Global Summit of Innovation Economy CreatorsApril 2012

Fostering Innovation Development– Hong Kong Experience

E. Anthony Tan

Chief Executive Officer

Hong Kong Science and

Technology Parks Corporation

2012 Index of Economic FreedomAn annual guide published by The Wall Street Journal and The Heritage Foundation, Washington's No. 1 think tank. Hong Kong’s economy: the FreestFreest in the world (with overall score: 89.9)

(Source: http://www.heritage.org/index/country/hongkong)

World

Rank

Country Overall

Score

Change from

Previous

11 Hong Kong Hong Kong 89.989.9 +0.2 +0.2

2 Singapore 87.7 +0.3

3 Australia 83.1 +0.6

4 New Zealand 82.1 -0.2

5 Switzerland 81.1 -0.8

Global RankingGlobal Ranking

(Source: http://www.heritage.org/index/country/hongkong)

Rule of LawRule of Law Limited GovernmentLimited Government

Property

Rights

90.0 Government

Spending

91.0

Freedom

from

Corruption

84.0 Fiscal

Freedom

93.1

Regulatory EfficiencyRegulatory Efficiency Open MarketsOpen Markets

Business

Freedom

98.9 Trade

Freedom

90.0

Labor

Freedom

86.5 Investment

Freedom

90.0

Monetary

Freedom

85.8 Financial

Freedom

90.0

The New Economic Order

The rise of the BRICS nations: Brazil, Russia, India, China, South Africa

Source: IMF Data & Statistics Sept. 2011 & CIA World Fact Book 2010

GD

P (

US

$ B

illio

n)

Source: IMF Data & Statistics Sept. 2011

BRICS: •population 2.94 billion(~1/3 world)•GDP US$13.6 trillion (~21% of World US$63.04 trillion)•Reserves US$4.4 trillion (~35% of WW)

China - Key Economic Regions

(Source: http://www.zpooo.com/info/)

Shenyang

Beijing

Tianjin

NanjingShanghai

HangzhouWuhanChengdu

Chongqing

GuangzhouShenzhenHong Kong

2009 GDP Comparison

0.94

0.53

0.23

0.88

0

1

Yangtze RiverDelta

Beijing-Tanjin-Hebei

Greater PRD Hong Kong

GD

P (

US

$ T

rillio

n)

2009 GDP Per Capita Comparison

9,4026,805

32,466

13,734

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Yangtze RiverDelta

Beijing-Tanjin-Hebei

Greater PRD Hong Kong

GD

P P

er C

apita

(U

S$)

The Greater Pearl River Delta (PRD)

Over 42% of Hong Kong companies have R&D presence in PRD

(Source: http://www.info.gov.hk/info/gprd/pdf/F_GPRD_Overview.pdf)

Area: 42,824 kmArea: 42,824 km22

Population: 470 millionPopulation: 470 million(~94% of EU population)(~94% of EU population)

9 +2 (Hong Kong & Macao)9 +2 (Hong Kong & Macao)

Success Factors for Innovation Development

Market - China

As of 2012, China has the world's second-largest nominal GDP, totaling approximately 47.2 trillion yuan (US$7.48 trillion), with rising living standards.

Capital- Global Financial Centre

Hong Kong is an international financial center with a high degree of transparency and prudent regulatory enforcement.

Stock Exchange Market Capitalization (2011)

In 2011, total equity funds raised by HKEx was US$ 62.9billion, with 101 newly listed companies on the Main Board and GEM raising US$33.3 billion - ranking first globally for the third year in terms of funds raised by initial public offers (IPOs).

Talent - From Around the World

2008 recorded over 36,000 talents from overseas/Mainland to HK.

HKU/CUHK/HKUST: 3 leading research U rank top 40 of World University Ranking 2011 (QS Quacquarelli Symonds Limited). 4 HK Engineering Schools are top 100 of global ranking.

ExchangeExchange USD bn (End-2011)USD bn (End-2011)

1 NYSE Euronext (US) 11 796

2 NASDAQ OMX (US) 3 845

3 Tokyo Stock Exchange Group 3 325

4 London Stock Exchange Group 3 266

5 NYSE Euronext (Europe) 2 447

6 Shanghai Stock Exchange 2 357

7 Hong Kong Exchanges 2 258

HK Technology Ecosystem

University Research

Local well established companies

Early Technology Adaptors

Mainstream Market

R & D Centres:

e.g ASTRI New Technology

Start-up

Incubation

Angel / VC

Infrastructure

Support

Gov’t Funding

Gov’t Incentivese.g. LED Light Bulb, EV

Multinational Companies

Window of Opportunities

TA

LE

NT

TA

LE

NT

CA

PIT

AL

CA

PIT

AL

MA

RK

ET

MA

RK

ET

Hong Kong

Science & Technology Parks

HK/PRD Ranked No.1 inR&D Expenditure & Personnel (2009)

0

100

200

300

400

500

600

700

800

900

HK + GD Shanghai Jiangsu Zhejiang Bei jing Tianjin Shandong Liaoning Hebei

Total R&D Expenditure (RMB 100Mill ion)

Total Full-time Equivalent of R&D Personnel ('000)Total Domestic Patents ('00)

Source: China Statistical Yearbook 2010China Statistical Yearbook on Science and Technology 2010

Hong Kong Innovation Activities Statistics 2009

Hong Kong Science & Technology Parks Corporation

Hong Kong Science Hong Kong Science ParkPark

InnoCentreInnoCentre

Industrial Industrial EstatesEstates

Phase 1 Phase 2 Phase 3 (Constructing)

Hong Kong Science Park (3-phase Development)

Phrase 1Information Communication

Technology

Phrase 2 Biotechnology

Phrase 3 Green Technology

Phase 3

Gross floor area: 105,000 sqm

Development Cost: US$0.6bn

Bldg occupation: End 2013- End 2015

Phase 3 Objectives

To plan and develop phase 3 into a sustainable development that incorporated the latest green technologies and green building design

To accomplish its vision being a role model in promoting and implementing green sustain-able construction and development in Hong Kong

Targeting net zero carbon with due consideration of cost-effectiveness and road-mapping

To evolve Phase 3 into the catalyst to develop Hong Kong and Pearl River Delta Region as the hub for clean-tech

A New HorizonThe Green Decade

China’s Ambition in Green Technology

Improve Building Energy Saving

All new buildings are mandated to achieve

65% energy savings compared to the existing building stock

Energy and Environmental Taxes

New environmental tax plan which is likely to be levied on CO2 emissions and discharges of polluted water, has been submitted to the State Council for review

More Mandatory Green Targets

The 12th FYP maintained the existing four mandatory greentech targets while adding

6 new mandates, e.g. percentage of non-fossil fuel from primary energy consumption

Policies for Innovation Stepped Up

Strategic Emerging Industries which include new energy vehicles, energy efficiency and new energy (solar, wind and biomass) are identified to help advance economic development.

(Source: The China Greentech Report 2011)

The 12th Five Year Plan (2011-2016) further emphasises energy and environment development

Hong Kong Science Park Enabling Growth and Innovation

Phase 1+2 Phase 1+2

(Current)(Current)

382 Companies382 Companies

(32% from overseas)(32% from overseas)

>9,000 people>9,000 people

Annual TurnoverAnnual Turnover

~US$16billion~US$16billion

(2011/12)(2011/12)

Phase 1+2+3 Phase 1+2+3

(Projected)(Projected)

>500 Companies>500 Companies

>12,000 people>12,000 people

Hong Kong

Inception of Hong Kong Inception of Hong Kong Science & Technology Parks Science & Technology Parks CorporationCorporation

HKSP now home to:HKSP now home to:382 companies382 companies>9,000 employees>9,000 employees

Russia Russia Innovation Innovation

DevelopmentDevelopment-a bright future-a bright future