Speaking at the 6th Asialics International Conference on “Linkages in Innovation Systems: Global and Local Perspective” at the Hong Kong University of Science and Technology on July 6, Mr. Chan noted that Hong Kong possesses unique advantages that could facilitate market development.

“Hong Kong enterprises have a strong presence in the Pearl River Delta and they have good understanding of both the Mainland market and the world market,” said Mr. Chan. “Furthermore, the preferential treatment under the Closer Economic Partnership Arrangement has facilitated further industry collaboration between Hong Kong and the Mainland, with each contributing its unique advantages. Hong Kong can also make good use of the advantage of the Pearl River Delta region in manufacturing and the vast Mainland market to achieve economies of scale for research and development (R&D) products.”

The commissioner said the Innovation and Technology Fund has supported 1,436 applied R&D projects with approximately US$512.82 million since the fund was established in 1999.

In addition, Mr. Chan said, “The five R&D centers set up in April 2006 have been actively seeking collaboration with industry. They have kick-started over 200 R&D projects, with a total approved funding of over US$128.2 million in areas of high market potential.

“There are now more than 260 overseas and local technology companies in the Science Park,” he said. “Indeed, one of the most successful aspects of the Science Park is the clustering effect that has allowed companies located there to develop relationships both within and across technology sectors.”

Mr. Chan took note of businesses attaching greater emphasis to R&D activities. In 2007, 12,673 R&D personnel were employed in the business sector, representing a 70% increase from 2003. Business R&D expenditures also increased, rising 74% from US$448.7 million in 2003 to US$782 million in 2007.

Based on recommendations of the Task Force on Economic Challenges, the government has decided to step up support for the development of innovation and technology, according to the commissioner.

Among the avenues being considered: possible new financial or tax incentives to encourage the private sector to increase investment in research and development; exploring the development potential of Science Park’s Phase 3; facilitating the revitalization of industrial estates in meeting the demand from technology industries; providing more resources and funding to the five R&D centers to roll out more applied R&D projects and to strengthen their work in commercialization; continuing to reinforce technology collaboration with Shenzhen under the Shenzhen-Hong Kong Innovation Circle and jointly attracting more R&D establishments into the region.