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Chief Executive 2017 Policy Address: Hong Kong Government to invest more in R&D to generate wealth and quality jobs

Image credit: Screenshot from the Hong Kong Polytechnic University’s YouTube page.

“Research and development (R&D) create new products and services that can generate wealth and quality jobs for Hong Kong people.”

Secretary for Innovation & Technology Nicholas Yang (above image) made the statement in a press conference today to elaborate on the innovation and technology measures outlined in the 2017 Policy Address.

Mr. Yang said: “In research and development, we have set a target to increase the resources for R&D in the next five years to HKD$45 billion per year, with a view to doubling the ratio of Gross Domestic Expenditure on R&D from 0.73% to about 1.5%.”

He added the funding boost will enable local universities to launch more R&D projects, including those that could not proceed due to a lack of resources.

“A super tax deduction will be introduced to encourage the private sector to invest more on R&D. 

“The first HKD$2 million of eligible R&D expenditure will enjoy a 300% tax deduction (with) the remainder at 200%.

“We believe this is a right policy to stimulate private sector investment and flip the ratio of public versus private sector expenditure on R&D, from government-led to private-sector-led.” Mr. Yang elaborated, “In technology talent development, we will invest HKD$3.5 billion to boost the quality and quantity of local technology talents, including a HKD$500 million Technology Talent Scheme and an injection of HKD$3 billion into the Research Endowment Fund.”        “In infrastructure development, in addition to the Science Park expansion, Data Technology Hub, Advanced Manufacturing Centre and InnoCell, we are working full steam ahead on the Hong Kong-Shenzhen Innovation and Technology Park located at the Lok Ma Chau Loop, which will be developed into an important innovation and technology hub in the Guangdong-Hong Kong-Macao Bay Area. Moreover, Cyberport will operate some 20 000 square feet of co-working space under the Space Sharing Scheme for Youth. Innovation and technology start-ups can now enjoy rent-subsidised co-working space throughout Hong Kong.”

Commissioner for Innovation & Technology Annie Choi said any company which is conducting R&D can file their R&D expenses for tax reduction in their tax returns.    In her first Policy Address in her term of office to the Legislative Council, Hong Kong Chief Executive Carrie Lam has stated that she will personally lead a high‑level, inter‑departmental Steering Committee on I&T to examine and steer measures under the eight areas of I&T development as well as smart city projects.

The Chief Executive's Council of Advisers on Innovation & Strategic Development, to be formed by revamping the Economic Development Commission and the Commission on Strategic Development, will also offer ideas and advice to the Government on I&T development to maintain Hong Kong's competitiveness in the global arena and enhance Hong Kong’s alignment with the development of the country.

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