Innovation System In Hong Kong

Innovation enhances competitiveness of a business and adds values to products and services. However, innovation is never an easy job. It involves substantial costs, time and resources. Never does it possible without any subsidies and great support. Thus, government and business sectors in Hong Kong (HK) have spent tons of effort and adopt various policies on innovation to enhance economic growth and its competitiveness. The followings will be a brief abstract of the role of government and business sectors on innovation in HK:

1. Overview of Hong Kong innovation activities:

1.1 Recent trend of innovation activities in HK

Innovation can be distinguished by technological, involved improvement on goods, and non-technological innovation, involved management theories of businesses From Graph 1 below, it is found that innovation activities taken in HK in recent years were mainly non-technological innovation activities. In 2005, 48% of the firms, increased from 14% in 2001, in HK undertook these activities. It is mostly because HK’s main industry is the service industry. Improvement on management and companies’ structure are necessary to maintain its leading status in service industry. Most importantly, Graph 1 shows the number of overall innovation activities kept increasing with time. It shows a trend of increasing importance of innovation activities.

1.2 Increasing number of Research and Development (R&D) personnel

From Table 1 below, it shows the number of R&D personnel in Hong Kong increased substantially since 2001. In 2005, 22054 people were engaged in R&D, up from 11041 people in 2001. They are mostly working for the business and higher education sectors, having 55% and 43% of the number of R&D personnel respectively.

2. Roles of government on innovation in HK:

2.1 Being a Pioneer:

Government undoubtedly is the pioneer of the development of innovation system as the cost involved is too high for any sectors in HK. From Graph 2 (B), it is found the R&D expenditure in 2001 is 67% of the total but only 44% in 2005. It is because once infrastructures and facilities are developed, other sectors would make use of them to enhance and sharpen its competitiveness. It means other sectors, especially business sector, would like to spend more on innovation afterward. Therefore, the R&D expenditure increased to 53% of the total in 2005 from 31% in 2001.

2.2 Quality Migrant Admission Scheme

This entrant scheme is quota-based and aims at attracting highly skilled or talent people to migrate to Hong Kong, in order to increase Hong Kong’s competitiveness in the global market. Successful applicants are not required to secure an offer of local employment before settling in HK. In this scheme, more than a fifth of the successful applicants are from overseas other than from the mainland China. They bring a wealth of professional skills that contribute to society's more diversified development. In 2007, there were 238 applicants being approved in this scheme. Through this scheme, HK could have more talents and wealth to work on innovation activities and advance technology.

2.3 Intellectual property protection system

Intellectual property is important since it is a property owned by an individual or a company. Indeed, it is an intangible property, which includes trademarks, patents, copyright, designs, etc. Since it has economic values, protection is necessary. Therefore, the HK government adopts various measures to prevent any possible breaches of the intellectual property right. Measures taken are as follows:

2.3.1 Basic Law and Intellectual Property Rights

In the Articles 139 and 140 of Basic Law, it stated HK should have should on its own develop appropriate policies and afford legal protection for intellectual property rights. In turn, the HK government develops its own laws to protect the intellectual property. For instance, there is Patents Ordinance protecting patent rights, Trademarks Ordinance protecting Trademarks, Designs Ordinance protecting Designs, etc. These are the main pillars to maintain intellectual property rights in HK.

2.3.2 Setup of Intellectual Property Department

It was established in 2 July 1990. It is responsible for the operation of HK’s Trade Marks, Patents, Registered Designs and Copyright Licensing Bodies Registries. It is also responsible for advising the Secretary for Commerce and Economic Development on policies and legislation to protect intellectual property and the promotion of the importance of intellectual property in HK. Moreover, from Table 2, it is found that the estimated expense on the Intellectual Property Department is HK$ 87 million in 2007-08, increasing from HK$75.4 million in 2005-06. It means the HK government is trying to put more effort on the issue of protecting intellectual property.

2.3.3 Setup of the Customs & Excise Department

It is responsible for enforcing the criminal aspects of infringement of intellectual property rights. It investigates complaints alleging infringement of trade marks and copyright and complaints alleging false trade descriptions. It has extensive power on allegations and cooperation with international enforcement authorities to combat any infringements of intellectual property rights.

2.3.4 Setup of Innovation Technology Commission

It aims at driving Hong Kong to become a world-class, knowledge-based economy. It helps with the researches and developments, infrastructures and facilities used, developments of government’s policies and promotions of internationally accepted standard on technology developments. Moreover, it has an innovation and technology fund to subsidize any approved innovation projects. In 2007, it had 1058 approved projects and subsidized HK$3,095.9 million. It helps to lower the risks and costs involved in developing innovations.

3. Impact from the HK government’s effort on innovation technology:

All the above measures adopted by the HK government have great positive impact on the innovation development and economic growth in HK. The followings are some impact, with