology Development Blueprint" promulgated by the HKSAR Government and promote high-quality and sustainable development of Hong Kong economy, HKPC New Industrialisation provides comprehensive technical support and training to move enterprises and industrial chains toward higher-end, smarter and greener transformation, achieving new industrialisation. The New Industrialisation Development Centre, established in mid-2023, provides an exchange platform for all sectors to learn about and master the latest technological solutions, with all-round services including testing and certification, certified new industrialisation courses and Government funding consultation, and more. This will drive and accelerate the realisation of new industrialisation in Hong Kong and other cities of the Greater Bay Area, speeding up the formation of new productivity. To promote the high-quality development of new industrialisation and the digital economy, HKPC New Industrialisation has also established "Celesphere", dedicated to combining metaverse, Industry 4.0, artificial intelligence and human-machine interface technologies to further promote industrial metaverse applications and their adoption, optimising product life cycles, enhancing enterprise productivity and competitiveness, and jointly driving and implementing new industrialisation. For more information, please visit HKPC New Industrialisation's webpage: https://u.hkpc.org/HKPC-NewInd-EN.
About the Hong Kong Productivity Council (HKPC)
The Hong Kong Productivity Council (HKPC) is a multi-disciplinary organisation established by statute in 1967, to promote productivity excellence through relentless drive of world-class advanced technologies and innovative service offerings to support Hong Kong enterprises. Being a key enabler of Industry 4.0 and Enterprise 4.0, HKPC strives to facilitate new industrialisation in Hong Kong, as well as bolstering Hong Kong to be an international innovation and technology centre and a smart city. The Council offers comprehensive innovative solutions for Hong Kong industries and enterprises, enabling them to achieve resources and productivity utilisation, effectiveness and cost reduction, and enhance competitiveness in both local and overseas marketplace. The Council partners and collaborates with local industries and enterprises and world-class R&D institutes to develop applied technology solutions for value creation. It also benefits a variety of sectors through product innovation, technology transfer, and commercialisation, bringing enormous business opportunities ahead. HKPC's world-class R&D achievements have been widely recognised over the years, winning an array of local and overseas accolades. In addition, HKPC offers SMEs and startups immediate and timely assistance in coping with the ever-changing business environment, and strengthens talent nurturing and Hong Kong's competitiveness with FutureSkills training for enterprises and academia to enhance digital capabilities and TechEd competencies. For more information, please visit the HKPC website: www.hkpc.org