Progress report of the funding schemes under the Innovation and Technology Fund
The proposed STEM Internship Scheme
Mr CHAN Chun-ying noted that the Administration had set aside HK$40 million to implement the proposed STEM Internship Scheme to subsidize undergraduates and postgraduates taking STEM (i.e. Science, Technology, Engineering and Mathematics) programmes in local universities to enrol in short term internships in I&T related work. He asked whether the Administration would consider relaxing the eligibility criteria to cover all the undergraduates and postgraduates, regardless of their majors, so as to enlarge the local I&T talent pool. He also asked what measures the Administration would take to encourage the five R&D Centres and local I&T companies to actively participate in the STEM Internship Scheme and offer internship positions for the undergraduates and postgraduates.
CIT responded that by implementing the STEM Internship Scheme, the Administration aimed to encourage STEM students to gain I&T-related work experience during their studies, and to pursue a career in I&T after graduation. Noting Mr CHAN Chun-ying’s suggestion, the Administration considered it more prudent to implement the proposed STEM Internship Scheme, taking into account the implementation progress and experience before expanding the coverage of the scheme. The Administration would review the effectiveness of the scheme one year after its implementation, so as to decide whether or not to regularize the scheme or enhance the relevant measures.
Innovation and Technology Venture Fund
Mr CHAN Chun-ying noted that the Administration had invested only about HK$66 million in 10 local I&T start-ups (up to mid-March 2020) through the Innovation and Technology Venture Fund (“ITVF”), which was far below the estimated expenditure of HK$800 million for 2019-2020 financial year as provided in the 2019-2020 Budget. He enquired about the reasons for such differences and the time generally needed in assessing an investment proposal submitted by ITVF co-investment partners (“CPs”). For better utilization of the funding resources under ITVF, Mr CHAN suggested that the Administration might consider reviewing the Government’s matching investment ratio in ITVF and streamlining its procedures in vetting and approval of the investment proposals.
CIT advised that the Administration had invested through ITVF in 12 investment proposals (involving 11 local I&T start-ups), up to early April 2020. She further advised that the Administration had entered into agreement with the first round of VC funds to become CPs in July and August 2018. With reference to the experience gained from the first year of ITVF’s implementation, ITC had streamlined the procedures in assessing the investment proposals submitted by CPs. Currently, investment proposals could be processed within 1 month, provided that the concerned CPs had provided all the required information at the time of submission. To further explore co-investment opportunities, the Administration had earlier this year invited a new round of applications from VC funds with a view to selecting more CPs to join ITVF. The applications received were now under processing.
Enhancement of the Innovation and Technology Fund
Mr CHAN Chun-ying referred to his suggestion raised at the Panel meeting on 15 January 2019 that the Administration should consider establishing trade-specific programmes under ITF (e.g. funding schemes dedicated to financial technology (“fintech”) or e-commerce) to facilitate the development of particular trades. He asked about the result of the Administration’s consideration.
CIT responded that the Administration had attached great importance to the development of fintech. For example, the Hong Kong Applied Science and Technology Research Institute had identified fintech as one of its R&D focuses and devoted considerable resources in undertaking relevant applied researches.
Promotion of inward investment
Marketing and social media communications
Noting that amidst the impact of the coronavirus disease-2019 (“COVID-19”) outbreak, InvestHK had flexed its approach in investment promotion for 2020-2021 by strengthening its digital marketing and social media strategy, Mr CHAN Chun-ying enquired about the new investment promotion strategies to be adopted in the realms of tourism and hospitality as well as transport and logistics.
DGIP advised that InvestHK would continue to refine its business model in response to changes in the market. On specific sectors, the business landscape had shifted dramatically. The teams responsible for tourism and hospitality were actively re-working propositions for the Mainland and international companies in close consultation with the Tourism Board. InvestHK had been keeping the international investors updated on the latest situation in Hong Kong including the lowering costs (such as rental levels) of doing business in Hong Kong. As aviation was one of the hardest hit sectors globally, there would unlikely be any large volume of new aircraft financing in the near term. As soon as the pandemic subsided, however, Asia was expected to remain the major driving force of civil aviation as it enjoyed the bulk of the economic dividend arising from the population growth trend.
Noting that InvestHK continued its effort in 2019 to attract high net worth individuals and financial companies to set up family offices in Hong Kong, Mr CHAN Chun-ying enquired: (i) whether there was any successful cases done by InvestHK; (ii) whether key performance indicators had been set up for the areas of work in this respect; and (iii) whether InvestHK would relay to the relevant Policy Bureaux the potential customers’ views on Hong Kong’s policies conducive to investment promotion (e.g. taxation system and talent attraction policies) vis-à-vis our regional competitors such as Singapore.
DGIP said that InvestHK had been working with the Financial Services and the Treasury Bureau, the Financial Services Development Council and the Hong Kong Monetary Authority to launch a dedicated website and pitchbook providing the necessary information for family offices’ set up and operation in Hong Kong as well as highlighting InvestHK as the government agency providing one-stop services to family offices. On refining the policies conducive to the setting up of family offices in Hong Kong, InvestHK had been actively engaging the Private Wealth Management Association to understand the industry’s latest views.