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Further suggestions on Policy Address: Smart economy development
For the 2022 Policy Address, I have a few more suggestions as listed below:
Smart environment: Fully utilise underground spaces
As cities become increasingly crowded, developing underground space to cater for the growing urban population is the solution that Japan and South Korea have adopted. The underground space is cool in summer and warm in winter which can encourage people to walk more in the ever increasingly hot summer.
According to a research paper by the Legislative Council Secretariat in 2020, there were studies on underground space development in Hong Kong over the past few decades, including one in 2015 that a pilot study on underground space development in Tsim Sha Tsui West, Causeway Bay, Happy Valley, and Admiralty/Wan Chai was proposed.
One of the main obstacles is that 3D maps and models of the underground environment have not been widely produced and applied in the territory. On the contrary, the applications have become increasingly popular in other countries. In the absence of a comprehensive database or spatial data infrastructure (SDI) for the underground space with data on geology, utilities and tunnels for multi-angle and multi-level spatial data analysis, the government is unable to conduct smart planning nor utilise the available space resources. Therefore, the government should rectify this as soon as possible.
Smart economy
1. R&D investment should increase to 1.5% of GDP
In recent years, the government has been stepping up its financial support to foster innovation and technology development with an increase of research and development (R&D) expenditure as a percentage of gross domestic product (GDP) from 0.74% to 0.99%. But the investment is far from enough to enable us to be ranked among the top in the global competition compared with "startup nation" Israel's investment of 4.9% of GDP (2018) and our neighbour Shenzhen 5.4% (2020) in the field.
Our investment in R&D must be persistent and intensified. The government should increase R&D spending to at least 1.5% of GDP in the next few years. Otherwise, in today's fierce global competition in I&T, slow advance means to drop back. If we do not continue to match others in investing in the field, we may lag behind others and waste much of our efforts.
2. Encourage tech giants to relocate headquarters to Hong Kong
As the 14th Five-Year Plan strongly supports Hong Kong to develop as an international I&T centre, we should seize the opportunity.
If Hong Kong is to increase the proportion of I&T industry in GDP to 20% within ten years, one expedient way is to encourage Chinese and overseas tech giants to move their headquarters to Hong Kong. Austin in the U.S., for instance, successfully cements its status as a tech hub after convincing software giant Oracle to relocate its headquarters from California. This would help to create a favourable business environment for technology companies and startups, while also providing new employment opportunities for local and overseas talent.
With the measures in place, we can turn Hong Kong into a talent magnet and a tech hub at the same time.
3. Promote Smart-City-As-A-Service
Globally, development of smart city has typically brought in great business opportunities. Research firms CB Insights and Frost & Sullivan both predicted that by 2025, the global value of smart city would range from US$1.4 to US$1.56 trillion. The economic output of ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) , which are expected to rebound rapidly (2023: 5.1%, compared to 2.9% of the advanced economies) in the post Covid era, have high demand for smart city services, including water supply systems, waste collection and treatment, street lighting, grids, transportation systems, education and healthcare.
Hong Kong remains strong in the world's smart city ranking of which the latest position is 10th, according to the latest ICIM. What's more, we have close ties with ASEAN and are their second largest trading partner. Therefore, we should export our expertise and experience of smart city development to these countries to capture a large share of the business opportunity. This will not only inject impetus into the local economy but also provide quality employment opportunities for local talents.
Dr. Winnie Tang
Adjunct Professor, Department of Computer Science, Faculty of Engineering; Department of Geography, Faculty of Social Sciences; and Faculty of Architecture, The University of Hong Kong