309. Hong Kong would like to thank the United States and Singapore for introducing the papers under this agenda item which we are pleased to be a co-sponsor. I am also thankful to previous speakers sharing their experiences.
310. Hong Kong was glad to participate in the discussion of societal value of IP in the new economy in 2018. I hope our sharing in particular on how IP improves life did give Members some food for thoughts in promoting IP and innovation.
311. On the Public-Private Collaborations in Innovation, Hong Kong recognizes that R&D is essential in promoting innovation, new technology and intellectual property. All these are drivers for economic growth and the key to enhancing competitiveness of our industries. Our Government has therefore put in place a comprehensive framework of policies and institutions to promote R&D using the collaborative efforts of public and private sectors.
312. A key aspect is the provision of infrastructure that forms an enabling environment for R&D and an essential part of a strong innovation eco-system. We establish a publicly-funded statutory corporation, the Hong Kong Science and Technology Parks ("Science Park"), offering one-stop infrastructural support to technology-based companies and activities. It provides a comprehensive range of services to cater the needs of industry at various stages, ranging from nurturing technology start-ups through incubation programme, providing physical space and services for R&D activities, and to offering industrial lands for production.
313. As an example of public-private collaboration, the Hong Kong Government allocated about USD 1.3 billion to establish two research clusters - one on healthcare technologies, and another on artificial intelligence and robotics technologies - in the Science Park, in order to attract the world's top universities, research institutes and technology companies in the relevant fields to conduct collaborative research in Hong Kong. Numerous top-notch institutions e.g. Institute Pasteur of France, Harvard Medical School, Stanford University School of Medicine, and University College London, have already expressed interests in joining the clusters. It is expected that the first batch of scientific research institutions will be set up later this year.
314. We also have set up five publicly-funded R&D centres to drive and co-ordinate applied R&D in five focus areas, i.e. automotive parts; information and communications technologies; logistics and supply chain; nanotechnology and advanced materials; as well as textiles and clothing. The centres have been working closely with the industries in conducting industry-oriented R&D and promoting commercialisation of the R&D results. These R&D centres are core initiatives to upgrade the technological level of our industries and stimulate the growth of technology-based industries.
315. Hong Kong also strives to provide adequate funding to promote R&D in a direct and impactful manner. In particular, there are funding schemes to provide incentives for public and private collaboration. Just last month, we established a Partnership Research Programme by consolidating two existing funding programmes to provide matching-fund support for R&D projects undertaken by private companies in collaboration with public research institutions. To ensure sufficient participation from both public and private sectors, the public research institutions are required to be the lead applicant, while the private companies are required to provide at least 50% of the project cost (or at least 30% with exceptional approval from the Government). The companies are required to spend the funds in R&D only, but not in business development or operating expenses.
316. To encourage private companies to undertake more R&D projects, all IPR arising from the project will be solely owned by the companies having contributed at least 50% of the project cost. In case of exceptional collaborative projects involving less than 50% company contribution, the relevant R&D Centre should retain the IP ownership, and the company partner should only be granted an exclusive licence or exclusive right to use the R&D results for a limited period. With a view to boosting private companies' contribution, the R&D Centre would encourage its partner to raise the level of its contribution to at least 50% within a reasonable timeframe, say nine months, so that the latter could own the IPR.
317. We also launched another programme, the Cash Rebate Scheme, in 2010 to encourage private companies to establish stronger partnership with public research institutions. Under the scheme, a company will receive a cash rebate equivalent to 40% of its expenditure in projects under a major Government fund or other R&D projects funded by the companies and undertaken by public research institutions. As at end November 2018, around 1,200 companies have been granted cash rebate of more than USD 50 million.
318. While Hong Kong has a low profit tax rate (which is no higher than 16.5%), we provide enhanced tax deduction for private companies' expenditure on R&D activities which includes payments made to designated local research institutions. The deduction will be 300% for the first USD 250 000 of expenditure, and 200% for the remaining amount. There is no limit on the amount of enhanced tax deduction. We believe that this will encourage private enterprises to conduct R&D in collaboration with research institutions in Hong Kong.
319. In addition to funding, the private sector would look to talent to drive R&D activities. Hence our government is committed to supporting private companies in recruiting R&D talent. We rolled out the Technology Talent Admission Scheme in 2018. It provides a fast-track arrangement for admitting technology talent from overseas and Mainland China to undertake R&D work in Hong Kong. To balance the development and opportunity of local talent, we would require such companies to employ a certain number of local employees and interns in technology-related work.
320. We also launched a Technology Talent Scheme to pool together and nurture more technology talent for technology companies and institutions. It comprises a Postdoctoral Hub programme that subsidises government fund recipients and incubatees or tenants of Science Park to recruit up to two postdoctoral talent. Besides, there is another programme that subsidises local companies to train their staff in advanced technologies.
321. To assist private companies to acquire IP of their innovations, we launched an "IP Manager Scheme" in 2015. The scheme assists Hong Kong companies to build up their IP manpower capacity and to increase competitiveness through IP management. The scheme encourages enterprises to appoint a staff Member in a managerial position as their in-house "IP Manager". This IP manager is responsible for overseeing the compliance, management, exploitation and commercialisation of IP assets. The Hong Kong government would provide training and resources for those IP Managers.
322. To conclude, promoting innovation and technology is one of Hong Kong's top policy agenda. Our goal is to develop Hong Kong into an international innovation and technology hub. Knowing that the public and private sectors have different edge, we will keep devoting resources to facilitate public-private collaborations. We would also welcome collaborations with institutions from other Members.